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In defence of defined benefit schemes

The system is affordable

By Fiona Frobisher  

Based on alarming headlines you could be forgiven for believing that defined benefit (DB) pension schemes are in crisis, that the system is unaffordable and that the only solution is to slash members’ pensions.

I don’t believe that narrative bears much scrutiny.

Whilst we expect deficits to have increased for most schemes this year, the majority of sponsoring employers can and will afford to meet their benefit promises. The risk of a system-wide failure remains remote. This means the regulatory framework is working largely as parliament intended.

There are several reasons…

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