Re: Company DB Schemes
Hi Ajapale
There is certainly a trend away from DB schemes to DC schemes. Whether this will go as far as the UK remains to be seen.
FRS17 is due to be subsumed within IAS19 over the next couple of years and this may take some of the pressure off DB schemes, provided some smoothing is retained within IAS19 (which is by no means guaranteed). A sustained market recovery (if it happens) may also help to save DB schemes from oblivion.
Having said this, there is no doubt that many companies, particularly smaller companies where annuities have to be purchased at retirement, are questioning the advisability of continuing to sustain the risks associated with DB arrangements.
The Pensions Board may also help to hasten the demise of DB schemes through an ever-increasing compliance burden. However, they have recognised the dangers caused by over-regulation and are currently reviewing some aspects of the legislation with a view to reducing the burden, particularly in relation to the minimum funding standard.
You bemoaned the lack of response to your original query and suggested that this might be due to a lack of expertise in relation to DB schemes on the part of AAM participants. It may also be due to the somewhat nebulous nature of some parts of your original query, requiring a level of speculation from an audience that (at times) prefers to deal in facts.
Regards
Homer