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The Trouble With Final Salary Pension Schemes

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  • Nick Silver

Abstract

The decline in final salary pension schemes (FSS) is a result of increasing costs caused in part by legislative interference. In this paper it is argued that FSS have always been detrimental to the economy. In a misguided attempt to save FSS, the government risks bankrupting large sections of the British corporate sector. Other policy measures could allow greater flexibility for trustees of pension schemes and remove counter‐productive legislation and encourage innovative market‐based solutions to pensions problems.

Suggested Citation

  • Nick Silver, 2006. "The Trouble With Final Salary Pension Schemes," Economic Affairs, Wiley Blackwell, vol. 26(4), pages 53-60, December.
    • Handle: RePEc:bla:ecaffa:v:26:y:2006:i:4:p:53-60
    DOI: 10.1111/j.1468-0270.2006.00670.x
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    References listed on IDEAS

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    1. Orazio Attanasio & James Banks & Matthew Wakefield, 2004. "Effectiveness of tax incentives to boost (retirement) saving: theoretical motivation and empirical evidence," IFS Working Papers W04/33, Institute for Fiscal Studies.
    2. Exley, C.J. & Mehta, S.J.B. & Smith, A.D., 1997. "The Financial Theory of Defined Benefit Pension Schemes," British Actuarial Journal, Cambridge University Press, vol. 3(4), pages 835-966, October.
    3. Kamakshya Trivedi & Garry Young, 2006. "Defined benefit company pensions and corporate valuations: simulation and empirical evidence from the United Kingdom," Bank of England working papers 289, Bank of England.
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    Cited by:

    1. Josiah, J. & Gough, O. & Haslam, J. & Shah, N., 2014. "Corporate reporting implication in migrating from defined benefit to defined contribution pension schemes: A focus on the UK," Accounting forum, Elsevier, vol. 38(1), pages 18-37.

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