Greatest Good 2: Response to the Department for Work & Pensions Green Paper 'Security and Sustainability in Defined Benefit Pension Schemes'

Abstract

"Greatest Good 2" follows-up and repeats the findings of our earlier December 2015 discussion paper ("The Greatest Good for the Greatest Number") that 1,000 occupational defined benefit pension schemes are stressed as a result of having a financially weak sponsors. The slide of many these schemes into the Pensions Protection Fund (PPF) seems inevitable because policy and regulation demand that schemes adhere to the binary outcomes of paying full benefits or going into insolvency. We call for the government to pursue a policy of ‘second best’ outcomes allowing schemes with weak sponsors for whom insolvency is inevitable to negotiate settlements between full benefits and the benefits provided through the PPF.

JEL Classification: G22