Pensions legislation could bankrupt major British companies

In the fourteenth IEA discussion paper, Nick Silver analyses the decline of final salary pension schemes (FSS). The author argues that successive governments have added to the cost of these schemes, making them unattractive to employers and hastening their closure. Moreover, the government’s misguided efforts to save FSS threaten the financial viability of many major UK companies with large FSS deficits.

Nick Silver recommends a number of strategies to reduce the burden of schemes and improve members’ security, including the repeal of recent legislation and the deployment of market-based solutions such as tradable pension debt and debt/equity swaps.

2006, Discussion Paper 14

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