Oh, how pension fund trustees must wish they could turn the clock back to the halcyon days of plump scheme surpluses, pension holidays (remember them?) and the promise that every worker could retire with a nice fat, index-linked income, guaranteed to the end of their days.
Barring the invention of the time machine, such delights are doomed to remain just a wistful memory (and in reality access to the nirvana of generous defined benefit occupational pension schemes was far from universal).
But not everything from the past needs to remain permanently out of reach. The Marathon Club, which represents a large slice of the trustee community, yearns for the days before IAS 19 determined most assets had to be ruthlessly marked to market, and liabilities were to be discounted in line with double A corporate bond yields.
The club asserts that such overly onerous regulation is helping sound the death knell for DB schemes. It is calling for an industry debate to thrash out a better future for the pension industry and all who sail in her, even if that means turing the clock back.
So, is the Marathon Club’s argument a runner and what, if anything, should replace the draconian diktats of IAS 19 and its evil sister FRS 17?
