Given the troubles with BHS and Tata Steel and the impact of their defined benefit (DB) pension scheme liability on their ongoing viability, the Work and Pensions Committee is launching a review to consider solutions for businesses and pension scheme members.
Of the ~6,000 DB schemes in the UK, more than 5,000 are in deficit, totalling £805 bn, with the total surplus of the remaining schemes being only £4 bn.
This highlights the extent of the issue in aggregate, but each scheme also faces this issue everyday when funding their commitment to DB pension scheme members and providing for this liability for the future. This is a significant drain on their P&L and balance sheets and providing for it is an ongoing battle for many companies.
MPs on the work and pensions committee are to launch a probe into the long-term viability of the UK’s 6,000 defined benefit (DB) schemes. The committee is already investigating the current state of pension regulation as well as the collapse of BHS and its pension scheme's fall to the Pension Protection Fund. The government is also investigating whether to reduce the pension entitlement of 130,000 British Steel workers.