Pension Buyouts: What Can We Learn From the UK Experience?

Ashby Monk

IB#9-21

The brief’s key findings are:

  • Defined benefit pensions are waning due to financial volatility, regulations, and a changing economy.
  • In the UK, pension buyouts – whereby sponsors pay an insurance company to take over plan assets and liabilities – have emerged to help manage the decline.
  • In the US, policymakers resist buyouts, as they would prefer to stop the decline of defined benefit plans rather than manage it.