Whenever a big company goes under these days, much of the post-collapse discussion surrounds the pension entitlements of former employees. The UK Government even has a Pension Protection Fund set up to try the best for the employees who are rightly seen as victims.
Dominic Chappell, of BHS infamy, even lost a court case this week for not sharing the information on his companies pension scheme with the Protection Fund - he may even get locked up for it.
But what has worried me for a long time is the destruction of the Pension industry since 1997 and Gordon Brown's raid on the tax relief on dividends in pension funds.
Since there all the UK defined benefit schemes have closed, these were more generous and could not be sustained after the raid. Also, the pension deficits of companies have grown, long-ago now are the pension holidays companies used to take in the 1990's.
In fact, the total amount raised by the Gordon Brown tax is around £150 billion (about £10 billion per annum, twice what it was alleged to be at the time). Today total FTSE350 deficits are around £17 billion, far from healthy.
On top of this then we have the Quantitative Easing fiasco which should ended 5 years ago. Now, we a very low interest environment thank to Banks and Funds being for by regulation to by Government Bonds which have increased in price, thanks to demand, and shrunk in yield. As a result, despite investing at around 6% more each year and having Pension assets double in the past ten years, pension scheme deficits are rising.
With all the money invested into pensions schemes, companies show less profits and in turn have less money to invest. One of the drivers of the UK economy, in a negative sense, is the lack of productivity driven by low investment. Companies that are struggling end up with no profits at all, see Carillion and others - pension deficits are a key driver toward corporate failure.
QE on top of the Brown reforms has destroyed the UK pension scheme industry. Weirdly, a re-balance economy with the end of QE would quickly see Deficits fall and pensions back to health (in their new defined contribution form which is about 1/3rd as good as the old defined benefit schemes).
It is a big underlying macro-economic challenge rarely addressed and as ever was an attempted Labour reform to the private sector gone wrong!