DB surpluses and discretionary benefits

Once commonplace, discretionary pension increases faded with economic downturns, but with improving pension scheme funding levels, wage growth and more schemes considering running on in surplus, are they poised for a comeback?

Discretionary increases on pensions which didn’t otherwise have a guaranteed rate of increase used to be quite commonplace in the 1990s and 2000s. That changed gradually as interest rates fell and funding positions deteriorated. Advanced allowance for discretionary pension increases was typically removed to mitigate the increasing deficits, and employers were increasingly reluctant to fund these increases on a pay-as you-go basis.

Read full article here: https://www.barnett-waddingham.co.uk/comment-insight/blog/db-surpluses-and-discretionary-benefits/?utm_source=partner_content&utm_medium=amnt&utm_campaign=jun_sumbmission