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Regulation without Reason: The Deleterious Effects of Government Regulation on Private Pension Provision
Author(s) -
Silver Nick,
Pant Saurabh
Publication year - 2012
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2012.02174.x
Subject(s) - legislation , pension , demise , government regulation , government (linguistics) , public economics , private pension , business , economics , actuarial science , political science , finance , law , linguistics , philosophy , china
In this article, the history of regulation in pensions in the U nited K ingdom is analysed, in particular with respect to defined benefit occupational pension schemes. A framework of criteria for effective legislation is developed. The original prudent person rule provided a good framework for legislation, but most subsequent regulation that has been enacted does not meet our criteria. Recently regulation has increased the cost and risk of individual schemes and the systemic risk in the system as a whole. The article finds that, in totality, regulation has been disastrous for these schemes, contributing to their demise. The article concludes by briefly outlining how effective regulation might have developed to produce a flexible and resilient system.