'CALPERS-like' institutions could solve pensions crisis

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Barings Asset Management has proposed moving public occupational systems to fully funded institutions run along the line of CALPERS (the Californian Public Employee Retirement Scheme).

The move could have a knock-on effect of reducing the number of defined benefit scheme closures while cutting the cost of pensions provision for the public. In a white paper entitled “Solving the UK’s Pension Problem”, Barings says the change is vital as over £600bn of unfunded public sector occupational pension deficits will be brought on-balance sheets later this year as part of the move towards Whole Government Accounts. This will raise the UK debt-to-GDP ratio to around 90%. Toby Nangle, director of fixed income at Baring who has presented a paper on the subject, says: “Gordon Brown ...

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