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In many countries, it is illegal to under-fund your pension scheme for a significant length of time which avoids this problem. At any given time you can close t

In many countries, it is illegal to under-fund your pension scheme for a significant length of time which avoids this problem. At any given time you can close the scheme and switch people to DB without a massive liability overhang that you need to close. Eddie Lampert whined extensively about how hard the pension problem was making things for him. In a sense that is trivially true - extensive liabilities make it harder to run a profitable company - but it wouldn't have been an issue if they had been properly funding their pension liability all-along.

gaius 8y ago
In many countries, it is illegal to under-fund your pension scheme In the U.K. Gordon Brown made it illegal to over-fund a pension, leading many companies to have to take “contribution holidays” when markets were buoyant. Surprise surprise, when markets went down not only were the plans underfunded, there was no spare cash to make up the shortage. One of the many blunders of the worst Chancellor in living memory.