This article first appeared in the summer 2006 issue of European Fund Manager
The pension fund ‘crisis’ made its way out of the trade journals and onto the front pages of Europe’s favourite newspapers many many months ago, and has appeared there intermittently but prominently ever since. And this is despite the efforts of politicians in many countries to distract our attention with a series of top-notch farces ranging from the Italian election results and the reluctance of the loser to leave office, and Britain’s quadruple whammy in late April: the home secretary and his foreign prisoner problem, the health secretary being ridiculed at a nursing conference, the defence secretary found to have cannabis in his constituency home, and the Deputy Prime Minister with a totally unexpected and literally unbelievable successful track record in extra-marital sex.
The immediacy and potency of the pension crisis has almost become an article of faith to believe in it, like the Virgin Birth, Resurrection from the dead, and Transubstantiation (the doctrine that the communion wafer literally becomes the body and blood of Jesus Christ at the moment of Consecration). Anyone who questions its very existence is dubbed a heretic and unbeliever, who must be made to recant. Just as with global warming (or, to give its new name, climate change, a label applied once the penny dropped that in recent years it’s actually been significantly colder and wetter than for a decade or two previously.