The decay of the old pension fund model, it seems, is gaining pace. In the UK, Goldman Sachs is the latest firm to buy out a corporate pension scheme, that of the leisure group Rank. More important, the first such buy-out fund was last week launched in the US, thus taking a British phenomenon on to the world stage.

Potentially, this could be very big indeed. The western world’s stock of defined benefit pension schemes – which is what we are talking about here – is vast, and the bulk of them are an embarrassment to their sponsors. If taking on those schemes proves lucrative, the sums available could be vast as well. Possible sources range from private equity – as with the new $500m US fund – to hedge funds and even sovereign wealth funds. And as with any big financial innovation, there is proportionate scope for getting it wrong.