Changes in accounting rules are forcing companies that report under International Financial Reporting Standards or US Generally Accepted Accounting Principles to confront the economic reality of obligations under defined benefit pension plans. For most companies such plans are unaffordable; as a result we are seeing a shift to defined contribution plans, coupled with a growing interest in immunising existing obligations through "liability driven investment" strategies, which seek to match plan assets with the company's pension obligations. Both trends are ill-conceived as long-run solutions.

The shift to defined contribution plans does eliminate the company's financial liability for pension provision. But it does not provide the individual with advice and tools needed to save sufficiently and efficiently enough to ensure a satisfactory retirement income. The individual needs a savings plan tailored to specific needs that takes account of issues such as long-term healthcare and his home's value.