The issue of pension benefit security has returned to the foreground of both economic and political
debate in many OECD countries - following high profile losses of pension benefits due to plan sponsors
becoming bankrupt and leaving underfunded pension schemes. Some countries have dealt with pension
benefit protection via strong funding rules (the route taken for example by the Dutch authorities). Two
OECD papers examine other methods for increasing benefit security in retirement – via pension benefit
guarantee schemes (such as the Pension Protection Fund recently introduced in the UK) and the position of
pension creditors within insolvency proceedings (which has been examined, for example, in Canada).
Pension Benefit Guarantee Schemes are insurance type arrangements - with premiums paid by
pension funds - which take on outstanding obligations which cannot be met by the insolvent plan sponsors.
JEL codes: G23 J32
Keywords: pension benefit, guarantee schemes, insolvency insurance, bankrupt, underfunded, pension
scheme, funding rules, PBGC, PPF.