JOHN FLYNN: All moneys in the scheme is deferred pay. That's the first reason why you should go to the members. And then since 2008, members have paid more for less.
Members contributions and pension schemes have gone up. What used to be 60th schemes have turned into 80th schemes or 90th schemes. What were 80th schemes have turned into 90th schemes, 100th schemes, or even 120 schemes. So you're paying more for less.
TOM MUIR: Defined benefit plans pay, benefits out in a specific way, guaranteed for life, set out by the rules. Once that obligation to members has been met, that scheme has fulfilled its purpose. Over decades, we're talking 60, 70, 80 years. Sponsors of pension schemes have managed and worn the burden of risk associated with pension schemes.
They've been the financial backbone. They've weathered financial crises, longevity risk, investment risk, regulatory risk. And they've done so without any guarantee of return. That's a massive asymmetry of risk between the member and the sponsor there. And enhancing benefits beyond what's required within the rules effectively turns a defined benefit pension scheme into a discretionary benefit scheme.
RICHARD GUNTON: I will be taking on the role of the analytical actuary, not, as the picture would suggest, the role of 1970s snooker legend Ray Reardon.
[LAUGHTER]
I would suggest that an analytical response is a good starting point, but I think then I probably agree with both my fellow panelists here. There will be some passion involved in how that surplus is ultimately split.
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