Abstract

"Explaining the Slowdown in UK Occupational Pension Provision (1967 – 1995) "

Yally Avrahampour, LSE (y.avrahampour@lse.ac.uk)

The mid-twentieth century was characterized by rapid growth of occupational pension funds in the UK, reaching a peak of 8.2 million active members in 1967. By 1995, however, active membership had declined to 6.2 million individuals. In common with the prior period, the dominant benefit design remained defined benefit and occupational pension funds continued to invest in equities, reaching a peak average allocation of 81% in 1995 , whilst outsourcing investment management to fund management firms. This study explains these latter changes as the consequence of the partial increase in the rigor of standards relating to the governance of occupational pension funds, a contrast with the increasingly permissive standards of the mid-twentieth century.

Drawing on archival sources from professional associations, stock-broking firms and pension funds, interviews and articles from the professional press, I explain the increased rigor of standards relating to the governance of occupational pension funds as the consequence of the changing division of expert labour between professional segments advising pension funds. I outline the jurisdictional settlement prior to the introduction of new standard setting processes, the responses to the processes and the subsequent jurisdictional settlement. I explain how increased rigor in standards of governance contributed to a slowdown in occupational pension provision.