ICAEW Axes Defined Benefit Pension Scheme

In June 2006 I wrote:

"Given the ever increasing pension black hole in the ICAEW accounts (it has grown by £4M over the last year), it is hardly surprising that the ICAEW has asked to raise subscriptions this year by 4% (which, despite their denials, is above inflation).

The triannual actuarial review will be carried out later this year and, as sure as eggs are eggs, we can assume that the black hole will have increased.

The astute amongst you will realise that the ICAEW will therefore be again coming cap in hand to its members, to ask for another inflation busting subscription increase in 2008.

Given these never ending increases in staff costs, why did the ICAEW hire 125 more people in 2006?

Do they regard the membership as a docile compliant cash cow which can be milked to death?"

The ICAEW have finally realised that the current arrangement, whereby subscriptions are increased each year to fund the pension black hole, is unsustainable. Therefore the ICAEW is going to cancel the final salary (defined benefit) pension scheme (closed to new members since 2000) next year.

Accountancy Age quote an ICAEW spokesman:

"A spokesperson for the ICAEW said that the fund had become too costly in its current form and that the volatility of the market made it difficult to determine the amount of funding needed.

We will honour the commitments we have already made to those people in the scheme, and are committed to funding the deficit that exists."

The scheme currently has a £19M deficit.

I don't fully understand "we will honour the commitments we have already made to those people in the scheme".

Given that the scheme has been closed to new members since 2000, the closure implies that those currently in the scheme will have to move to a defined contribution scheme.

On the assumption that is the case, how can the ICAEW "honour commitments to those already in the scheme"?