The regulation of defined benefit plans has improved significantly over the last 20 or 30 years. In the past they were scarcely regulated at all. In most jurisdictions there is a detailed requirement that those assets be held separate from those of the company as a whole, and they should, in some sense, be sufficient to meet their liability. Part of the problem was that during the 1980s and 1990s, the actuarial evaluation, as Mr. Ambachtsheer was saying, based on the historical high investment return, suggested that these schemes were in substantial surplus. At that point the regulators were happy that schemes were in surplus, but the people who were unhappy were the tax collectors. They said that the companies were overfunding these pension schemes and that they were like a tax-free corporate savings plan. The revenue authorities came out on the other side and said, no, we won't let you overfund your pension by more than 5%. We had companies trying to fit into a very narrow window between not being less than 5% underfunded and not being more than 5% overfunded. When we had the payoff in the markets, it was a very hard corridor in which to fit.
On May 27th, 2010. See this statement in context.