- the stock market fall around the turn of the century, which accounted overwhelmingly for a reduction of around £250bn in the market value of occupational pension scheme assets between 1999 and 2002
- many firms made the decision during the 1980s and 1990s, despite rising liabilities, to take contribution holidays, believing a bullish equity market to be a long-term trend
- rapid rise in life expectancy
Clearly all of these factors had an impact. But there are one or two important wrinkles Gordo doesn't mention.
In reality, over the last decade as a whole, pension funds' equity investments have made money for them. In sharp contrast, Gordo's tax grab has been an unmitigated cost, of between £50bn and £100bn depending on whether you believe the Treasury or this respected Fellow of the Institute of Actuaries.
It wasn't a simple matter of companies expecting bull markets to continue for ever: there were powerful government incentives for companies to keep surpluses as small as possible. And since Gordo was in a position to change them, he can't now use contribution holidays as a "not me guv" excuse.
If Gordo had been a stronger more strightforward politico (hah!) he'd have gripped this very real and pressing problem. Instead, he entirely flunked his own responsibility over those public sector pensions (which are still final salary, still pay out at 60, and still largely unfunded), and dumped even more costs on our funded private sector schemes.
Unsurprisingly, sponsoring companies didn't like it. Coupled with the asymmetric tax treatment of surpluses, it meant that by 1997, many big companies were already thinking seriously about switching their pension schemes from the traditional final salary arrangement to the cheaper, and for them, much less risky, money purchase plans (Defined Contribution). Some had already acted.