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When Labour came to power in 1997, Britain had an enviable system of occupational pensions, with five million or more people in the private sector in schemes linked to their final salary.
Today, only one fifth of these schemes are still open to new entrants, and the number is falling every day. The obligation on employees automatically to increase pensions in line with inflation, heavier taxation, increases in life expectancy, and the obligation to show the impact of every rise and fall in the value of the assets and liabilities on the face of the sponsoring company's accounts have forced employers to conclude that an open-ended pension promise is just too risky.
The obvious thing for a government to do in such circumstances is to seek ways to amend the law to reduce the risk to employers so that those few still offering defined benefit pensions would find it easier to continue to do so. However, even if the Government is not entirely to blame for the decline in defined benefit pensions, it stands wholly culpable for failing to do anything about it. In this it has been deliberately negligent, not just in the 11 years since it came to power, but right now at one minute to midnight.
There is currently a Bill going through Parliament, the main purpose of which is to legislate for the creation of the new second pension. That Bill could also provide the perfect vehicle for some amending legislation designed to ease the burden on existing schemes to help them survive.
The Association of Consulting Actuaries has prepared just such an amendment, tested it almost to destruction in two years of debate and consultation within the pensions industry, and handed it as a blueprint for action. The core of its proposal is to allow existing schemes to be relaunched with what is in effect a cap on employers' future obligations, so they know the absolute worst they are getting into. Being actuaries, they call it conditional indexation.
But the Government has dragged its feet, deciding instead to launch a consultation that will eat up time and leave it too late to do anything useful. So the actuaries have gone to the opposition in the Lords to try to get them to amend the Bill on its way through in the next couple of weeks.
Their chances of success look good, but they would be a lot better if the Government would come on side - something it still seems shamefully reluctant to do. What a way for pensions minister Mike O'Brien to seek to be remembered - as the man who refused to throw a lifeline to drowning defined benefit pension schemes. its business, and the decision was taken that it could not afford to lose market share. So it cut rates to attract business, and undermined a market where rates were falling anyway.
The story came to mind this week with the change at the top of US insurer AIG, where Martin Sullivan was replaced as chief executive by Robert Willumstad. This was not alarming in itself, and the fact AIG has had to make writedowns of about $30 billion (£15.2 billion) against its subprime debt, and probably still does not know if that is enough, seems to offer a reason for Sullivan's departure. Indeed, if you don't get ousted for a $30 billion loss, how much would it take?
But it is statements from the incoming boss that have rung alarm bells, particularly his comments that he would take dramatic action to get to grips with the company's problems.
"I've set a goal in the next 90 days to dig into all businesses...to make sure our capital is being employed in the right areas. If there are businesses which are being hampered in terms of their growth, or strategically we are not as competitive in some areas, we'll take a hard look," he was reported as saying.
Willumstad is not an insurance man - he spent 40 years as a banker, and bankers are notorious in their love for market share. The danger is that we now have a new, hard- driving elephant in the room at a time when insurance rates are falling and there is a pressing need to maintain underwriting discipline.
The market will be tough enough as it is in the next few years, as capital dries up and claims for subprime losses and negligence come through, without having the world's biggest companies feeling they have something to prove.
