Annotated bibliography Assignment Example | Topics and Well Written Essays - 750 words - 3

Annotated bibliography - Assignment Example rch, I have examined various sources that contain valuable insights about the business model and management structure of Wal-Mart, one of the most successful companies in the world. One of the best journals done on this company, which I have found to be very reliable as far as understanding the company include, â€Å"Wal-Mart and Values: Painting the Town Red?,† which was done by Carden Art, Charles Courtemanche and Jeremy Meiners. This journal gives an analysis into the business empire developed by Wal-Mart. It examines the values and principles that have made the Wal-mart business, enabling it to become of the most successful companies in the world. The journal gives the business model that the company boosts of, which has helped the company in its business growth and expansion across many countries in America and Europe. According to the authors of this journal, the company has a wide clientele, appealing to both the high end and low end citizens. The company offers goods that are affordable coming in various ranges like electronics, food items among others. The journal gives the strategies and approaches being used in the company’s expansion program. Hellen has taken time to explain about the growth path which Walmart has taken in its growth in Canada as well as in most other countries not only in America but across Europe. Hellen explains that Walmart has embarked on establishing 11 new departmental stores that will help improve its competitive advantage and market position. The Canadian market has been thought to be quite productive, considering that the country does not have many large stores that can match those that Walmart has established in the United States. The author explains that the branches that had been established earlier have continued to perform outstandingly because of the effective management. One of these retail stores includes Bentonville, which is the Arkansas-base retail shop that is part of the first to be established by the

Pestle Framework of Business Essay Example | Topics and Well Written Essays - 2000 words

Pestle Framework of Business - Essay Example From this discussion it is clear that  regarding the influence of the political environmental factors, matters of restrictions, policy, and other derivatives of the environment determine the nature of operations in ways that determine the trends of business. These factors have the capacity of enhancing the nature of business just as they have the potential of providing some robust framework that is used for the general performance of the business.This discussion highlights that it is important to consider some of the issues attending to the processes of business in terms of the various issues that affect and are in turn affected by the environmental factors. An awareness of these factors is necessary for the processes of planning, strategizing, budgeting, and the general management of the business. The development of strategy is usually determined by the ability of the business to use all the positive values and qualities that are necessary for the sustenance of the business. In es sence, the levels of success or failure of a business is necessarily determined by the manner in which the business connects with environmental factors as considered within the aspect of reality.  The political environment usually occurs in ways that are generally available for the determination of the levels of performance of the business. It is important to consider the fact that the political factors are connected to the other macro-economic factors that determine the nature of the operating environment.... The political environment usually occurs in ways that are generally available for the determination of the levels of performance of the business. It is important to consider the fact that the political factors are connected to the other macro-economic factors that determine the nature of the operating environment. Political factors in the environment of business could be conducive or hostile depending on a range of factors. Political environments that feature stringent conditions and policies will essentially stifle the aspect of competition within the process (Murray-Webster, 2010, p. 121). The realization of the range of factors that attend to the issues and values of the organization will essentially lead to the development of issues based on some of the matters that attend to matters of relevance and the determination of a range of factors that attend to the issues related to commerce and enterprise. Some of the issues that affect the operations of business are largely regulated by the fact that issues affecting business are essentially regulated by concerns in the world of business. Regarding the economic forces, certain economic factors have a direct impact on the manner in which businesses operate as understood within the framework of environmental factors. Generally, some of the issues that attend to the matter of challenge are necessarily controlled by the manner in which certain issues and processes are regulated. Economic growth and exchange rates are some of the economic factors that affect the performance of businesses within certain economic environments (Cheverton, 2005, p. 30). Economic growth encompasses a range of factors such as the availability of efficient banking services and robust and dependable

Newtons Second Law of Motion Lab Report Example | Topics and Well Written Essays - 1000 words

Newtons Second Law of Motion - Lab Report Example In this lab experiment, we shall focus on the validation of this law by applying the behavior of an almost frictionless motion of a car on a horizontal aluminum track and a constant force T will be applied on the car. This motion will be recorded by a motion sensor and used to analyze this law. From the experiment and data analysis above, a number of things can be noted. The value of gravitational acceleration in the constant mass of the moving system is greater than the expected value of 9.81m/s2. This means that an increase in the value of gravitational acceleration is directly proportional to the net force. An increase in the net force will cause an increase in the gravitational acceleration. In the second experiment, the value of gravitational acceleration towards the sensor is higher as compared to the value of gravitational acceleration away from the sensor. An explanation to this phenomenon can be attributed to the fact that for an object at rest, the force of gravity acts on that particular objects but on the other hand, a counteractive force from the surface acts on it. For an object on a slope, some of the gravitational force is acted upon by the gravitational force that is provided by the slope. The remaining force may force it to move down slope and hence the data collected. This proves that Newton’s second law is followed

Public health and road safety in Australia focus on NSW state Essay

Public health and road safety in Australia focus on NSW state - Essay Example This document examines the validity of this approach with respect to the current situation in New South Wales, Australia and provides justification for the involvement of the public health department in this initiative. It raises points as to why road safety merits the interest of the public health department and is a necessity for the improvement of overall public health. Public health, as defined by the National Public Health Partnership (1998) is â€Å"The organized response by society to protect and promote health and to prevent illness, injury and disability†. Considering that the main focus of the public health department is public health, it is apparent that road safety, which accounts for numerous injuries, disabilities and death in the population is also a point of concern for the public health department (PHD). Road traffic accidents are known to claim over 1.3 million lives a year all over the world (WHO 2011). In Australia alone, 1507 fatal road traffic accidents w ere reported in 2009. New South Wales accounted for 453 of these (nearly one third) (RTA 2010). Considering that each of these incidents could have been prevented, it is obvious that there is a lot of scope for improvement of road safety. A review of the statistics reveals that alcohol and fatigue were quite often the cause of road accidents in the state.

Newtons Second Law of Motion Lab Report Example | Topics and Well Written Essays - 1000 words

Newtons Second Law of Motion - Lab Report Example In this lab experiment, we shall focus on the validation of this law by applying the behavior of an almost frictionless motion of a car on a horizontal aluminum track and a constant force T will be applied on the car. This motion will be recorded by a motion sensor and used to analyze this law. From the experiment and data analysis above, a number of things can be noted. The value of gravitational acceleration in the constant mass of the moving system is greater than the expected value of 9.81m/s2. This means that an increase in the value of gravitational acceleration is directly proportional to the net force. An increase in the net force will cause an increase in the gravitational acceleration. In the second experiment, the value of gravitational acceleration towards the sensor is higher as compared to the value of gravitational acceleration away from the sensor. An explanation to this phenomenon can be attributed to the fact that for an object at rest, the force of gravity acts on that particular objects but on the other hand, a counteractive force from the surface acts on it. For an object on a slope, some of the gravitational force is acted upon by the gravitational force that is provided by the slope. The remaining force may force it to move down slope and hence the data collected. This proves that Newton’s second law is followed

Brazilian Literature Essay Example for Free

Brazilian Literature Essay For a long duration, Dom Casmurro, Machado de Assis’s novel has moved its readers to opening a debate on if Santiago’s wife, Capitolina, had been faithful to Santiago. The narrator was believed to have loved his wife since their childhood. His mother, who later passed on had wanted the narrator to become a priest thus avoid getting married to his girlfriend. They later got married but later starts to suspect the wife of an affair with Escobar, a close buddy of his. Escobar later on perishes in an accident and the narrator’s wife got a baby boy, Ezekiel. The conflict of the narrator reaches climax as the people around him indicates that the born child resembles Escobar. The narrator is left sad with this as he accuses his wife of infidelity and longs for revenge while on the other hand trying to prevent himself. The supposed infidelity of the narrators wife is not the main issue, but the most debated issue in this novel is the manner in which reader is positioned by the novel in asking or deciding the himself question or just his version of the issue. In order to respond to such questions, one is expected to view the events in the novel in order to take position. The whole narration comes out from the narrators view point as he converts the subjectivity into mere fiction. In the novel, the reader of the novel is enticed by the narrator, Casmurro into his confidence as well as being manipulated to condemn Capitu, his wife. This makes the reader perceive him as a person who took the responsibility of his wife’s death and the other reprehensible behaviors of the life he lived there after (Joaquim, Maria). There are several clues in the presumed eyewitness’s account of truthfulness. But closely looking at the clues given by the narrator leaves one to finalize that the narrator is living a lie and the way in which the desire he expresses in trying to fill in the central existence of his, fails since the fact of the life he is living is in a lacunae which he is not in a position to have it in the story of his life. Casmurro, right from start, portrays himself as the figure with authority in the story and starts to manipulate the audience. The insight into Casmurros personal traits is portrayed in the first chapter as in â€Å"DO titulo† (the title) he tries to link to audience with the way in which he got his nickname Dom Casmurro. He goes ahead to inform the reader not to find the meaning of the word Casmurro in the dictionary, however, he indicates that it implies tight-lipped person who is withdrawn within himself. On the other hand, the name is a old fashioned Portuguese word defined by the dictionary as obstinate, bull-headed or fearful, withdrawn, aloof, dour and gloomy(Scott). The narrator is believed to have gotten his nick name from a young gentleman within his neighborhood who was feeling being insulted by Casmurro. This name, Dom Casmurro was given to the narrator during one of his journeys by train to Engenho Novo. On the way, he met the young man who was reading some poems for him. Tired, Casmurro fell asleep even without getting what the young man was reading for him in his poems. The following day, the man whop felt ignored stated calling the narrator ‘Dom Casmurro’. Because of the narrator’s humble nature, Dom was used in a belittling manner. The entire neighborhood saw the name Casmurro as being fitting to him so much that it got stuck. Casmurro makes the nickname the title of his story after giving it definition for the audience as well as discrediting it with a lot of humor. He goes ahead to portray himself as a real gentleman and an honest man. Looking at the meaning of the name in the dictionary leaves on to start questioning the truthfulness of the narrator (Assis and Gledson 246). The narrator, who just refers to himself as Dom Casmurro, is reluctant in identifying his true identity. The audience only learns later on that Casmurro’s real name is Bento Santiago. The narrator does not want to assume this identity but prefers to remain just as Dom Casmurro. He later tries to recall all the happenings of his earlier life hoping to go on with reorganizing his life the way it used to be. As he gives introduction of his memoirs, he talks of some recollections which he refers to as charming and sweet. As the narrator promises to provide a faithful narration of his earlier life, he also posses the expectations of having the reader taking his story as true but not consider issue outside the meaning of his narration. The question the reader is left asking himself or herself is whether he or she can believe whatever the narrator is saying. With this said it is clear that Casmurro wants to relinquish the influence of the story as well as leaving the whole story in the reader’s hands. He does this by inviting the audience to have the gaps in the story filled. But the reader is left with little chance to do so since he is making sure that the reader adopts to his views and ignores the questions out side this. But the reader can condone the narrator’s behaviors if he decides to expose them. In trying to tell the story from his own point of view, the narrator wants to create a link of trust as well as establish confidence with the audience. But he has indicated to the reader a number of his fault as well as discounting the sternness with unwarranted explanations for behaving in that manner. Casmurro comes out to be unable to keep the needed control over the audience in the chapter. In order to fill in this gaps the reader, can do so by taking the case of the narrator has been in long defense of himself. By misleading the reader in the initial narration, Casmurro conflates Bento Santiago with Dom Casmurro. The narrator is sufficient distinct from bento Santiago and needs to be another character. As in the events which follow this, the narrator used the name Casmurro as the persona in the narrative to give picture of his life and allow him to relinquish the responsibilities that could be associated with Santiago wants life. The real truth of the story lies in the gaps left for the reader to fill which appears to be the responsibilities of the reader, thus the reader has to choose the role to play. The name Casmurro does not appear as the most suitable title for this story since it does not flow with the ideas of the story. The slum This is a novel which takes one back to the history of a naturalistic movement of Brazil, in which the major characters are slum residents in the Botafogo neighborhood of Rio de Janeiro which contributed to a great part of the social problems experienced in the society. This kind of live has disordered the slums growth and development for many years. One of the main characters, Joao Romao arrives in a scene of the slum yarning for money and more power. This indicates how the powerful have concentrated resources to them selves forgetting the poor ones in the slum. The rich and powerful society of Brazilian as alienated from the Brazilian culture leaving the poor to struggle on their own. Many people, in the initial setting are exposed to the harsh slum live. The rich are depicted as being greedy merchants who like associating them selves with the Portuguese (Joaquim 254). The roles of the women in the slum include being submissive family heads, prostitutes, subjects to the rich and objects. There is a lot of racism exhibited considering the way the blacks are treated by the Portuguese and the Italians. Bertoleza, a slave grocer living in the ghetto, represents the many people fighting to make survival. She sells ox baits and fried fish. She is a symbol of the many slum dwellers who are in their situation because of being black which is seen as the cost of working all day long for the masters. She works hard despite the low wages she raises from her job. Development in the slum is indicated when she intents to use some of the money she earns to purchase an earth strip for expansion of her business and built a house for herself as she is tired of the informal house she lives in the centre of the Rio de Janeiro slum. The slum people have created a social macrocosm. Very early in the morning the slum live starts, the residents open not their eyes but their infinity of doors and allied windows. The characters exhibited to in the slum as fighting, working, copulating, singing or even singing. The slum comes out as a place where the blacks as well as the mulattos are ever engaged in scrambles with the Portuguese and Italian in order to move up from the bottom line of the social food chain. This indicates a live that lack social pathologies, violence, sordid betrayals, illicit sexual relationships, lesbians and homosexuals as well as cheap prostitution business, illicit liquor, increased drug abuse and small organized crimes associated with increasing juvenile delinquency. The Portuguese civilians in the slum represented by Jeronimo and his wife find a group of people represented by Rita Baiana and Firmino who are the poor residents of the slum in the normal slum social groups. The story of the slum is also concerned with the love affair of Romao, a land owner in the slum who gives out everything as well as his Brazilian wife in order to win a white lady and those of his land tenants ending up destroying several lives including those of spitfire Rita Bahiana and Jeronimo and his own too. He had risen from being a proprietor of a small business to a slum dog lord. This represents the urban discontent, is portrayed to have its people having some personal traits which exhibit rampant materialism as well as souls which are restlessly shaped and influenced by great ambition and desire to gain power and immediacy. The social vices exhibited in the slum are as a result of the poverty associated with the slum which has driven its people to desire for more than what the society they are living in can offer. These are exhibited as the characters of most slum dwellers who survive at any opportunity, given the chance to find their breakthrough. The people with money in this society have taken the advantage of the situation to get cheap sexual satisfaction from the Poor’s wives. The near by neighborhood of Portuguese is seen as being rich one. The interaction of the Portuguese with the slum dwellers starts is believed to bring some changes to the slum. It is due to this that the slum dwellers start to have closer relationships with the Portuguese who employ them in better jobs. Others get into personal relationships or even marriage with the Portuguese attracting better packs for their lives as the presence of the Portuguese increases in the slum. They start get interest of developing the slum into a better environment where they would invest. Some developments are portrayed when some of the rich slum people like Romao establishes a quarry and goes ahead to in invite Jeronimo to help in its management. With so much rivalry developing in the slum due to hatred and envy of some Brazilian getting associated with the Portuguese, the slum is burned down at some point. Later on, it is built up with some improvement in the building structure by the middle class society thus eliminating the initial state of poverty and disorganization experienced by the slum dwellers before. This changes the former kind of live style that the slum dwellers had adapted. As the intermingling of the Brazilians with the Portuguese increase, the level and standard of living went up. The former slum dwellers started to live in better houses. The number of marriages between the two societies increased and more investments were started in the former slum area which had developed into better residential area. After the slum is burnt and some new houses are developed by the middle class, most of the vices exhibited initial by the slum society are not any more. The cases of illicit sexual relationships, fights and poor housing are replaced by a society which has burning desire for development, as the middle class society starts to put their interest for investment which turns the once unhealthy society into a meaningful livelihood suitable for human settlement. Other characters exhibited by the Brazilian slum live include the people’s despair, the slum excitement, and the perfumes. The dwellers of the slum always have the ever burning desire to live the lives of the neighborhood which is full of luxury. The slum itself is perceived as an organic unit, with all sorts of live present there. After the development, the slum starts to fills with urban college students and artists who also contribute to its gentrification. The slum life was initially portrayed as full of sadness and tragedy as seen in its naturalism but with these developments some sense of lively hoods have started to be seen. Another major development of the slum is the manner of ownership that is shown before and after the burning and housing of the land. Initially, the bigger percentage of the slum land was owned by some few individuals such as the slum lord, Joao Pomao who is seen as one of the big hypocrites and who exhibited a lot of control over the slum many landless. After the recreation of new houses most of the land was owned by several middle class people. Work Cited Caldwell, Hellen. The Brazilian Othello of Machado de Assis. Berkeley: University of California Press. 1953. Joaquim, Maria. Machado de Assis. Dom Casmurro, Berkeley: University of California Press. 1953. Scott, Infanger. Living a Lie: the Silence of Truth in Dom Casmuro, Vanderbilt University, 2002, viewed on 13 July 2009 from http://www. umassd. edu/cas/portuguese/lyinginportuguese-texts/scott-livingalie. doc Assis, Machado and Gledson, Joao. Dom Casmurro. New York: Oxford University Press, 1998, p. 246.

Factors That Affect the UK Pension Crisis

Factors That Affect the UK Pension Crisis Investigating the factors that affect the UK pension crisis Introduction This review examines the background literature regarding the causes of the UK pension crisis[1], and the various measures taken to combat the crisis. In order to understand the nature of the problem, it is first necessary to consider a bit of background on the UK pension system, and UK demographics. There is some debate over which types of pensions – pay as you go (PAYG) or funded schemes – are best. Barr (2006, 2) explains that ‘[i]n a PAYG scheme pensions are paid out of current income. In a fully funded scheme, pensions are paid from a fund built over a period of years from members’ contributions. Virtually all state pension schemes are mainly PAYG; private schemes are generally funded (though not necessarily adequately).’ The UK state system ‘is a complex mix of several components, paid for on a pay-as-you-go basis though a mixture of national insurance contributions and general taxation’ (Hills, 2006, 116). Non-state, voluntary schemes include occupational pensions which may be either defined contribution (DC) or defined benefit (DB) schemes, and private pensions which are usually DC. In recent years the majority of occupational DB schemes in the UK have closed. The demographics of the population have changed significantly over recent years. Barr (2006, 4) argues that ‘[a]verage age at death in the UK (and similarly in other countries) has been rising steadily at least since 1860 Clearly, as more and more people live to pensionable age and, having achieved that, live longer and longer beyond that, the costs of pensions rise and, as a proposition in pure logic, rise disproportionately.’ However, the UK also faces some country-specific pension issues, and these will be the focus of this dissertation. At the root of the problem with PAYG schemes is the ageing population, but there are other factors which affect the supply and demand of funded schemes, and against which policy may be more easily directed. Three of these are drawn out in this dissertation. As such, and for clarity, this literature review is structured around the three themes: public knowledge and understanding of pensions in the UK; the level of private savings in the UK; and the recent decline of DB schemes in the UK. However, it should be noted that these three factors are interrelated, as will be demonstrated in the analysis that follows. Public pension knowledge Pensions are always subject to a problem of imperfect information – when one considers how and how much to save for retirement, the decision is made on an estimate (not a certainty) of life expectancy. However, there are further problems in terms of knowledge and understanding of pensions, particularly in the UK. ‘On the microeconomic side, the advantages of consumer sovereignty are predicated on well-informed consumers, a very strong assumption in the case of pensions. Individuals are imperfectly informed, first, because of uncertainty about the future—individuals are not well-informed because nobody is well-informed. Second, they are imperfectly informed in the face of risk (Barr Diamond, 2006, 20). This second problem is particularly acute in the case of the UK. As the DWP (2006, 12) outlines, ‘[a] long-standing feature of the UK pensions system has been its complexity, which can confuse both employers and individuals trying to make the best financial decisions for the long term.’ Hills (2006, 123) confirms this point, and elaborates on it: ‘The UK pension system is—perhaps understandably—poorly understood, and that understanding has if anything declined in recent years: in 2000, only 53 per cent of the population reported at least a ‘reasonable, basic’ knowledge of pensions, but by 2005 this has fallen to 47 per cent. At the same time, levels of trust in pension providers and financial products are low. Even if people do realize that their pension will be inadequate, this combination makes it very hard for them to make a plan to do something about it.’ In addition to high levels of confusion about the pension system in the U K, there is relatively high freedom for the individual to decide how and how much to save for retirement. Banks et al (2002, 16) explain that ‘[t]he UK pension system allows individuals a great deal of choice over how much they save for their retirement and in which form they save.’ The DWP (2006, 6) claims that it is ‘helping people to make better informed choices about their retirement, introducing a range of pension forecasts to give individuals an understanding of the income they are likely to receive in retirement. Since their introduction, the Government has issued just over 20 million of these forecasts and we are developing web-based retirement planning services.’ These measures may not, however, be sufficient to guide individuals through what remains a complicated system. Considering the government also seeks to place the responsibility for pension decisions firmly with the individual[2], it is likely that more needs to be done to increase public knowledge and understanding of saving for retirement. Blake (2000, 233), for example, does not view such measures as sufficient. ‘The fact that membership of pension schemes at the second pillar remains voluntary is highly worrying for reasons of myopia and moral hazard. Compulsory contributi ons are seen as one way of dealing with individual myopia and the problem of moral hazard. Myopia arises because individuals do not recognise the need to make adequate provision for retirement when they are young, but regret this when they are old, by which time it is too late to do anything about it. Moral hazard arises when individuals deliberately avoid saving for retirement when they are young because they know the state will feel obliged not to let them live in dire poverty in retirement.’ In the next section, the problem of the lack of private savings will be considered in more detail. Lack of private savings Relative to many other countries, there is a lack of private saving in the UK. As the DWP (2006, 11) explains, ‘[r]etirement undersaving has arisen for a variety of reasons: because individuals have not trusted private pensions, because suitable savings vehicles have not been available to them, and because, in the face of a historically complex pensions system, financial short-sightedness and inertia have left inaction as the default option.’ This demonstrates the interrelationship between public knowledge of pensions and retirement income and levels of saving (eithrer through pensions or otherwise). This point is reiterated by Davis (2004, 22) who claims that ‘[s]urveys suggest there is a major underestimation of saving needs for retirement – and most individuals focus on pensions only 10 years ahead of retirement†¦ The saving problem may partly be linked to poor information.’ Clearly a lack of easily accessible and comprehensible information ha s contributed to the low levels of private savings in the UK. However, there are also other reasons. In addition to understanding how the system works, it is necessary that individuals are presented with the right incentives to encourage private saving. Davis (2004, 4)explains that ‘essential background for evaluating private pensions is provided by the structure of social security pensions. As in all countries, the scope for developing funded private pensions in the UK is conditional on the nature of compulsory, pay-as-you-go social security pension provisions. Broadly speaking, the development of social security in the UK has been favourable to private schemes, particularly as a consequence of the rather limited scope of social security on offer and the ability of employees to opt out of earnings-related social security pensions.’ However, in practice, low levels of private saving suggest that such incentives have not been sufficient. In addition, there are various disincentives to save for retirement and, indeed, there are disincentives for financial advisors to provide advice on retirement savings to those with low incomes. This is due to the risk that by the time they retire, their savings will disqualify them from certain means tested benefits to which they would otherwise have been entitled. Davis (2004, 10) argues that in the UK ‘[a] systemic incentive problem is that income support has a non-pension income test, such that benefits are withdrawn when incomes accrue, which discourages saving by low-income workers, and may also discourage membership of pension schemes.’ In a similar vein, the Economist (2005) argues that ‘[m]uch of the blame lies with the pension credit, one of Labours pet policies, which is damaging the incentive to save. By 2025, almost two-thirds of pensioners will be eligible for this means-tested payment, which tops up the meagre basic state pension. Since it is withdrawn at a rate of 40%, they will thus in effect be liable to the top rate of income tax on their savings income.’ In order to combat the low levels of saving in the UK, the government has developed various initiatives to promote and encourage saving. According to the DWP (2006, 15), they are going to ‘[i]ntroduce low-cost personal accounts to give those without access to occupational pension schemes the opportunity to save. People will be automatically enrolled into either their employer’s scheme or a new personal account, with the freedom to opt out. Employers will make minimum matching contributions.’ By creating a scheme into which people are automatically enrolled unless they opt out, this is likely to impact on private savings since, as Hills (2006, 123) explains, ‘[s]avings behaviour does not follow the optimizing pattern predicted by some economic models. Instead people procrastinate about difficult financial decisions and display considerable inertia. Interestingly, it appears that membership of otherwise identical pension schemes in terms of incentives such as employer contributions is much higher when people are automatically enrolled into them, with the right to opt out, than when they have to make a conscious decision to opt in.’ The closure of defined benefit schemes Traditionally, the UK has had a high level of private pensions as the state pension was meager and most employers offered DB occupational pensions. In recent years, however, most DB schemes (at least for private sector employees) have been closed to new entrants. This can be seen as a result of two key factors: increasing longevity and, more recently, the poor performance of the stock market. According to the DWP (2006, 10), ‘[s]ince the 1970s, employers have been retreating from occupational pensions as rapid increases in life expectancy and then the end of the high equity market in the late 1990s pushed costs higher than had been anticipated when occupational pension schemes were designed. This trend has continued, with 2 million fewer members of open private sector occupational pension schemes in 2004 than in 2000.’ The relatively poor performance of the equity market has certainly had a major impact on the nature of occupational pensions since funded pension schemes in the UK have traditional relied very heavily on investment in the stock market. The Economist (2002), for example, claims that ‘Britains pension funds have punted heavily on equities for many years. That strategy has paid off handsomely, but it does expose them to greater risk in the short term than more cautious strategies which put more money into less volatile bonds. The bear stockmarket of the past two years has hit pension funds hard and brought home to companies the investment risk that they are shouldering. At the same time they have become more aware of the risk of rising life expectancy at older ages, which increases the cost of a defined-benefit promise.’ These two issues combined have led to the closure of many schemes, and by the end of 2002, many schemes were running with large deficits (Davis, 2004, 12). The closure of so many DB schemes is deemed to be a contributing factor to the pensions crisis for two main reasons. The first is that the alternative – usually an occupational DC schemes – is considered more risky for individuals. The second is that there is generally a lower take up of DC pensions as compared with DB schemes. Thus, in effect, the switch to DC schemes is discouraging saving. Each of these two reasons will now be examined in turn. As Barr (2006, 2) explains, ‘[i]n a DB scheme, often run at the firm or industry level, the pension a person receives depends on his or her wage history and on length of service. One feature of this arrangement is that the risk of differential pension portfolio performance falls on the employer, and hence is shared more broadly than with DC arrangements. Second, the pension a worker gets is not fully actuarially related to his or her previous contributions.’ However, it can be deomnstrated that DC schemes actually tend to be more beneficial for employees who change employers several times over the course of their career (since such employees are effectively punished for each switch of employer in the DB system). Since most individuals these days do change employer at least a few times, this provides a strong argument for the case that a DC pension can be at least as good as a DB pension. Turning to the second reason, there is indeed evidence to suggest that individuals take up DC pensions at a lower rate than DB pensions. According to the Economist (2005), ‘[w]hen companies close their DB schemes, they typically offer a defined-contribution plan, in which employees build up their own pot of pension money. However, contribution rates into these DC plans tend to be much lower. According to the GAD [Government Actuary’s Department] survey, the total contribution rate from employers and employees into DC schemes is 8.9% of earnings compared with 18.8% into the private DB schemes.â⠂¬â„¢ This problem again relates back to the problem of lack of public knowledge and understanding of pensions. If DC pensions can be shown to be at least as good as DB pensions for the majority of employees, and yet the take up rate is lower, there must be a problem of information or incentives. In order to combat the so-called ‘problem’ of the closure of DB schemes, therefore, it may be more important to improve information about, and incentives to take out, DC pensions, rather than to try to resurrect the system of DB pensions. In the words of the Economist (2002), ‘[t]he way forward is not to lament the demise of final-salary schemes but to make DC plans work.’ Conclusion At the heart of the UK pensions crisis are two issues which work together to cause a crisis. With an ageing population, the dependency ratio increases to the extent that it is not possible to rely on PAYG schemes. At the same time, the level of savings within the UK is too low for the retired population to be able to rely on funded pensions. The low level of savings can be seen as caused by a number of factors, including a lack of clarity and information on pension requirements and choices, a lack of trust in the financial services sector and the information it provides, as well as certain disincentives which discourage individuals, particularly in the low income sector, from saving. The closure of DB schemes has interacted with the poor information and lack of trust to discourage certain people (who would previously have enrolled in a DB scheme) from enrolling in the DC alternative. All of these problems are interrelated and it is the combination of them that can be seen as causing the UK pension crisis. In the words of Davis (2004, 22), ‘the savings gap is aggravated by †¦ the deficits and closure of defined benefit funds, loss of confidence in personal pensions and also in life insurance generally following mis-selling of personal pensions.’ As such, it is a combination of policies that is required to tackle these problems. Bibliography Banks, J., Blundell, R., Disney, R., Emmerson, C. (2002). Retirement, Pensions and the Adequacy of Saving: A Guide to the Debate. London: Institute for Fiscal Studies. Barr, M., Diamond, P. (2006). The Economics of Pensions. Oxford Review of Economic Policy , 22 (1), 15-39. Barr, N. (2006). Pensionse: Overview of the Issues. Oxfor Review of Economic Policy , 22 (1), 1-14. Blake, D. (2000). Two decades of pension reform in the UK: What are the implications for occupational pension schemes? Employee Relations , 22 (3), 223-245. Davis, E. P. (2004). Is there a Pension Crisis in the UK? London: The Pensions Institute, Cass Business School. DWP. (2006). Security in retirement: towards a new pensions system Executive Summary. London: Department for Work and Pensions. Economist. (2002, February 22). End of the party: How bad for employees is the decline in final-salary pensions? The Economist . Economist. (2005, June 23). Pension reform: The shape of things to come. The Economist . Hills, J. (2006). A New Pension Settlement for the Twenty-First Century? The UK Pensions Commissions Analysis and Proposals. Oxford Review of Economic Policy , 22 (1), 114-133. Mullan, P. (2002). The Imaginary Time Bomb: Why an Ageing Population is not a Social Problem. London: I B Tauris. Footnotes [1] While discussion of the UK ‘pension crisis’ is very common, it is worth bearing in mind that the current situation is not unanimously viewed as a crisis. Barr (2006), for example, argues that a problem exists but not a crisis. Mullan (2002) does not even consider it to be a problem. [2] â€Å"We need to be clear that individuals must be responsible for their own plans for retirement. The reforms will ensure the provision of high-quality savings vehicles, and a solid state foundation to private savings. But the choice of how much to save, the level of risk to take with investments, and how long to work must be available to the individual. That provides the right balance of choice and support for individual responsibility.† (DWP, 2006, 22)