A thought experiment. You have a defined benefit pension with a company scheme that backs its pension liability to you with various assets ranging from ultra safe to ultra high yielding. The liability is valued using the rate of return on the assets.
The company offers to buy you out, and will pay you the market value of those assets in return. (Perhaps assume it actually gives you those assets).
Is that a good deal? Would you want more, perhaps arguing that with the defined benefit the company has effectively given you a guarantee that the assets will in fact grow at the rate of return assumed in valuing the assets?
As a second thought experiment, you decline the offer, and when the company complains the scheme is hugely in deficit if the liabilities are valued using a discount rate for lower yielding but ‘safe’ assets, you (and your union) object that this is just Tory bosses using artificial valuation methods to screw the workers, so stuff the lot of you, man the barricades etc.
Is my objection consistent with my first position? Am I assuming in the first case that the guarantee is very valuable, but in the second case that it is not so valuable after all?