Glass Half Empty?

It is perhaps in keeping with mood of the country post the Brexit result, well parts of it anyway, that I left the first day of the PBUK conference with a slightly negative outlook.  The organisation, as always, was excellent, the venue spot on, the speakers high quality and one of the exhibitors had a pick and mix counter. So why was I glass half empty?

I think it was because that no matter what spin was put on matters there was an overarching downside to all the messages… And the Jelly Babies weren’t real ones.

The event was due to start with Angela Rayner MP the now ex-shadow pensions minister now elevated, through the post Brexit shenanigans going on in the Labour Party, to shadow women and equalities minister.  She was running late as she had to quickly pop back across the road to Parliament for, well we can guess why. She returned to give what I though was a good, honest, open and down to Earth speech that showed her as a politician who has come to Parliament not from privilege but from a sense of wanting to do a good job in public service.  So why am I so negative?  At a time like this Mrs Rayner, or Ange as she called herself, would have been a good shadow for pensions and it is just a shame that intra party turmoil has pulled her away from this brief before she could really get started.

No less committed to pensions as Ange but without, perhaps, the political nous, Baroness Altmann spoke next.   She started by saying that her slides were prepared before the Brexit result was known and to be honest she did not make much of an effort to adapt her speech for the landscape changing result that was delivered.  I was disappointed that her passing reference to pension scams was that they will always happen without any comment or commitment on what the Government will do to protect savers.  Probably, as the late Paul Daniels said, “not a lot”.   A member of the panel of pensions prophets that followed her opined that her speech was all a bit Janet and John (it’s an age thing – google it), and an insult to the expert audience she was addressing.  No-one I spoke to seemed impressed and I left feeling that it is unhelpful, when there is such a disconnect between the Pensions Minister and the pensions industry.  Like her shadow there were to be no questions.

The panel I referred to was lively and opinionated – that’s why they have them.  One interesting suggestion was to give DC members less info so that they don’t feel inclined to tinker with long term investments.  Interesting concept and perhaps a topic for a future blog!

The talk on fiduciary management was informative and posed a very good question (probably questions) that trustees should ask of their Fiduciaries.  What did they do to anticipate a Brexit result, to protect the trustee’s position and what are they doing now?  Is that discussion being had?  If not, it should.

Michelle Cracknell of TPAS took us through their experience of scams.  Like us she finds that scams are evolving.  The unfortunate conclusion I took from her talk was that fighting scams was like a game of “whack a mole”.  As soon you knock one down another scam pops up.  There was no talk of lobbying the Government just reiterating the existing education and awareness message and a resigned acceptance of managing a difficult problem as best as possible.

The session on 21^st Century Trusteeship was pretty much a statement of common sense (which can be interpreted as I agree with the panel views).  Laud the lay trustee for he or she is worth their weight in gold but the job is getting more difficult such that it is getting harder and harder to get lay trustees onto boards.    Whilst Trustees need broad skills they should also have negotiating skills in order to challenge sponsors and broker good deals.  Conflicts of interest for employer trustees is tricky but not insurmountable.  A good chair is essential for the smooth running of the board.  A question from the floor asked what to do about fund managers who won’t disclose fees and costs.   The consensus (including from the Fund Manager sitting next to me) was … fire them!

Emma Douglas gave a really good talk on the DC Dark Side illuminated by Star Wars references and images.  What struck me though were the figures about how millennials must save for a reasonable retirement at a reasonable age.  A gold plated two-thirds pension with retirement at age 65 based on an average salary of £30,000 requires a fund in excess of £630,000 and a contribution rate of 25%. State Pension sits on top of this.   This looks unrealistic so the option is to defer retirement and get a gold plated pension at a 16% contribution rate.  Two problems.  This requires retirement at age of 75 and the contribution is twice the average 8% being paid to AE schemes.  There is, of course, silver, bronze, tin and no retirement option available.  The comfortable retirements of the baby boomers (yes the same ones that mostly voted Leave) will not be enjoyed by younger workers when they come to retire (if they ever really do).

The last keynote was also the most uplifting, yeah what a way to finish the day, and it was given by … the Pensions Ombudsman!  Anthony Arter has been in the job just over a year but has already undertaken a root and branch review of his office and now runs it like a proper business.  Quick turnarounds, quick access to complaint resolution, cutting out lengthy correspondence going back and forward, informal decisions facilitate this with an overarching common sense approach.  Sounds good.  On pensions liberation these complaints now make up a third of his workload.  Many complaints are about schemes blocking transfers but he has as many, if not more, complaints now about post transfer behaviour and concerns. He naturally touched on the Hughes v Royal London pensions liberation case where the Court overturned his determination.   I was reassured by his comments that he would interpret the law sensibly and if others challenged his decisions (on points of law) so be it.  He did acknowledge that trustees were between a very big rock and a very hard place.  As long as trustees do all due diligence they could not be criticised.  Some comfort for trustees but cold comfort for an industry working to protect members, sometimes from themselves, but feeling helpless without Government action.  Glass is half empty again.

Time for home through a sweaty, congested rush hour underground, an overcrowded airport and delayed flight.  Not that it had an affect on my positivity.