A gentler way to talk about pensions

Hat tip Henry Tapper and I totally agree with Henry (on this matter)

"Yesterday afternoon I had a chat with Glyn Jenkins. Most of my conversations with Glyn over the years have been in the bar of Unison’s Marylebone’s offices. Glyn is old school and that means he prioritises people.

This chat was different, we were talking with a small group of highly sophisticated pension professionals about how to talk about pensions. We were meeting on Zoom and it was part of a virtual conference that would otherwise have happened in a posh hotel in Surrey,

It didn’t make any difference to Glyn, we saw him smiling benignly out at us from what he told us was the least cluttered part of his living room. Rather than daunting us with the extent of his library, the background Glyn showed us looked like the back room of Charles Dickens’ Old Curiosity Shop!

I suspect that Glyn’s capacity to adopt new technology but to remain true to himself marks him out at a time when we are all marvelling at our new found tech-saviness. For Glyn, none of the technology mattered at all.

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So what did Glyn talk about?

Glyn talked about how people come to an understanding of the pension they get and how they can make best use of it. He talked about the life insurance that NHS staff were getting and the good it can do them right now. He talked about things that he thought his members should know about.

He explained things in a simple way, as he used to explain to me about the public sector pension transfer club in the rooftop bar of the Old Unison building. To get an idea of how straightforward Glyn’s approach is , here is his Linked in profile

Glyn did not talk about himself!

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A gentler way to talk about pensions

I suppose I found myself gently reproved by Glyn- and I’m sure he didn’t mean to reprove me! It’s just that this man’s kind gentle manner and his huge emotional intelligence worked on those on the call in a way that I couldn’t.

Though many of those in the room are at the forefront of delivering “engaging” communications, we all had to step back and re-connect with the simple values of gentle decency that Glyn presents.

And I find myself learning from the experience, chastened by my hubris and remembering that the people who Glyn speaks to and for , are the public servants on whom all our lives currently depend.

"The nastiest, hardest problem in finance"

Check out top pension blogger Henry Tapper on why 85% on those able to transfer their pensions out of a DB (defined Benefit Pension scheme) would be best advised not to take it (or F...k'n bonkers to do so - in my non financial advisor language)

"In July, John Ralfe wrote what (for me) is still the best summary of the situation facing members of the British Steel Pension Scheme. If you have an FT account you can read it here.

I will quote the section where John talks about the value of retaining rights to a pension as it is as relevant for a BSPS member as for anyone else. It is an exceptional piece of writing.

Cashing in a defined benefit pension means giving up a guaranteed monthly income, increasing in line with inflation, usually from age 65 until you die, and half this amount for your surviving spouse.

Once the pension is cashed in, the decision cannot be reversed.

A final salary pension provides complex guarantees, including longevity — not running out of money, however long you live — and investment performance, as the monthly payout will continue regardless of investment returns.

The value of these guarantees to an individual member may be low if they are wealthy and their chances of running out of enough money are tiny, however long they and their spouse live.

But most people are not so wealthy and because their pension is a large part of their overall wealth, these pension guarantees are very valuable.

Make no mistake, how much to spend in retirement, so you don’t run out of money, is the most complex financial decision anyone has to make. Even Nobel prizewinner Bill Sharpe recently described it as “the nastiest, hardest problem in finance”.

Anyone looking at cashing in their pension now with high transfer values shouldn’t think they are making a financial-genius play on future real interest rates, future equity returns and their life expectancy. They especially shouldn’t be fooled into thinking they can rely on holding equities for the “long run” to replace their guaranteed pensions. The expected return from equities is not a loyalty bonus, but is just the reward for taking risk".

Sense about fantasy pension deficits

A great article by Henry Tapper in his blog "Pension Playpen" about the nonsense being spread about the "fantasy deficits" of by the huge UK pension fund, University Superannuation Scheme (USS).

The USS has produced investment returns of 21% increasing its assets to £60 billion in the last year yet due to the broken accounting yardstick that many pensions schemes use to value their liabilities, its supposed deficit has increased by 33% to £71 million.

What a load of old nonsense. As Henry points out why has the deficit increased by such an amount? Have university staff suddenly increased their lifespan by a third?

No, of course they have not and shame on the Daily Mail headline hunters, who claim that lecturers will have to be sacked or  student fees increased to pay for these "fantasy deficits".

Check the comments page of his post for a useful contribution by former pensions minister, Roz Altmann on why gilt driven liability investment is bonkers (my interpretation)  

ShareAction Summer thank you 2017

Picture collage from Thursday evening "thank you event" in Brick Lane, East London for supporters of ShareAction - a campaigning body "to make investment a force for the good". 

It was great to meet so many people concerned about the power and impact of our collective investments. I met for the first time their CEO Catherine Howarth's children and her wonderful Mum!

I also had a chat with the Red City of London, Peter Kenyon; was lectured at by a pompous Green, entertained by Henry Tapper; spoke to two authors on Pension Governance and was really pleased to see that "Professional Pensions" won the "award" for "Strongest Coverage" of Responsible Investment. Well done to Stephanie and Jonathan.

As was mentioned at the event, the really exciting thing is that ShareAction are winning the argument...

Democratise our savings - Why we need a Magna Carta for Pensions

Many thanks to Henry Tapper for the plug on his website "Pension Playpen - Restoring Confidence in Pension".

Henry talks sense and reflects a fairly widespread unease amongst member nominated trustees at least, that "professional" or corporate trustees should not be paid to "represent" the interests of ordinary policyholders on insurance companies "Independent Governance Committees" (IGC).

 I have met a number of excellent individuals, who are professional trustees or advisers and they can often play a vital role in supporting some trustee boards. Some others I am less with impressed with and I am forced to remember the old but wise adage "He who pays the piper calls the tune" is as true for the financial services industry as any other.

 I am always unhappy that they are called "trustees" which I think muddies the water. They are not trustees. They are professional advisers. As said before, there is nothing necessary wrong with that. Yet to be very clear they have no fiduciary duty to policyholders but to only to themselves, their partners or shareholders and not to beneficiaries. That is why it is absolutely crucial that policyholders should represent policyholders on an IGC.

Yes, there will be resource issues regarding elections and the occasional maverick will be elected but so what? To paraphrase we all know that democracy is the worst form of Governance - except all those other forms that have been tried from time to time.

We must restore faith in pensions and the financial services industry. IGCs are an historic opportunity to democratise our savings and protect policyholders from the constant drip, drip, drip of fraud, corruption and consumer rips offs.

Protect policyholders and protect insurance companies’ integrity and reputation at the same time. In that typically horrible but descriptive Americanism it is “win, win” for all.

UPDATE: also check out Nigel Stanley at the TUC website Touchstone

Most Influential Trustee - Mallowstreet Awards 2013

I am looking very serious but last night's event at the Mallowstreet 2013 Awards (Pension social media site) was actually fun. The event took place at The Globe Theatre, South Bank in London.

There was a great turnout by members of the AMNT.

I was up for two awards - "Most Influential Trustee" and "Top Blogger" of the year.

This is the second year in a row that I was nominated as a trustee.

This year I was selected as "Most Influential Trustee" and this was the judge's comments :-

“With one of the most viewed blogs for 2013 on the Church of England's investment in Wonga, this individual never shies away from sharing provocative view points, personal experience and opinion. He has provided the foundation for some very interesting discussions, he has always done his research, whether you share his views or not there is something about his musings that make you want to have your say as well.”

"provocative view points"? Do they mean me?

Surely not :)

Picture with Judge, Louise Inward and host Vincent Franklin (Rowan the trainer in "The Office")

Congratulations to all nominees and winners for all the awards. Especially to the quiet and unassuming Henry Tapper from First Actuarial, who won two awards.