Defined Benefit Valuations: Hilary Salt from First Actuarial - TUC Pension Trustee Conference 2013

The 2nd speaker on the TUC "Defined Benefit valuations" session after Con Keating was Hilary Salt, from First Actuarial.

Hilary asked what was the purpose of a pension scheme? Answer: to pay the right amount of money at the right time.

Assets are needed to make sure that the right amount of money is available to pay the pensions as they are needed. Other issues such as
Liability-driven investments (LDI) have no impact on the amount of pension and are a distraction.

The argument that you need assets to pay for the last man (or women) still in the scheme is self defeating.

You should focus on future income streams. Valuations should be periodic checks but you need to play the ball from where it is and look forward, not look back.

Valuations are used for the wrong things. Expensive "Buy outs" by of schemes by insurance companies are irrelevant since the Pension Protection Fund (PPF). 

Accounting valuation funding is too short term, buy outs are irrelevant, "Flight plans" or "Glide paths" just move assets into bonds to reduce risk and import the inefficiencies of Defined Contribution (DC) schemes into DB.

Hilary had a Q&A after the presentation with Con chaired by Nicola Smith from the TUC. I asked them the question "What should we DB pension trustees should do next about the "scare mongering" about deficits that we have heard about".

Con said we should be prepared to challenge our actuaries. They do not use true and fair value. While Hilary said we must be ready to challenge the Regulator over valuations.  It can't be right that its okay if the reason that no one loses a pension is because they never had the chance to have a pension in the first place.  (Think about this)

Usual health warning that my hurried notes on these presentations on my Blackberry may not be an verbatim acount.

PS It was good to see Jimmy Nolan, former trade union trustee from the Liverpool Docks pension scheme at the conference ask a question. For as long as I have been going to TUC pension conferences, Jimmy has always been there. 

#TUC13 Congress - Fair Pay Fringe with Unions21

"What can unions and policy makers do to make wages fairer?"

Monday lunchtime fringe by Unions21 and Fabians on this key issue.

Meeting was chaired by Chris Weavers (middle) who pointed out in the last 2 years 93% of all British workers have had below inflation pay rises (i.e. pay cuts).

First speaker Liam Byrne MP who wanted us to "batter and punish this government" for what they have been presiding over in last 2 years. The problem is the shortage of work. Big mistake of Tories to cut corporation tax by £6 billion? For what? Nothing invested? Nor more paid out in pay? £480 billion lie doing nothing in company bank accounts. Small business should get this tax cut. Bringing forward capital investment has recently been recommended by those left wing nutters at the IMF.  

Nicola Smith from TUC was next who told us real wages have been falling for the the longest period since the 1870s. She made the important point that wage growth in UK is measured on "mean" pay levels (the average - which includes all very high earners who distort wage growth) rather than using a "medium" measure as other countries. This means that the cuts in wages may be even worse for the low paid than we think.

Ged Nichols, General Secretary of Accord spoke about when he started working in finance the wages were not very good, but you had final salary pensions subsidised mortgages and a career structure. Now you just get the poor pay. He argued that there is no evidence that Performance Related Pay works. Customers have become "commodifed" and this resulted in the mis-selling scandlas. He wondered why no senior managers had been disciplined for PPI scandal? 

Equity General Secretary Christine Payne wanted the law to be changed over minium wage so that the union could take enforcement action on behalf of members. Many actors are too frightened of victimisation if they take make named complaints against employers for failing to pay the minimum wage.

My question was about how a living wage is not enough and we need "fair pay" which included a living pensions and sickness benefits and how we need wage councils to get fair pay in many sectors who can afford more than a living wage rate. Which as you can imagine no-one on this panel disagreed with.

UNISON Pay, Bargaining and Equalities Seminar 2012

On Thursday I attended this national UNISON seminar at our headquarters in Euston. Jane Carolan, NEC, Chair of Service Group Liaison welcomed us saying that the traditional response by the union to serious disputes with our employers had been industrial conflict, that option will always remain but we also need to consider other options. We had a presentation on the "Economic Overview" by Nicola Smith , Head of Economic and Social Affairs at the TUC.

After a Q&A there were workshops on "Outsourcing and procurement"; "Attacks on terms and conditions"; "Negotiating with the private and voluntary sector" and "Bargaining". Then there was a presentation on UNISON Pay Strategy by our General Secretary Dave Prentis and Assistant General Secretary Karen Jennings. This was followed by a reception in the Atrium with speaker Anna Bird (Fawcett Society - see picture). On Friday morning Alistair Hatchett, Head of Pay and HR services from the IDS gave an entertaining account of how the Tories and the Tax Evaders Alliance deliberately distort and mislead on public sector pay. After the last workshop, Mike Kirby, Regional Secretary Scotland spoke on "making the best of the Coalition Government, a perspective from devolved nations".

I am pleased that UNISON is taking the education and development of its activists seriously. Not just the nuts and bolts of bargaining and negotiating but the wider economic, social and economic framework.