Monday, 22 December 2014

Ten Pension Predictions for 2015

1.       A lack of clear and detailed regulation relating to the new pension freedoms.

As April draws near, many will be shouting loudly for clarity on detail, but it won’t arrive. Political parties will be in election mode and the April ‘new start’ will be hindered by poorly thought out regulation.

2.       Increasing pension scams.

Inevitable with the new pension freedoms. And frequent too, until the new systems get bedded in and the new government knows what to do.

3.       Appalling pension headlines.

Probably led by the Daily Mail as usual. People defrauded of pensions. People confused by the new freedoms. Anything to sell a paper.

4.       Quiet success with new products offering good customer value.

Probably won’t make the Daily Mail, but many providers will successfully navigate the new legislation and come up with quality, innovative products at a reasonable cost.

5.       New quality systems.

This has been ongoing since auto-enrolment was announced, but providers are making good strides with new data management tools integrated to pension provision. Again, unlikely to trouble the Daily Mail headline makers.

6.       Covenant worries.

No predictions here on a Russia collapse, Islamic militants and all the rest, but whatever happens in the world affects investments. And with that in mind, trustee covenant concerns regarding the remaining DB plans will increase.

7.       Adverts relating to not cashing in your pension.

As the new freedoms kick in, how long before we see adverts and articles relating to the need to think before you spend?  In Australia (a country we seem to be mimicking re pensions) it’s called ‘double dipping’ - people who spend their pension and then live off the Sate.

8.       Strengthened DC governance.

Whatever government is in power, I expect some firmer legislation around DC governance and management, akin to trustee governance.

9.       Pension Apps that work.

With a continued move to everything being in front of you on a smart phone, pension apps will come of age.

10.   Closure of small and medium pension schemes.

Whether DB or DC, there will be closures, mergers and buy-outs of smaller schemes, as the new legislation and auto-enrolment continue to change the landscape.

Wednesday, 26 November 2014

Pragmatic Steps Into The Unknown

I welcome the common sense approach adopted by the Treasury in not, after all, trying to fine individuals who take a pension pot and fail to advise earlier pension providers they also have benefits with.

The revised guidance extends the deadline from 31 days to 91 days and that states that only active providers need be contacted. This gets around the problem that individuals may well have pensions with providers that they have simply forgotten about. I know that shouldn’t happen, but not everyone loves pensions as much as me – and you, presumably, as you are reading this.

Common sense has prevailed.

The major problem remains however.  I’m not sure anyone, including the government who introduced the changes, knows exactly what is going to happen when the full freedoms on pensions come into force. Will there be reckless decisions to cash in pensions? Will advice be adequate? How will the government react to those who take, spend and then come back, begging cap in hand?

One thing is for sure. To change the analogy, the genie is out of the bottle and no future government will be able to put him back.

A pragmatic step by the government with regard to individual fines. But nevertheless, it’s pragmatic steps into the unknown.

Friday, 14 November 2014

Pensions Longevity of a Different Kind

A big WELL DONE to Stephanie Hawthorne of Pensions World on achieving twenty-five years longevity as editor. In a pension’s world where longevity is regularly in the headlines, it’s great to see a living example in the Pensions World.

Our world is often one of short termism, so great to see a journalist showing a different example. And winning the special “Award for Outstanding Contribution to Institutional Journalism” from State Street along the way. Here’s to the next twenty-five.

Wednesday, 5 November 2014

Giving it the Bird

Congratulations Pension Expert. You valiantly resisted birdie jokes alongside the article on the RSPBs underpinning of their pension scheme. Only three were in evidence: The RSPB ‘hatching a plan’ 'broader flightpath' and 'migrating assets'.

However, I have no such qualms. It seems to me the RSPB have avoided nesteggs, shunned feathering their nest, seen the wood from the trees in their flightpath and adopted an early worm approach with regard to the recovery period.

Their approach could act as a beak-on for other plans. I noticed Tom Dines was the author of the article. Trust he's eating chicken tonight. Okay, not the best bird jokes, I know. Guess I may not tweet this one. :-)

Wednesday, 15 October 2014


The announcement that the NAPF and PMI are likely to merge is an interesting one.

Both are citing improvements in management, pooling of resources and greater influence in the industry. But I guess it also reflects a decrease in DB schemes, traditionally the ‘bread and butter’ for the NAPF. They came to embrace DC rather late in the day and I’m guessing not so many DC schemes are interested in being part of (and paying a fee for) membership of the NAPF.

Of course, the NAPF gets a lot of support and income from consultants and providers as well, but if they can’t claim to be speaking for company pension schemes as well, there’s a problem.

As for the PMI, they came out of the Chartered Insurance Institute originally and have kept close to their original remit of maintaining and promoting pensions excellence through professional exams. I’m not so sure what’s in a merger for the PMI –unless of course they are low on volunteers which would be pretty essential for their continuation.

All in all, it’s a reflection of a decreasing profile for employer sponsored pension plans. And with auto-enrolment and the new proposed tax changes, that decrease will pick up pace as companies embrace standard industry products.

Not the happiest of backgrounds for the NAPF conference which starts today.

Tuesday, 14 October 2014

Ninth But Slipping

We’re ninth again. The same as last year. But for how long?

Mercer’s Worldwide Global Pension Index puts the UK behind Denmark, the Netherlands, Australia and Chile among others, but well ahead of France, Italy, China and India.

The warning is though that with the new reforms (the Taxation of Pensions Bill was published today), we will slip down the rankings. More freedom to take a pension in various forms comes with a health warning. If savers can’t manage those savings well and spend their pension pot before they die, then they fall back on the State. It’s happened in Australia (called ‘double dipping') and could happen here.

In the name of freedom, our rankings may fall.

So much depends on good communication and advice. Osborne is enjoying positive pension headlines today with the publishing of the Pensions Bill, but if the government don’t back it up with adequate education and advice, we’ll be slipping down that table.

Saturday, 11 October 2014

Why We Provide A Pension

Here's a good reason why we work so hard to ensure there are pensions for people.