Not as boring as it sounds!

I arrived late for PMI’s “master trust symposium” , held yesterday at the swanky Waldorf Hotel. Thankfully there were no horses in the street to greet me , though I did bump into a purposeful Ruston Smith on the pavement outside, on his way after delivering his contribution. His was one of many that I would have liked to have heard.

Inside the symposium , it was good to have two young chairs in Helen Ball and George Currie. I missed Helen in the morning but enjoyed George in the afternoon.

I’m pleased that Steve Webb referenced his recent Pension PlayPen meeting and the correspondence that has created. Many of the leading lights in the discussion on dashboards and these magnetic small pots were at the event and it was good to see the newly emancipate Martin Freedom joining the swelling ranks of independent pension consultants who know about technology.

The most telling contribution of the talks I did manage to attend came from Rosalind Knowles of Linklaters. She ran us through the various Government initiatives around support for members of occupational schemes and was asked what was the most important matter to be got right. It was good to hear a straight answer to a straight question , the answer was “decumulation”.

In a later session Fiona Brown, Head of Pensions and Benefits at Rolls Royce was equally adamant telling the audience that at a recent event she had been told that when asked if DC savers wanted a wage for life solution from their pot, 100% said yes.

The mood music of the afternoon was very much about how pots become pensions. Of course this is a favorite subject of this blog , along with getting value for money out of pensions. I’m glad that these matters are finally getting centre stage. Whether the wage for life is non -guaranteed – as in a CDC pension or an investment linked annuity – or whether guaranteed – like a DB scheme pension or a guaranteed lifetime annuity, people want the freedom not to have freedom!

The move towards a default approach to “decumulation” is interesting. Of course you can lead savers to water but they still have to hand over their bank details to get a drink. You cannot set up a payment system to give people income or lump sums into retirement unless an active decision is taken. The true default – the setting of an investment strategy or contribution rate in accumulation requires no action from savers.

This is often over-looked.

I started out as a life insurance salesman getting members of the public to write a cheque for the first premium and signing a direct debit or standing order to take subsequent amounts. Savers also had to sign an application form confirming they understood what was going on. That was quite a high bar for many of the people I “sold” too.

We should not under-estimate the mental strain that decision making on the conversion of pots to pension creates. It is not as simple in people’s minds as we think and even if we have complied with all the requirements to safeguard customers, our consumer duty is to make sure that the decision is taken with the full confidence that the customer knows what is going on.

So I very much support FCA initiatives to deliver targeted support and simplified advice to people taking these decisions. I look for a revival of Pension Wise and the increased promotion of Money Helper . I hope that CDC becomes something people can choose as a way of converting pots to pension and I hope that other innovative means are found to narrow the gap between DC and DB when savers want their money back.

It is not for nothing that my two companies are called the Pension PlayPen and AgeWage. I consider the payment of pensions as the proper function of a pension scheme and am a firm believer in choice in how people get this done. So power to the Pension Management Institute, if the whole day was as focussed as the sessions I saw in the afternoon, the Symposium must have been a hum-dinger.