At an unusually passionate lunch, notable for the absence of the principal villain, Michael Johnson, the Play Pen set about putting pensions to rights.
For those not in the loop, the Telegraph posted an article espousing the views of the aforementioned Johnson which claimed that such were the structural inadequacies and so badly was the reputation of the pensions industry “shot”, that pensions as we know them would be dead by 2050. It was this contention that was under discussion.
These were the playmates who sat down to eat a pie and drink a pint at the Counting House on Monday 7th January 2013
Con Keating – Brighton Rock
Henry Tapper -First Actuarial
David Taylor – OCP
David Parks -PQR
Stephen Cohen – CEO of Governance for Owners
Lucie Boyes of Mattioli Woods
Charles Tatham – Chairman of Charles Tatham
David Hargreaves – Founder – the Pension School
Robert O’Donovan – Radcliffes Le Brasseur
Joan Desmond – Speechly Bircham
Peter Weiner- Pensions Trust
The vote that concluded the debate suggested that on the substantive issue – will pensions as we know them today be around in 35 years time, the answer was an unqualified yes.
But there was an eerie sense of “parallel universes” in the room. The world inhabited by Con Keating and the collectivists which saw pension savings as a collective means to extend the “triple-locked” state pension and those who considered pensions as a “tax wrapper” for the accumulation of private wealth.
The Michael Johnson agenda clearly plays to the latter group and there was consensus among those primarily interested in financial education and planning, that pensions were currently in big trouble – their distribution wrecked by RDR and their reputation for delivering to promise in tatters. Yet there was optimism that these troubles were temporary and that through Auto-Enrolment, the RDR and the drive to more open and honest charges, the public could be won round.
But for the collectivists, Johnson’s position was considered at best irrelevant and at worst deeply disturbing. Clearly Johnson has credibility at the highest level of politics and the concern expressed was that Johnson’s paradigm contained no space for the collectivism that underpinned the broken UK DB system, nor the partially broken Dutch DA system nor indeed a system of collective insurance that we might call “welfare”.
In as much as Michael Johnson’s paper was a “call to action” for both the collectivists and for those pursuing the “financial empowerment” agenda, the lunch was a demonstration that provocative as he is, Johnson has indeed created a disturbance that the traditional pension establishment has failed to do.
We may not think his conclusion right but we cannot ignore him. But there were two aspects of the lunch which added to and went beyond the arguments in “Put the Saver First”.
- The vision of financial empowerment that underpins the individualistic approach to retirement provision is inadequate – a collective system is needed at least in parallel and almost certainly as the prime means of funding people’s retirement.
- A sense of humour is required in these matters. For people to feel confident in their pensions we need a little more of the spirit of Bo-Jo and a little less of the earnestness of M- Jo!
It was a great shame that Michael was not at the lunch!
- Pensions dead by 2050 – taking the Michael? (henrytapper.com)
- Savers put themselves first! (henrytapper.com)
- Pensions will not exist by 2050, expert warns (telegraph.co.uk)