The Pensions Network held an excellent breakfast meeting this morning that included a grumpy Steve Webb (late night in the house?) and a variety of great speakers giving us an elevator pitch on what makes for good.
Apart from the usual sparring between NEST and L&G this was a pretty sedate affair with a lot of nodding heads at statements of the bleeding obvious, mixed up with some insiteful stuff from Tim Jones, Adrian Boulding, Yvonne Braun, Alan Higham Chris Curry (the new PPI supremo) and especially Doug Taylor of Which.
One thing that is becoming clear to me is that whoever is speaking for the companies sponsoring workplace pensions, it is not going to be the NAPF- not unless they significantly raise their game.
The NAPF are putting a lot of store by their Pension Quality Mark which they hope to become the recognised quality for workplace pensions. To date they have 175 companies signed up (and there are sign-up fees). You can read about it here
If the NAPF want to provide a nationwide pension benchmark, they need to start speaking to and for all the employers of Britain , not just the pension intelligentsia.
Pension Quality Mark is not getting traction beyond its core membership
A few weeks ago, I invited the NAPF to work with my site www.pensionplaypen.com to promote better standards of governance and higher levels of contribution to the 1.2 million employers that are not members of the NAPF, don’t have a meaningful workplace pension and have no idea what PQM is.
Since then I have heard nothing.
The NAPF needs to collaborate for the common good
I don’t speak for workplace pensions any more than the NAPF do, but I’m prepared to stand my own money on a website and on services that set out to restore some faith in public pensions. It greatly saddens me that the trade body that I subscribe to is uncomfortable to enter into a simple agreement that can give PQM a free ride.
The NAPF, unlike the ABI and the IMA who are moving forward, seems to be determined to spend its time in battle with other trade bodies. It calls for tPR and FCA to work as one, yet it cannot work towards the common good within its sisterhood. The NAPF’s failure to promote the ABI’s code of conduct on annuities to trust based occupational DC schemes is incomprehensible and inexcusable.
Tom Mcphail tells me that they are beginning to come to the table so “better late than never”. The fact remains that the NAPF are following not leading on DC issues – whether at employer or consumer level. This goes for the PQM too.
The NAPF needs to make PQM a user-friendly kitemark that isn’t a barrier to entry.
Everything that we have seen about auto-enrolment so far draws us to one conclusion.
Auto-enrolment works because it makes things easy for people.
The only people auto-enrolment hasn’t been easy for so far has been the early staging employers who have had to work with unsimplified regulations and pioneer many of the processes and practices that will be normalised for those staging in future.
The NAPF’s solution for the 1.2m employers many of whom are as green to pensions as the employees they will be enrolling is to put up three road blocks. To get along the road the other side of PQM, you need to contribute substantially more than the minimum auto-enrolment scales. And you need to set up a governance structure within your organisation. Thirdly you need to pay an initial and annual fee to the NAPF to be credited.
This is not called making workplace pensions easy.
I question whether setting a governance committee up at employer level is either feasible or productive. I know it will be a greater burden on smaller companies than larger ones.
I also question whether the NAPF have any business interfering in the reward strategy of employers. Determining minimum standards on a qualifying workplace pension scheme is one thing, but deciding on a minimum contribution for a “trying” employer well in excess of AE tiers is another.
I don’t question the value of accreditation but I think you pay for something that gets peer group appreciation and unless the PQM becomes relevent to the “pensions uninitiated”, it will not get their money.
For PQM to appeal it must have mass appeal. It would be better to focus on the efficiency of the scheme and in particular on DC outcomes than on the financial and human resource that a company should be throwing at the scheme.
So howabout PQM lite- something that smaller employers can aspire to?
Companies can do much to improve the pensions their staff get without a large expense of money. They can negotiate the best charges for staff, investigate and ensure they get a good default investment option , make contributions more efficient through the use of salary sacrifice and provide staff with real help at retirement by making a good annuity broker available to staff. These things improve outcomes without limiting the company’s ability to pay good wages and invest for the future.
The NAPF has no real understanding of SME and micro employers, they have always pitched to the big schemes run by large employers . In three years they have picked up 175 customers for PQM, a lot of them big schemes.
Some of those schemes have been introduced by my company, the PQM works for members of the NAPF.
But PQM is failing to become a household name. PQM is not a national standard and the NAPF does not speak for the 1.2 million employers that are not their members.
If the NAPF wants to become a relevant trade body beyond the narrow coterie of its existing membership, it will need to start listening to people like me and working with organisations that are set up with the small employer in mind.
The NAPF must democratise itself if it is to continue to speak for pensions
Somebody needs to speak for workplace pensions, it should be the National Assoication of Pension Funds and it is frustrating that while the ABI and IMA are prepared to listen and co-operate, the NAPF remains obdurately aloof.
- Can social media play a part in pension scheme governance? (henrytapper.com)
- Everybody need standards (henrytapper.com)
- Government outlines new plan for pensions pots (standard.co.uk)
- Has Webb scotch’d the commission snake – or killed it? (henrytapper.com)
- Do consumers benefit from risk-based pricing? (henrytapper.com)
- A method to chose your workplace pension scheme. (henrytapper.com)
- Steve Webb’s water-cooler moment (henrytapper.com)
- Bridging that advice gap – 43rd London Pension Lunch (henrytapper.com)
- The sins of the past (henrytapper.com)
- No learning without doing! (henrytapper.com)