Governance not glumervance


I am for good DC governance but I am not for DC glumervance. Glumervance is “glum governance” as preached by the puritan new model trustee.

This is how on trustee firm explained the new measures for savers in the DWP Command Paper

“the Government announced that it will be ramping up the pressure on the trustees of Defined Contribution pension schemes….” and continued. “We’d love to help you comply with these new rules”.

So what should we do? Outsource governance to the (paid) experts (able to withstand Government pressure)? De-risk and turn what once was a philanthropic activity into an “exercise in glum”?

This is not what’s needed.

Pensions have been written under trust law to protect and enhance the interests of the trust’s beneficiaries. Governance should conducted enthusiastically; compliance should be the framework not the end product.

The DWP’s command paper talks of conflicts of interest. But here’s a conflict no one wants to talk about. The more you highlight the pressure of the job, the less likely you will be to see home-grown trustees. The rise of the professional trustee is like the growth in grey squirrels; it’s at the expense of the red squirrels who drew us to the woods in the first place.

It’s different with DB; the titanic struggles over funding require professional trustees as referees and coaches. But in DC, where the risks like the charges are borne by the member, the Trustee can concentrate on a simpler process of improving a member’s financial circumstances in later life.

If we allow DC governance to be overtaken by the grey squirrels, then we risk turning it into a box-ticking, risk-reducing , joyless business which will replace “member’s interests” with compliance and “member engagement” with “trustee duties”.

Which is not to say that trustees need to be light-weight. Those governors we most admire are able to transcend rules and through the force of personality produce great things for their beneficiaries.  Alan Pickering, Paul Trickett and Alan Herbert-these are red squirrels, light-hearted but deeply serious. Ask any Londoner for their favourite Guvnor, chances are they’d name Boris.

Our current pension minister’s a red squirrel; he’s entertained us with fire extinguishers, baked beans and Lamborghinis but never lost focus on delivering a pension system that works.

The Pension Play Pen’s a red squirrel; it’s never taking itself seriously but it has 4,500 souls committed to the task of “restoring public confidence in pensions”.

You don’t have to be a puritan to be effective! The scaremongering that goes on in our industry in the name of governance does us no service. We must stop talking of governance as simply risk reduction and promote instead the positives of financial security in later life.

Sadly, the majority of trustee boards are simply not up to this job. The best they can aspire to is uninspired compliant box-ticking. To misquote a puritan- “they have sat too long- in the name of God (they should) go!”…. as they have in the Netherlands where the number of pension funds in the  has fallen to 380 (of these 70 are in the process of wind-up and a further 60 are in special measures). KAS Bank estimate that in three years’ time, only 100 will remain.

Here’s my manifesto for change!

Less Trusts- more trust.

Outcomes first – rules second.

Governance not Glumervance.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Governance not glumervance

  1. Con Keating says:

    Well said Henry

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