Pensions -No engagement without ownership!



It is generally accepted that ownership implies accountability. Ownership is  the word we use in business to say we’ll take responsibility for the outcomes of an action; as in “I’ll own this one”.

We’ve learned that unless someone owns a problem, you shouldn’t expect any positive action; as the title says – “no engagement without ownership”.

Nowhere more than in pensions

One of my frustrations with the DWP’s attitude to pensions is that is has traditionally put the ownership of the pension at several removes from the beneficiary. The financial adviser or investment consultant, the trustee, the investment manager and the pensions administrator own the pension problem. In an occupational pension, the beneficiary is as far removed from the benefit as can be.

This model of ownership, one that’s been described as benevolent paternalism, is still prevalent in the DWP’s (and tPR’s) attitude to auto-enrolment rights. Members do not get to choose their pension, they do not get to invest their pension rights and they are all but discounted from the reckoning in the management reporting that comes from DWP HQ.

At a recent meeting at the DWP, it became clear that despite the clear statement in auto-enrolment regulations that it is the employer that chooses a pension, civil servants and the various trade bodies that guide Government Policy (ICAEW, CIPP, FSB,ICB,CBI etc) consider the task of choosing a pension , beyond most employers.

This is a grave error. Were employers engaged in the decision about a pension, they would own that decision. But instead the FSB thrusts L&G upon us, the ICB thrusts Aviva upon us and the Government thrusts NEST upon us. Each institute, trade body and Government Department knows best. The employer – it is assumed- needs to be herded into the right pen.

But employers are not sheep or cattle or swine! One distinctive characteristic of a small business is their fierce independence from big business. Granville- “Open all hours” sticks two fingers up to anyone who threatens his right to do things his way. Small businesses are owned by people like Granville who don’t like being pushed around.

If these small employers had no choice of workplace pension, they would take no ownership of the pension. Sadly, I think that many of the trade bodies and institutes I sat round a table with, had no interest in giving their membership ownership, and nor (it seemed) did the DWP.

I’ll say it again, this is a grave error. Until recently we didn’t trust people to spend the pension pots they owned how they liked. Then the Chancellor gave them the freedom of choice and those pots suddenly got owned. People now regard their pension savings, no matter how meagre as “their money”. What the success of the Pension Freedoms tells us, is that when people have control of their money, they own their money and start making decisions with that money.

The DWP will not see auto-enrolment capture the hearts and minds of the 1.7m employers still to stage until they get this message. Until employers see the money they pay into their employee’s pension pots as part of what they pay their staff, those employers will not own the pension contribution. The contribution will simply be a tax on income and a tax on company profits.

If we want to turn auto-enrolment from a compliance duty and a tax, into part of the way we pay people and a benefit, we will have no chance in engaging employers, let alone their staff.

We know through countless surveys that employees trust their employers in financial matters. If an employer promotes the auto-enrolment pension to staff as a staff benefit, then staff will proudly participate, will be happy to see contributions ramp up (as they will start doing soon) and may even pay in the voluntary contributions they will need to pay if their auto-enrolment pension is to make a reasonable contribution to their standard of living in later years.

If employers are able to choose a pension, rather than have their pension chosen for them, then the chances of positive engagement in the pension increase, not just by the employer, but by the staff enrolled.

If we deny employers not just the right but the opportunity to make an informed choice we make the auto-enrolment pension as distant as the pension pot before pension freedoms.

Turning a nation on to pensions is an aim that Ros Altmann is rightly calling her #pensionrevolution. But that’s an empty hashtag if employers are given no choice or simply given a list with no means of making an informed choice.

Employers should be engaging with their choice of pension as the first stage in the process, employers should be making themselves suffeciently “pension savvy” to be able to explain to staff why they chose the pension they did and employers should be empowering their staff to take decisions about their pension (such as increasing contributions) once these two first stages have happened.


The Government are obsessed with a high level of compliance by employers with auto-enrolment statistics. At our meeting, the number of compliance notices being dished out by the Pension Regulator’s enforcement team had overtaken opt-out rates as the key measure of success. We had a long and tedious discussion about the quality of data being processed by SMEs and Micros and whether this was leading to errors.

There has always been dirty data, always errors- whether in GMPS, SERP entitlements, DB and DC rights , dirty data is part of the process.

The success of auto-enrolment will not – in ten or even five years- be judged by the minute measurement of data accuracy. Instead it will be judged by the adoption of workplace pensions as a means of securing the earnings related pension we lost at the beginning of the month.

The only way we can get the 1.7m small employers still to stage to adopt workplace pensions as part of what they do, is to make them proud of the pension they run for their staff. This means getting employers engaged with the pension as soon as possible.

While some employers may grow to love the pension that was thrust upon them, most will continue to consider their workplace pension “the Government’s Pension” or the FSB’s or ICB’s pension or the accountant’s or IFAs pension.

The one point we know employers should be engaged with the pension decision is when they sign the deed of adherence or the employer application at set-up. If the employer does not engage at outset, there is a low chance they will ever fully engage. The pension is not theirs , there is no ownership, there will be no engagement.

No engagement without ownership

At , at the end of the purchasing promotion we require the employer – in their own words- to explain why they chose NEST or People’s Pension or Aviva or whoever. We make it absolutely clear that those words will form part of the audit trail that staff, future purchasers and regulators could follow in years and decades to come.

By engaging in writing this sentence, the employer is signing to say that it is his or her decision, not the Government’s , or the accountant/book-keeper/IFA’s and that the employer is accountable for that decision.

When I said this at the meeting, arms went up in horror. But this is what choosing a pension means. Coming back to the words at the start of this article, choosing a pension is the employer’s job, the employer is accountable for that decision because he or her has taken the responsibility of choice.

To me this responsibility is one that most employers would be happy to take if they had the education tool needed to make an informed choice. I am pleased to say that employer by employer, adviser by adviser, we are getting there!



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to Pensions -No engagement without ownership!

  1. Peter Weiner says:

    Freedom and Choice is a success? Surely we won’t know this until some time in the future when people have sufficient pension or, should I say, later life income!

  2. henry tapper says:

    It’s a policy success right now- I agree with your assessment of the future!

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