If you weren’t in Liverpool for last week’s PLSA conference, do not slit your wrists. You can watch the sessions on youtube.
If you want to hear how product providers see the challenges on them and us- from the remaining phases of auto-enrolment, you could do worse than spend a few minutes watching this.
By the by, if you are looking to chair a panel session, study Jo Cumbo’s chairing – it’s awesome.
NEST justifies its expansion plans
Send the slider to 25.45 ,and hear Otto Thoresen justifying NEST’s plans to create a default way of spending NEST pension pots over time.
Otto does a pretty good job of justifying a spend on building a spending product at the back of NEST and thinks he’s got away with it before he’s mugged by Moreton Nillson and Patrick Heath-Lay (CEOs of NOW pensions and People’s Pensions) on “competition issues”.
Of course he’s well rehearsed, we’ve seen this careful sidestep a few times this month and the next few minutes on the video show Otto under as much pressure as he’s had since appearing at the DWP Select Committee.
Or did the sidestep work?
Well not exactly! Heath-Lay and Nillson spoke expertly. Those listening could hear the annoyance both have for NEST’s evasion and exploitation of its privileged position. NEST really is trying to have its cake and eat it and the questions from the floor should have pinned Otto to the point – “where’s the money?”.
Having spent some time in the rather less precious context of the Battle of Ideas, where I was accused of being a paid up member of the Wankerati, I long for a proper discussion about “competition issues”.
The competition issue lurking in the room like an overfed elephant, was the £450m currently outstanding as NEST’s debt to the tax-payer. The late lamented national audit office is still waiting for a proper answer on how and when that money’s coming back.
As I have written on this blog, all future spend on NEST product must be predicated on NEST having a clear recovery plan so that within a reasonable number of years (no more than 20) we have our money back.
I suspect that the debt is rather more than the £450m in last year’ accounts and rather too close to the maximum drawdown prescribed by legislation of £600m. In any case, the financials of running pensions where the average pot size is £350 (Moreton Nillson’s number), suggests that NEST is going to have to put up its prices or reduce its costs.
Moreton and Patrick’s sub-text was clear, NEST is not going to reduce its costs by introducing a drawdown facility for existing customers. £350 does not buy a pension, it hardly buys you a week in Skegness.
A proper discussion of NEST’s finances is long overdue. It sounds like we have our chair (her offices face NEST’s) and it sounds like the people missing from the debate are members of the tax-payer’s alliance.
If we are to have open transparent pensions that people can trust, we cannot have NEST skulking about behaving in this clandestine way.