Next Monday (March 6th) the Pension Play Pen will be asking itself this question at its monthly lunch (12.30- partners room, Counting House Cornhill). I am in India and have spent the early hours of this morning tramping the hills of Rajasthan in search of a Bengal tiger, we found a tiger who was upsetting some antelope and I hope that the lunch can find some life in our defined benefit pension schemes.
For while it is one thing to kill a pension scheme or a tiger, it is another to find productive use for them. Tigers – all 66 of them in the hills we visited bring prosperity to the local villages. Driver, guides and wardens find employment, hotels have sprung up, the local railway station is adorned with tigers wherever you look.
But it was not until numbers had fallen to an almost unsustainable level that people stopped shooting them and started treasuring them. I fear we haven’t reached this point in the DB cycle; the question is how much more damage we can do to their population before we treasure them.
The Green Paper sort of asks this question , but does so in such non-partisan terms, that it has been interpreted as a DB tiger-hunt. It asks one big question – “can we afford to pay our DB promise in full” and it arrives at no answer. The answer is of course blowing in the wind (of corporate priorities).
Were DB to perish then there would be plenty of predators picking at its carcass and the feast could last a few years. But to bring defined benefit schemes back, once we have closed this current generation to future accrual will require the kind of national will not seen since Barbara Castle introduced SERPS or possibly since Beveridge launched what we call today the Welfare State.
Steve Bee has been writing a lot about the death of pensions, I don’t have the will to read what he is saying as his observations seem to confirm that Steve has been remarkably prescient, he has seen the demise of DB coming and is not afraid to remind us he is the Pensions Guru.
The question for Steve , as for the people of Rajasthan, is whether life would be better without pensions (or indeed tigers). I think it almost impossible to suppose people won’t need a source of regular income in retirement or that they will be satisfied with the small beer which is the state pension.
Nor can I see our DC plans, as we are currently organising them, becoming pensions in time. They are becoming capital reservoirs to be sluiced but they are not pensions.
So I wish the Pension Playpen lunchers as much joy as I had in discovering a tiger walking across a path not 10 yards from me. Sometimes, what you are looking for turns up right under your nose!