“NO!” to the PLSA’s self-serving proposals



I write as Henry Tapper , not First Actuarial, First Actuarial is a member of the PLSA and will have its own response to its DB’s Taskforce’s Opportunities for Change. A timely response now can lead to a more considered response later. What are we to make of the occupational pension scheme’s trade body issuing the press with this headline?

Millions may lose promised pension payout?

and the subsequent statement

Three million savers in final-salary pension schemes only have a 50/50 chance of receiving the payouts they were promised

Were this a report issues by a scammer in Marbella, I would have been appalled but not surprised. That this report has been targeted at the BBC by the Pensions and Lifetime Savings Association is a disgrace.

Much as I disagree with John Ralfe on other matters, I join with him in roundly condemning the PLSA for self-serving sensationalism of the vilest kind. They are putting the colly-wobbles up literally millions of people expecting  a DB pension so that their plans for “superfunds” can get some traction.

Here is John Ralfe as quoted by the BBC

 John Ralfe described the superfund plan as “outrageous”. He said there was “no crisis in defined benefit pensions, so there is no need for crisis measures” owing to a well-funded lifeboat system for collapsed schemes.

“The PSLA is trying to undermine all the safeguards put in place for members since the 2004 Pensions Act. It wants to turn the clock back to the days when companies could walk away from their pensions without fully funding them,” he said.

The detailed analysis of the Taskforce’s proposals will follow. We know them to be based on assumptions that take a deeply pessimistic view of the future both in terms of the maths and of employer’s attitudes to funding pension promises.

The PLSA is struggling to find some meaning. I have suggested for some time that it decides who it is representing and do something about representing them. Instead , we can give the report a better headline

“It has not come to praise pensions but to bury them”

In 2015 George Osborne delivered a budget that told people that he’d have to set them free from buying a pension with their pension savings. The pension freedoms are understandably considered “Freedom from pensions” as a result.

These proposals are as ill thought through as Osborne’s, and quite as dangerous. They can properly be compared to the report of Richard Beeching and the Beeching report.

In the 1960s Dr Beeching concluded it was in the national interest to rationalise the rail network by scrapping all but the most used lines. In doing so he destroyed the travel infrastructure for many small towns and villages, the railways have never returned.

The scrapping of our small DB pensions in return for superfunds, breaks the link between employers and good quality provision in favour or precisely the false efficiencies that Beeching proposed.

Small turned out to be beautiful and today we have seen precisely the upturn in rail traffic that could have justified continuing with the original rail system. The scrapping of small DB schemes at a point when they are at a low ebb would be a national calamity and disgrace.

This deeply irresponsible report with its heinous promotion will throw fuel on the fire of the scammer’s endeavours, destabilise the thinking of ordinary people fearful of losing their pension schemes and create yet more political uncertainty.

Instead of proposing these ill-thought through superfunds, the PLSA should be working with sensible practitioners towards better forms of risk-sharing. They should be talking with Terry Pullinger of the CWU about how his members want to work with the Royal Mail to establish a scheme that can provide the postal workers with an affordable wage for life.

The PLSA could be talking with the Labour party about the proposals they are putting forward to take on the legislation established by the Coalition government to allow this risk-sharing to happen.

The PLSA could be promoting alternative means of funding DB schemes based on a more optimistic approach to paying pensions, they might even be promoting keeping DB schemes open! The FABI index is a boon to such a pensions view, the PLSA have chosen to ignore FABI, the unions proposals for the Royal Mail and the Labour Party’s proposals for risk sharing.

This is because they are paddling their own little canoe and not collaborating with anyone other than an elite group who run its DB taskforce.

I am genuinely saddened that the PLSA, which I have supported for many years, is now no more than a cheap adjunct of the pension de-risking industry. Whatever vision it had, has been exchanged for these sorry headlines and sorrier report.

A shame on the PLSA and its DB taskforce, this is no way to restore confidence in pensions.



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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6 Responses to “NO!” to the PLSA’s self-serving proposals

  1. Jon Spain says:

    Excellent, thank you

    On 28 Sep 2017 07:09, “The Vision of the Pension Playpen” wrote:

    > henry tapper posted: ” I write as Henry Tapper , not First Actuarial, > First Actuarial is a member of the PLSA and will have its own response > to its DB’s Taskforce’s Opportunities for Change. A timely response now can > lead to a more considered response later. What are we t” >

  2. Adrian Boulding says:

    Henry, my own eyes were opened to another alternative this week when I attended a presentation by Deloitte on their DB master trust. It’s a way of bringing small DB schemes together and realising cost savings whilst still preserving the members DB promise for all with meaningful sized pensions. I thought it had some neat features (I have no connection with Deloitte). Adrian

  3. Gerry Flynn says:

    Well said Henry, shame I got the newspaper wrong when I compared the PLSA headline to the Daily Mail, It should have the Daily Express as evidenced by today’s front page.

  4. Con Keating says:

    I have shown their fifty percent nonsense to be just that at the time of their last report. It is interesting to note that the PPF also does not see any such development – their modelling shows only very modest growth of scheme liabilities in their care. And they are putting our money where their mouth (or perhaps better modelling) is.
    The report so far is a disgrace – I have not finished reading it yet as I have to keep breaking away because my blood pressure is out of control. I doubt that anything in the final pages can redeeem it.

  5. Antony Barker says:

    But surely the PPF which Ralfe highlights, is actually the original superfund, demonstrating that a fully professionally managed structure, free from sponsor/consultant exhortations, can focus on the genuinely long term financing of its liabilities, achieve economies of scale and pursue more direct investment strategies to enhance returns??

    The Dutch and the Australians have made a pretty good case for consolidation, as have the Swedish AP-fonden. The PLSA article may have a number of flaws but private sector pooling isn’t one of them.

    • henryheskethtapper says:

      To properly answer this- read previous articles- especially Con Keating’s. Pooling assets makes sense, polling liabilities this way- makes no sense.

      This is an arbitrage deploying the favourable solvency rules accorded one set of players against another. This is not a basis for changing the fundamental promise.

      The proposals have little merit and are poorly promoted.

      Sent from my iPhone


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