“Trust is a fragile thing” – it’s based on sharing.

PerspectiveAlistair Queen of Aviva is a great representative of his company. He curated this graphic to twitter yesterday – and it was well liked.

Alistair’s comment was made in the context of frustration from Jon Stapleton, a journalist who has done as much as many to keep trust in pensions.

How do we square the drain pensions were to the stricken Carillion, with the alternative truth that Carillion have let down (some of) their pensioners. I mention “some of” as it now appears that some of the Carillion Group’s pension schemes may be solvent enough to stay out of the PPF – should a new sponsor be found.

Jonathan Stapleton is right on the money here;

And Jonathan’s bang on the money here.

Carillion’s behaviour has been judged “egregious”, but it paid out almost as much to its pension scheme as it did to its shareholders. The truth is there was not enough coming in to meet the expectations of both sets of stakeholders. This is how business failures happen.


Which is why perspective is needed.

That the UK DB model is broken – at least for the corporate sector, is not in doubt. For every Unilever (who yesterday announced it was ploughing another £600m into its pension to halve its deficit) , there is a Carillion. There is not enough profit being generated to meet the reasonable expectations of shareholders and accrue future guaranteed pensions.

That is why Joanne Segars and Andrew Warwick-Thompson (and other pension stalwarts) have run to the higher ground of local government pensions. Up there, conversations like those between Stephen, Alistair and Jonathan, aren’t necessary. The tax-payer – particularly the council tax-payer, has a limitless capacity to meet pension obligations. Indeed many of us are paying more into other people’s pensions , than we are into our own.

It is easy to get a perspective on the pension problem if it isn’t your problem.

It’s not so easy to trust pensions -if you’re losing some of yours!

Trust is a fragile thing, and every Carillion makes trust a little harder to restore.

Some of us, the Friends of CDC, are arguing for a new type of pension sponsorship, where risk- if taken by an employer, is taken on a DC basis and risk, when taken by members – is shared collectively.

This is an even more fragile concept, you would hope that a minister for pensions would be receptive to it. Sadly yesterday brought news of a leaked letter from Guy Opperman (the Pensions Minister) which suggests he is not in problem- solving mode (yet).


Hopefully, the Minister’s position is as wrong as the headline;- the Government put Defined Ambition on Ice in the summer of 2015, it has been in the fridge ever since.

The report in FT Adviser, is based on a leaked letter to former Shadow Minister, Jack Cunningham. Apparantly our pension system

“needs time and space to adjust to other reforms underway,”

and  it appears that

risk sharing is an area that the government will “revisit once there has been an opportunity for that to happen”.

If I were to put a little perspective on these comments, it would be this.

If Government was to wait to see the consequences of its actions;-

  • we would still have Darren Reynolds selling 5Alpha to unsuspecting steelworkers.
  • We would have a plethora of dodgy master trusts bottom feeding in the auto-enrolment shark-pool.
  • We would have the vast majority (not the tiny minority) of companies pre-packing their DB plans into the PPF.

The reason we have a stable pension system in this country is that Regulators are getting it right most of the time, and when they’re not they have people like me tweaking their tails.

The Minister for Pensions and Financial Inclusion (to give him his chosen title), does not know about CDC and he’s not showing any great inclination to learn about it (trust us, we’re trying).

However, those who are at the FCA and the Pensions Regulator and at the DWP and even at the Treasury, do want to know about CDC, as they see it as a way of solving problems, not creating them.

Trust is a fragile thing – it’s based on sharing

Over the next few weeks, I and my colleagues will be trying to convince our Pensions Minister that he is wrong in assuming that

“significant legislation” for CDC schemes to come to life would need to be introduced, and the existing rules would need to be changed.

We would vigorously contest this statement to Alex Cunningham

 “We continue to believe that significant legislation would be needed to enable and regulate this type of pension.

And we seek to change this position, which has prevailed for the past three years and is blocking progress towards restoring confidence in pensions.

“Whilst we continue to be interested in collective pensions, the governments view is that because the breath of its scope, the legislative framework set out in the 2015 Act is not the most effective way of introducing the provisions needed to provide for the collective schemes currently being called for.”

If Guy Opperman wants to hear why we think he is wrong and how CDC could be offered to the 140,000 postal workers who want it, he should come and talk with us. We have made the offer and we keep it open.

Even politicians can get some perspective by listening to others! We have answers and we want to share them, does our Pensions Minister want to share time to hear them?

Thanks to Maria Espadinha of FT Adviser for her timely and helpful edits

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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