Simon Eagle is not your common or garden pension salesman. He is a mild-mannered actuary with a mischievous smile and a stammer that he has bravely overcome.
When he claims that CDC beats drawdown by 57%, we should listen up.
I am 59 and using (the largely discredited) 4% rule, I could draw down at 65 £25,000 pa or Simon’s 3.5% (safe rate) £17,500. My ears prick up at the thought of a whole of retirement pay rise from £17,500 to £27,500 pa.
Is Simon Eagle a pension scammer?
If your common or garden pension salesman offered me a 57% whole of retirement pay rise , just for switching to his pension plan, you would give him the bum’s rush. I know a few tweeps (and the bearded wonder) who would need no second invitation.
But here are the five reasons why I am looking to CDC to provide me with a pension.
- I need more from my pension pot than I can get from an annuity or a safe rate of drawdown
- I want a wage that lasts as long as I do and has built in inflation protection
- I’m prepared to take my chances that pension increases don’t come through and am not afraid to take the odd pay-cut.
- I do not want to be worrying about pension decision making – especially as I get into the later stages of retirement
- I understand and accept the basis of Simon’s bold claim. Unlike DB pensions and annuities, CDC pensions don’t have to be subject to locked down investment strategies and unlike drawdown pensions, they aren’t subject to the ruinously expensive advisory costs and wealth management fees that make drawdown so risky for all but the experts,
Salesman Simon Eagle is no scammer – he’s just a very bright man who has integrity in spades. Thank goodness we have actuaries like him who have the courage of their conviction.
Putting our money where your mouth is….
There is a sixth reason which I will admit to. By wanting it, I hope I can influence some of the people who are in a position to me getting it. Among them I include Simon, who works for a consultancy that provides Britain with one of its most successful master trusts – Lifesight. Willis Towers Watson could soon be one company with Aon. Aon offer the Aon Master Trust, which like Lifesight , has over £2.5bn in assets and carries the retirement hopes of hundreds of thousands of savers.
I am waiting for both WTW and Aon to announce firstly that they will be opening a CDC section of their master trust as soon as regulations allow. Simon told the Corporate Adviser master trust conference that he expected to see the regulations for master trusts in place by 2022. In a conversation with TPR’s David Fairs yesterday, I gathered that CDC secondary regulations are “in plan” for the spring of 2021. On a Friends of CDC call on Thursday I asked salesman Simon and Aon’s CDC-guru Chintan Ghandi if they were thinking about CDC pilots. Right now the answer is “no”, but that won’t stop me asking (again and again and again).
The second question I’ll have for them – once they’ve got the CDC pilot agreed, is how I can transfer the AgeWage workplace pension from its current provider – to the new CDC offered by WTW-Aon.
And in case anyone from Aon or WTW are worried about over-promising, I will emphasize that nothing – nothing – has been promise by salesman Simon or guru Chintan to me or any other friend of CDC – yet!