Michael Johnson – the best spokesperson pensions never had

Johnson as he is today

I can understand why Michael Johnson is so angry, he has missed the boat and he knows it. In 2013 he wrote a paper promoting the dashboard as a small pot aggregator and here he is in 2016 telling the Work and Pensions Select Committee that if Government wants a dashboard by 2019 it is going to have to be “resolute”. 

Johnson, like David Harris, now wants a free market in pension transfers and feels the industry is blocking this. He may be right about the industry but he isn’t right in demanding a free market – the complexity of pension’s legislation means that you can’t talk of two pots combining without red flags being thrown around like party poppers on new year’s eve.

The chief advocates of Johnson’s dashboard aggregator are – unsurprisingly – the pension aggregators; but Johnson goes further than even the Pension Beekeepers in his pursuit of simplification and that is why he is not being listened to.

And he doesn’t help his cause by dismissing the recent pot aggregation paper by the small pot working group. Not only was that paper produced in double quick time but it gives the Government a small pots strategy, oven-baked in a highly readable paper produced pro-bono by people who are generally consumerists. This comment posted by Johnson on linked in is just plain wrong!

The recent small pension pots report is the most depressing pensions-related paper I have ever read.

This comment is made out of frustration not from properly reading the paper which argues that the pensions dashboard has an important part to play in aggregation (though not for the smallest pots).

The problem with these small pots is that they are so economically unviable that they can only be aggregated using force majeure (aka Government intervention). Policy is about delivering the achievable, not about fantasy pensions and having been a “one pot for all” man since the mid 1990s , I have not given up on the dream. But we get to “one pot” in stages, with incremental aggregation creating the momentum that can get a few of those disengaged savers thinking about their pots as potential pensions.

Pot aggregation is all very well but if you don’t know what to do with one big pot, you are unlikely to be excited to create one. More important than aggregation is the fundamental issue for DC pension pots – that there is no longer an obvious way to convert them to a wage for life.

Listen to Michael Johnson at the end of the WPS select committee meeting and you hear him make this very point, there is no way to annuitize pension pots other than an annuity. Johnson was right in 2013 and 2016 but he is not right in 2021.

There is a new way to produce income that lasts a long as y0u do , or there will be once the Pension Schemes Bill is enacted and we have the opportunity to tip our small pots into Collective Defined Contribution schemes run by commercial master trusts,

Michael Johnson’s ongoing dalliance with pensions is based on a limited understanding of the possible. When it comes to bringing pots together, he is as off the pace today as he was ahead of the pace in 2013. What has happened between now and then has been the collapse of annuities as default “wages for life”, the proliferation of small pots because of auto-enrolment and the resurgence of collective thinking building up behind CDC.

Michael Johnson is the best spokesperson pensions never had. If he would get off his high horse about lifetime ISAs and adapt to work with, rather than against the PDP, he could be a massive force for good. But right now his massive talent is being wasted promoting the unthinkable and pursuing ideas which came and went.

the best spokesperson pensions never had

About henry tapper

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