Small is beautiful – give pensioners a say!

In this blog I ask whether big pension funds can act small and connect with their pensioners in a meaningful way. I conclude that it will be easier for the consolidators to do this, than the small pension fund.

Zpen – how Zurich’s pensioners have clubbed together

I’m a pensioner of a corporate defined benefit pension plan.sponsored by Zurich , the insurer. Twic a year I receive a little magazine from the Zurich Pensioners Association called “Contact plus”  which gives me local news and articles relevent to my new found seniority. I can walk, play croquet and dine with fellow pensioners- and share stories and reminiscance.

It also contains personal congratulations to pensioners reaching 80 and 100 and a list of pensioners who have died over the past six months , touchingly entitled “a fond farewell”.

Although I am probably working as hard as I ever did when at Allied Dunbar, Eagle Star and Zurich, this magazine makes me think of the future. I pay a small subscription to be a member of the Zurich Pensioners Association and it is money well spent.

The link to the financial aspects of being a pensioner is maintained through a column from Tina Gilchrist, a specialist adviser to pensioners and a section telling us of paydays for the next six months, but that is about it, as far as “pensions” are concerned.


Thinking small

Reading “Contact Plus” reminds me that Zurich was actually a number of offices around the country with entirely different cultures and that each had its own identity. This persists into later life, where local groups seem to coalesce around life assurance (Swindon), pensions (Cheltenham) and general insurance (Portsmouth and Cheltenham). Local offices were satellites to these three hubs of the big life companies within the group. Reading Contact, I see how the pensioners group maintains these small groups and organises itself around “thinking small”

I imagine being within a small DB plan , this sense of continuity and local identity is focussed on one or two locations. Then there are schemes with massive concentrations of pensioners such as Rolls Royce at Derby or Unilever on the Wirral. These pensioner associations have local significance too and can provide inter-generational benefits. The children and grand children of today’s pensioners may well be working in the same business, perhaps having been apprenticed. This romantic view was what inspired the Levers to develop Port Sunlight, the Cadburys to build Bourneville.

It was when large companies thought small, that the idea of the “trustee” was most important. Most DB pension schemes still have a pensioner trustee, who’s job is to look after the interests of the scheme as a whole but of pensioners in particular. Pensioner trustees were very important to pensioners in years gone by, sadly – like most member nominated trustees, their role has been diminished. Pension schemes have enough to think of , without thinking small – or so it seems.


Acting global

Pensioners have a lot more energy than younger members of pension schemes might think. They are often extemely active in their stewardship of the organisations they involve themselves in  and that includes the affairs of companies into which they invest. AGMs of large corporates are always packed with elderly shareholders keen to let their thoughts be heard.

This energy is not being tapped by the Zurich Pensioners Association. Perhaps this is unsurprising, the sponsoring company has all but disappeared in the UK as an active force in life and pensions – its general insurance arm has also been scaled down. Were Zurich to transfer the pension scheme to a consoloidator, few pensioners would complain.

And here is the opportunity for consolidators. There are many, like me, who want to make our money matter but who are restricted from engaging with the stewardship of our pension scheme by the limited resources and ambition of the trustees.

Ther is an opportunity for consolidators to actively engage , energetic pensioners who have time and enthusiasm for the issues that matter to trustees.


Can consolidation improve the experience of the pensioner.

The major concerns of those at work are the major concerns of those in retirement. The stewardship of companies we invest in , of our society and of our planet are no less pressing to pensioners than those who are at work . The billions of assets sitting behind my pension scheme are no less real to me as a pensioner, indeed they are much more real as I spend some of them every month,

For many schemes, like mine, the link to the pension scheme itself is almost broken, The sponsor has retreated and has no great interest in former staff, the pension scheme is weighted down with responsibility for funding, reporting and preparing itself for future requirements – such as putting benefits on pension dashboards.

But were Zurich to transfer the responsibility of paying my pension  to a Superfund or a master trust or  an insurer, would things change? I suggest that I would have little to lose and much to gain.


How might this work?

Pension Insurance Corporation have for some time brought  its pensioners together to talk with them about how it was managing the money behind their payments.

I’m sorry to see that they have not run any events through the pandemic 

But PIC continues to talk to policyholders (its name for its members) through podcasts that can be accessed from this link

I have spoken in the past to its thought leaders at PIC such as Louise Inward and Tracy Blackwell . I would be delighted to hear from consolidators on what they consider their role in engaging  and sharing the role of  stewardship with members.

The interests of members is not just a matter for trustees, it is of commercial importance to consolidators, whose long-term brand and reputation will be judged by the member experience. In a price dominated market , as is the case today, the value of quality of service to pensioners may have little weight. But as time goes by, the interests of members is likely to become of increasing importance.


The view of the consolidator as an organisation that has the scale and interest in giving members a say, is one that is rarely discussed. But it is one that I will be discussing with trustees and consolidators this afternoon.  We’ll also be hearing from Edi Truell, founder of Superfund and of PIC.

If you’d like to join the conversation, click this link.

About henry tapper

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