“The beneficiaries of your pension plan are not the government”.


Maxime Aucoin

This phrase is from Maxime Aucoin of Caisse de dépôt et placement du Québec (CDPQ). She buys assets on behalf of public pension plans as well as insurance plans and it operates independently from the government, managing over $225bn . In the words of Jo Cumbo and Chris Flood…

It has a dual mandate to maximise returns for more than 6m members while also contributing to Quebec’s economy, providing an example of how pensions must balance sometimes competing priorities.

We are familiar with the same issues in the UK. the most obvious examples are the LGPS pools which have similar functions and are increasingly seen as “fiduciary managers” . The pools are currently trying to remove themselves from being formally considered as Fiduciary Managers by the FCA.  This would mean  them having to comply with new rules from the Department of Levelling Up, Housing and Communities which have yet to be written.

Again the complications are between the needs of Government and those of consumers (not just members but council tax payers who ultimately provide the funding for LGPS).

While these conflicts have always been present in taxpayer funded Local Government Pension Schemes, the issue is now live in our DC workplace pensions.

Should we as savers and investors be apart of a project to refinance Britain debt stricken after years of pandemic? The answer lies in whether you see that building back as an investment opportunity or not.

What I do not want to see pension funds continue to do is to pile money into Government debt which is used to artificially keep down interest rates and create the catastrophic results we see at schemes which derisk.

This comment is in response to Maxime Aucoin’s statement from an anonymous FT reader

Someone should look at USS here which seems to be politically used  so University Managers can  get their hands on pension cash- firing whistleblower Jane Hutton and cynically using a valuation at the lowest point of the Covid market to make the biggest pension fund in the Uk look like a basket case

While I don’t agree with this conspiracy theory, I can see how many beneficiaries of that scheme see the failure of the Government’s Pension Regulator to encourage a more positive approach to investment by USS, as a cause of current strife. The CEO of USS is a former CEO of TPR and USS can point to the regulator’s DB funding code for validation of its ultra cautious approach.

Readers may by now be confused by Government calls to de risk DB plans while calling on DC plans to load up risk to build Britain back through the use of aggressive funds investing in entrepreneurial startups.

Readers would be right to be confused.

So long as we have the polarisation between open DC schemes and closed (or closing) DB schemes, the public will be confused. We need a consistent approach to pensions not a war between competing Government agenda.

In practice, the conflict between the needs of beneficiaries and those of Government could be mitigated if we stopped stopping pensions! That means keeping DB schemes that are open..open, managing closed DB schemes into superfunds and insurers which have the strength to invest in real assets and creating a world of open DC pensions through collective DC. The opportunities for conflict resolution are in the yellow box below, the threat to productive capital is in the box with the red outline and the time horizons that pension schemes should be considering are those of the horizontal access (120 years).

Time is the great healer of conflicts between Government and beneficiaries. It is in Government’s grasp to increase the life cycle of our pension by pursuing consolidation and encouraging both the saving for and  payment of pensions to be invested in productive capital

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to “The beneficiaries of your pension plan are not the government”.

  1. Dr+Robin+Rowles says:

    Sadly, Henry, the sole purpose of pension reforms since 1979 had been to make the government their sole beneficiary! It started with taxing schemes that had the timerity to overfund by a government fixed %age, and has continued to this day…

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