I watched a webinar of reminiscence from the PLSA executive , hosted by this year’s Chair Emma Douglas (I felt obliged after promising to cover the event). The gist was that this was a return to BAU for the PLSA and that the event was a heaving cauldron of top people exchanging best ideas, catching up on gossip and learning from expert speakers. These things are relative.
Relative to having an online Zoom for 8 hours a day, it was certainly more engaging, if rather more expensive. But relative to the weekly hourly Zooms that delegates can attend for free, it was rather tame. Here were few dissenting voices , the PLSA had an agenda and we stuck to it, questions came via slido which allowed editing – the audiences were small enough for hands that were up to be identified and if necessary – ignored.
And what was missing was the challenge of the consultants. LCP was represented by Dan Mikulskis and Laura Myers, Barnett Waddingham had Sonia Kataora on a panel but Aon, WTW and Mercer were nowhere to be seen, only Isio had a stand and I saw no one from First Actuarial or the accountancy practices. Hymans Robertson, a Scottish firm – had no visibility whatsoever. This is a change from days of yore where the consultants were the pre-eminent force in the NAPF and then PLSA investment conferences.
So why have the consultants fallen out of love with the PLSA?
Yesterday, Barnett Waddingham launched a nes division dedicated to providing pension trustees with professional support services. Not investment consultancy, but the equivalent of fiduciary management in the non investment space.
A colleague commented
“is the “end game” a clutch of (big) asset owners with a small cadre of in-house senior savvy executives who delegate/oversee most service provision to third parties?
Maybe the truth is that in the end game, investment decisions on the big assts (the DB assets) have already been taken – the glidepaths to self-sufficiency and/or buy-out are in place and trustees are increasingly being replaced by the professional management companies – with only titular importance.
Here the consultant’s client is not the trustee but the sponsor and the PLSA -representing the trustee, is by-passed. This is an uncomfortable truth for an organisation that lays claim to considerable influence as the voice of the pensions industry. I saw precious few of the “senior savvy executives” of the sponsors at this event.
The loss of the support of the consultants is even more threatening if the future of pensions is deemed to be DC for much of DC is under the control of WTW, Aon and Mercer, whose master trusts are busy swallowing up the smaller occupational DC schemes. If it is not the consultancies in charge, it is the insurance companies.
And the insurance companies were not using the PLSA either
What we saw of the insurance companies at the PLSA investment conference in Edinburgh was not representing workplace DC pensions but competing with asset managers – we saw LGIM, Aegon and Aviva Investors, but we did not see the buy-out teams nor the workplace teams. None of the master trusts were in evidence , other than Mark Fawcett of Nest who spoke as if he were a DB CIO.
I am sure the PLSA would argue that this was an investment not a benefit conference, but DC investments were the major topic for at least half of the sessions.
So who are the master trusts selling their wares from and buying their asset management through? Clearly not a marketplace that’s organised by the PLSA. The reality is that the market for DC services is controlled by the consultants who appear to be sidesteppin gthe PLSA and conducting the conversation elsewhere.
The PLSA’s struggle to reassert control of the agenda
For all the celebration of the return to normality on the wsh-up call yesterday, I didn’t get the sense that the PLSA are particularly easy about its direction of travel. Since the previous conference in 2020, there has been a shift to new, more efficient market places where ideas are shared on Zoom or Teams and events are weekly.
Guy Opperman has chosen to speak at a Pension PlayPen coffee morning but wasn’t at the PLSA conference, the avuncular Adam Boulton does not substitute for a Mark Carney or an Andrew Bailey. The senior Treasury Ministers who could have spoken of building back better weren’t there and nor were the ESG activists who could have created lively debate.
In reasserting control of its conference, the PLSA’s agenda has shrunk to a few themes
- the importance of private markets to DB and DC growth strategies
- the influence of ESG thinking in investment strategy
- the integration of ESG into private market asset management models
- the shift to measuring value rather than purely cost.
But these themes themselves are well rehearsed elsewhere (not least on this blog). The dissenting voices of Con Keating and Jon Spain’s awkward questioning of the value of LDI, the challenge facing master trusts in converting to CDC or adopting CDC style funds and the way we communicate value to members – all were themes that passed the conference by.
The PLSA’s agenda and those of the policymakers are not aligned.
And the need for dissenting voices.
I had the privilege of being in the press room for the two days of the conference. Few there were old enough to remember the days when PLSA conferences were covered by the national press and broadcast news.
My conversations with journalists were about the lack of newsworthy items to report. It is difficult to report that the news story is the lack of news.
The conference lacked dissent, contrarian voices – it needed a Stuart Kirk.
The PLSA is still a major force in policy and still gets funded by large pension schemes. But I sense its influence will diminish unless it comes up with more good ideas – such as retirement living standards. It has opportunities. The PLSA could take the lead in encouraging schemes to promote pension credits and over 80s pensions to its poorer pensioners, especially those on reduced spouse/partner pensions.
It could and should be at the center of the debate about how we measure net performance and deliver a standardised value for money metric base not just on performance but member service. There is much it can do to make the pension dashboard a go to place and that includes influencing the projections of future pensions to members (an investment issue).
But it will need dissenting voices to change and I fear I saw precious little introspection and awareness of the need to change , on the call yesterday.