Nico and Darren go guestless.


Take a guest out of Nico and Darren’s VFM podcast and you are left with the Chuckle Brothers of pensions without the constraint of a third party. This leads to some pretty strange stuff, especially from  Nico who now aligns himself with the patrician elite who run our workplace pensions.

Nico has come round to the opinion that VFM is actually destructive of value as it gets in the way of a better discussion of adequacy. He claims that “we are being pushed off the ball” of “outcomes” in favor of the Government’s consolidation/productive finance agenda.

Never mind the efficiency, feel the width“. This view is shared by the bulk of the pension industry to which Nico may be a “mean reverter”. This bulk would like to have our money , the taxperson’s money and our employer’s money and sit on it for as long as possible – preferably well into retirement. It is after all entitled to a return on our money and has no interest in plebeian scrutiny.

This view suggests that simple tests on performance, quality and apportionment of costs are neither here nor there as all commercial providers are worthy their place in the premier league without fear of relegation, If you support Arsenal, you can think like this, if you support Southampton, you may feel differently.

Club woke – the paternalists alternative to VFM

Early in the podcast, before Nico declares himself a member of the patrician elite, he hints that the podcast may be due a rebrand. Perhaps it should align itself to the PEG – ” a loose affiliation of millionaires and billionaires” dedicated to eliminating pension inequality by meeting up in each other’s City Offices. The paternalistic elite have to find some way to justify themselves and if it’s not VFM – why not “club woke” – dedicated to virtue signalling.

Perhaps I am being distracted by Darren’s claim that I am a fan of the VFM blog. I am neither a fan nor a detractor, I have lashed myself to the mast for an hour or two a week to comment on what is said and by and large it has been time well spent.

The big themes of the 18 hours I’ve listened to appear to be

  1. The VFM framework should include retail (non-workplace) pensions
  2. The VFM framework should include decumulation
  3. There should be more of an onus on employers to sort things out

To this we should add that VFM is best put in the hands of the paternalistic elite and not  simplified to a point where ordinary people think they have an idea of what is going on.

There are some big issues emerging out of this consultation. Perhaps the biggest is the Government’s objection to the “race to the bottom” on pricing – which is the unexpected and unintended consequence of handing the decision to consolidates to plebeian procurement teams. A discussion on how the pensions industry will ever get beyond “asset management for free” which is what is happening to most workplace defaults, would be worth happening.

I suspected that this was too contentious for the Chuckle Bros, but I reckoned wrong. The last ten minutes of the podcast contain an extraordinary statement from Nico endorsing  a fee crunch, rejecting arguments for productive capital and advocating passive investment for the proles.

This is a u-turn from the recent CIO of Connect and People’s Pension and one I don’t get.

I want Nico to  focus on the events of 2022 and just who should be held to account for the wholesale destruction in value. We need to call out serial offenders destroying value and name them -saying their are no mastertrusts who don’t provide VFM is wrong.

A discussion of the appalling service standards surrounding transfer times , the management of death claims , the lack of support at retirement and most of all the failure of this sector to give people proper performance metrics WOULD BE INTERESTING.

VFM reverts to mean (paternalistic elitists)

But all of this sounds not very urgent because as Nico and Darren admit, they haven’t established what the purpose of these “pensions” is and therefore have no anchor on that value for money should be. The Australians have sorted this, the common purpose of  retirement system is to give people an income in later life that gives them dignity.

The purpose of the VFM framework is to deal with one aspect of the retirement puzzle, the need to maximise efficiency of saving, if we are to have a funded DC system we need to get that right first. People need a way to judge value for themselves, the VFM framework is about making this happen for ordinary employers.

Ordinary “plebeian” employers will be consoled that so long as they move money into a magic circle of commercial master trusts , they have provided value for money for their staff. Staff can be dealt with by high quality communications , validated by industry awards. Past performance can continue to be a matter of disdain while what really matters, the simulation of future returns, can remain the province of the paternalist elite (aka actuaries)

If you subscribe to this way of thinking , you will probably ignore the VFM consultation. But if you don’t I suspect you will find the consultation response as exciting as promised by the CEO of the Pensions Regulator this week.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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10 Responses to Nico and Darren go guestless.

  1. Dave Dawson says:

    Can I just check that a Cambridge educated public school boy who bought his Blackfriars flat screwing commission out of gullible savers is entitled to call people members of the patrician elite? I’m curious.

  2. Charles Pooter says:

    Throwing insults from your highly privileged position, to try and remain relevant…that “Lady Lucy” has sailed, Henry.

    Stick to dropping your other half in the guano from a great height, eh?

    • henry tapper says:

      Thanks Charles- you are right on all counts. Pleased to say that 10 guests will be enjoying lady Lucy for free today- hope you continue to enjoy the blog- it’s not what you have but what you do with it- eh!

      • Charles Pooter says:

        Weren’t you quoted in The Times saying ” I run free boat trips on the Thames in the summer and have hundreds of guests each year. Anyone is welcome on the Lady Lucy, but I make it clear that I need donations and I get them. I list what a typical donation is, give my bank details and I accept cash.”?

        No such thing as a free boat trip, it seems.

      • henry tapper says:

        Happy to say that all boat trips are free! There is no obligation to make a donation/ as with churches, museums etc.

  3. Pingback: I have offended friends – that shouldn’t happen. | AgeWage: Making your money work as hard as you do

  4. Eugen N says:

    I think Henry is somewhat right to promote VFM, although we do not know exactly how to measure this.

    In fairness, we would only be able to measure something once the person retires and buy a pension annuity (the only solution in my opinion for people with aggregated pots of less than £200,000 (assuming 25% PCLS is withdrawn for other reasons (paying of the last bit of mortgage, or credit cards).

    I have seen pension schemes performance fairing very well in the growth environment up to 15 Feb 2020, but not as well after 01 January 2022, when the value factor came to the fore.

    I would argue that VFM is also engagement. Schemes which can engage with members into small lifetime cashflows, trying to predict how their retirement may look like, could determine some members to save more. So far, there is little value added here.

  5. henry tapper says:

    Thanks Eugen. There’s a lot more we could do if people felt they understood their pension and it’s VFM. I’m very keen on this Framework which will help people get to grips with their pensions- we start with employers and trustees and end with savers- I guess many people are both.

  6. henry tapper says:

    Most people make a donation- some dont. No obligation but I like people to come- feel free to come yourself- bring friends and family

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