In this podcast, Darren and Nico finally run out of guests, energy and time. A listener asks them to keep the pod to an hour- it runs to 63 minutes. I reckon there is no more than 10 minutes of this podcast which is on topic. The point of the “value for money framework” was to help people work out if they’re getting value for the money they put aside for their retirement, but we seem to have moved on.
There is a long discussion about the governance of the actuarial profession
There is a long discussion about the politicization of the climate change debate
There is a long discussion about the timetable for legislative change for the Mansion House reforms.
There is also a lot of “news” – all of which takes us to around minute 57 when we do get to talk about what has actually happened since February when the consultation was launched and July when the response was received.
This leads to some musing about whether the VFM consultation was worth it, the conclusion being that it wasn’t. I don’t agree – there is little we can do that is more important than improving the performance and service of our pensions – and reducing their costs.
So what is new?
What we learn is that nothing much is going to happen as a result of the 28-30 hours of VFM podcasts and the hundreds of pages of the VFM Framework. Darren expresses disappointment that there was no magic bullet coming out of the responses and that the Government are now warning there is insufficient legislative time to do anything about the framework anyway.
Nico and Darren hope that momentum is kept up, but it’s hard to see just where the momentum should take things. Since the main thrust of the Nico/Darren consultation was that it was delivered on a podcast, this seems a case of the industry talking the DWP out of doing anything but consult.
Faced with a range of consultations and calls for input on all manner of topics. you might conclude that getting involved with the public policy debate, serves no purpose at all. But taking this position, would suggest that the Podcast was equally pointless. For the record, I think there have been 17 of these podcasts which have been worthwhile and I don’t regret listening to every minute of all 28!
Plus ca change…
The conclusion Nico reaches is that other than to force consolidation on a reluctant set of DC trustees – everything else can just be left to the industry (as has been the case for the past 10 years).
This sounds like a bit of a let down to me. I am certainly not happy to leave VFM to the pensions industry and I’m not happy with much of the tough stuff that the VFM Framework has ducked – especially around performance and costs.
If you want to understand why leaving the industry to mark its own homework is not a good idea, read this letter in this week’s FT
If you still don’t get why VFM is important read yesterday’s blog about why in pensions , what matters is what you get, not what you’ve been promised.
Nico says that in retrospect that we should have focused on “value for saving money” rather than “value for money from pensions”. But the consultation made it clear that it was targeting the savings phase of the DC pension and that the DWP would move on to what happens next – next!
Nico then repeats the view that the consultation has been a stick to beat trustees around the head to consolidate. This was not the conversation that was had with Lou Davey, the previous week.
There are over a million employers in Britain who want to know if there workplace pension is offering VFM, there are over 25m UK savers into these workplace pensions. DWP , TPR and FCA are intent on creating a VFM Framework and – despite my frustration – I and others – want to make that happen.
It is only with minutes to go (6 minutes to be precise) that – we finally get round to discussing the VFM consultation response (at minute 57)
- Nico and Darren are pleased to see Gross fees being recorded. This stops the “net of fees, net of fees conversation and makes the VFM framework easier to do (and easier to game).
- Chain linking stays in place – tough for people doing historical performance reports and a means to discredit past performance (we aren’t accountable for previous manager’s mistakes).
- And they notice there have been some tweaks to the quality of service metric – but with such insouciance as to suggest that no one will bother with it.
Is that all there is?
I suspect that Nico and Darren have had their last word on VFM. Nico has a new job, Darren has a number of new jobs, including it seems being cheer leader for Origo.
But if this is the end of the line for these podcasts, then it’s not the end of the line for the VFM Framework. Not if I have anything to do it. VFM is too important to be left to the pensions industry, it needs genuine disruption from people who care.