In this blog, I give a personal reaction to the Conference held at WTW’s London offices yesterday, organised by John Kay and the CISI. Although I found it a depressing event , it will inspire me to work harder and not to retire into the luxury of the pension I now receive.
A report on Risk and uncertainty in the pension world
For the best part of five hours, a group of economists and other theoreticians bombarded an audience of 125 long-suffering delegates with a view of pensions that left me exhausted , depressed and uninspired. I am sorry to say, I rarely felt I had a vision of a better pension system, instead I saw the rage of a group of people, led by John Kay and Mervyn King who’s views – however you may react to them – talk to yesterday and not tomorrow.
The format of the event didn’t help with too many speakers squeezed in and audience debate squeezed out. A-list celebs came and went with reports that the key-note speakers at the end had a “hard-stop”.
And it didn’t help that the audience had to sit uncomfortably through a very pointed attack on a financial economist not in the room. There is real jeopardy in taking cheap shots , especially if you haven’t got social media to back you up. The snarling bitchiness of academia was a lurking presence throughout.
So much for the negatives, there was much to take away and I will focus on that.
The Conference was sub-titled “Correcting the biggest avoidable UK public policy failure of recent decades”, which suggested that an alternative to the collapse in UK private pensions would be on show.
Occasionally it was; Derek Benstead and Jackie Grant celebrated the correction of USS which is now back as it was as a pension scheme, despite the carnage the pension disputes have wreaked.
I enjoyed Michael Tory’s explanation of why he lives in the UK and the hope he has of a pension system of the future. He conjured up the entrepreneurial spirit of James Dyason and Jim Radcliffe as products of British culture that pensions could have funded (but didn’t). Tory is Canadian as is Keith Ambachtsheer. their positive vision for the future was based on the pioneering work of Peter Drucker in the 1970s and offered an alternative to the bleak views on display elsewhere.
The irrational exuberance of the pension community ( on show at last week’s PLSA event) was as overstated as the pension austerity that spawned LDI, the DB funding code and deficit reduction programmes overstated fictional under-funding in the 2010s. This was explained by Con Keating and Iain Clacher. Surely , if there is a lesson to be learned , it is that pension funding is more predictable and less to be feared than mark to market accounting would have us believe. A return to the “flow” model – dismissed by Geoffrey Whittington, looked preferable to the boom or bust valuations that have created such value destruction.
The positives for pensions sound like they are happening in Whitehall and Brighton. But they are happening because the level-headed practitioners and those who use data not theory , have shown that taking a view on funded pensions , works.
Moving forward with purpose
Erica Thompson, Harriet Agnew and Jackie Grant were rare women on the podium yesterday. For the main part we heard from pensioners who seemed to be enjoying handsome pensions. Put young and talented women into the frame and we have a different perspective.
It is true that , financially at least. the boomers are a lucky generation and with a pension gender gap, it is the male boomer who has most to thank the UK pension system as was.
But that does not mean that another generation cannot move pension forwards with purpose.
I suspect that the next generation of Dysons and Ratcliffes are busy at their work, creating enterprises that will support a future generation of workers and ultimately pensioners. They cannot be denied access to what Frank Field this century called “Britain’s Economic Miracle” – our funded pension system.
Depressing as I found this event, it will spur me on. At 61 – it is not too late for me to give up on pensions.