I’m really pleased to have Arun Muralidhar back joining us for a Pension PlayPen coffee morning. He’ll be talking about “Selfies”, his unique proposition which is catching on in countries as diverse as the Netherlands and Brazil.
His proposition is very simple
- The Government issues promises to pay income at a guaranteed rate for a certain time
- The pubic buys them with their pension pots.
Five reasons why I think this system works
- The Government will have a “gilt problem” as large pension schemes sell gilts to buy bulk annuities
- Getting paid a pension by the Government makes sense to many people who do not trust private sector financial services
- The idea of “swapping pots for income” is accepted as how we do things.
- The infrastructure to pay the gilts is easy, for most people it will be like extra state pension.
- What can we learn from Brazil and Holland?
Here are five things that I don’t get
- How can we make these strips of income last as long as their purchasers?
- Will they be acceptable as an investment pathway to insurers and trustees?
- Should they be tax advantaged when purchased with pension pots – Ufpls?
- Should there be a cap of how many of these Selfies , one person can buy?
- Should trustees be able to offer Selfies as a default or refuse their use?