NOW today

News is leaked through the pension press that NOW pensions is getting another refresh in the summer. It will be;-

1. Abandoning its clunky administrator – formerly JLT – now Mercer
2. Taking up with Tata Consulting, sharing an administrator with Nest
3. Putting pensions in the palm of their member’s hands (a NOW app)
4. Introducing member choice after 12 years telling us members don’t need choice

What we are not hearing from NOW – its trustees or its funder Cardano, is any plan to turn round the disastrous fund performance that has seen member outcomes consistently at the bottom of league tables.

We aren’t seeing any announcement on how NOW will help savers turn pots to pensions and become what the Pension Regulator now calls a “full service provider”.

Will NOW, in moving to an administrator that administers Nest as a “relief at source” occupational pension scheme finally drop its net pay contribution interface – so that low earners get the tax incentives they were promised?

Will NOW finally cater to the diverse needs of its membership and start offering funds it has promised (has the Sharia fund arrived for the Uber drivers?).

NOW is forced to rely on its Chair of Trustees to promote these changes. Behind her are a group of faceless people we know nothing about. NOW’s brand – once synonymous with innovation , is simply  a me-too imitation of its competition.

The 2015 NOW

NOW will consolidate!

Laughably, NOW is advertising that it will offer in future a “free” consolidation service. Just why anyone would expect to pay NOW to take their pots from other schemes is beyond sense or sensibility.

It is consistently cited for its dog in the manger attitude to paying out transfers , hanging on to money way beyond reasonable timescales and making leaving it as awkward as staying. Presumably it expects others not to do unto it what it has done to them.

And with the arrogance that has characterised its attitude to the market, it now expects its members to ignore its appalling record on delivering value for money and regard this refresh as a new-start.

Here is what Wiki says about NOW’s career to date

 NOW: Pensions was set up by ATP of Denmark for employers requiring a scheme to fulfil their duties under the Act. ATP launched Now:Pensions in early 2012, Morten Nilsson was headed the group as CEO.^[1]

During the three years leading up to June 30, 2017 Now:Pensions achieved a 2.8 percent annualized return, which was significantly less than the returns achieved by almost all of its competitors during the same time.^[1]

In November 2017 the Pensions Regulator fined the trustees of Now:Pensions £50,000 for administration problems. Followed by a fine for £20,000 in February 2018.^[1][2]

In February 2019 The Cardano Group acquired Now:Pensions from ATP^[3] after Now:Pensions ran into multiple administration problems and years of poor performance.^[1]

I can see zero chance that NOW will be put on any consultancy short-list in the immediate future, it will not win new business for these changes.  I can see every chance that its participating employers – will continue to leak to other master trusts.

The question – now that NOW shares administrators with Nest , is not about consolidating but about being consolidated. Nest and NOW started out about the same time, as NOW passes £4bn funds under management, Nest is well beyond £30bn.

NOW may claim more than 2m members but you don’t have to be an actuary to work out that that means average pot size is £2,000. The only thing that is at scale, is the loss that such numbers deliver to the funder. A

NOW proves that no mastertrust is too big to fail

NOW has limped from one second rate iteration to another. In its early days it completely screwed up its  auto-enrolment process to the point where it was put in special measures by the Pensions Regulator.

Its change of ownership from Danish state pension provider ATP to Dutch fiduciary manager Cardano has brought no noticeable improvement in performance and very little new business.

CAPA tables show NOW showing minimal return for those with long investment horizons and these are the returns achieved after four years of Cardano ownership.

No apologies from NOW

It has not the humility to accept it has failed its customers and its chutzpah in announcing its intention is astounding. There is absolutely nothing in the statement from chair Joanne Segars that is supported by evidence over the past 11 years. Professional Pensions happily reiterate what is presumably a press release

Now Pensions board of trustees chair Joanne Segars said the proposition developments put Now Pensions on track to be a “driving force in the future of workplace pensions” by meeting the needs of the modern workforce and employers.

She said: “The plans show Now Pensions is putting members’ outcomes at the heart of every decision, investing in technology and innovation to give people more control over their pensions.

“Retirement for many people may be a long way off, but a fair pension should never feel out of reach. Now Pensions is a positive force within the industry which has already helped two million savers on their savings journey and campaigned for change to support millions more.”

If the Pensions Regulator has the power to enforce its “VFM or die” mantra , it would force NOW to wind up .

I can see no reason for NOW’s continuing existence .  I hope that when they talk about consolidation, they are talking about passing their assets , members and scheme management to Nest.

The original NOW pensions.