If there is a Labour Pensions Agenda for the next Government , I haven’t seen it yet .
But I have seen the TUC’s agenda for the Trade Union Pension Conference today and it doesn’t look like this.
It looks like this
Agenda
09:50 – Opening remarks
- Kate Bell, assistant general secretary, TUC
10:00 – Keynote
- Liz Kendall, shadow work and pensions secretary
10:30 – Panel discussion: Auto-enrolment – the next steps
- Sarah Wooley, general secretary Bakers, Food, and Allied Workers Union
- Anna Brain, research associate, Pension Policy Institute
- Patrick Thomson, head of research, analysis and policy, Phoenix Insights
- Nicola Smith, head of rights, social and economics, TUC (Chair)
11:25 – Coffee break
11:45 – Panel discussion: The role of the state pension in a strategy for ageing
- Caren Evans, national officer, Unite
- Sasjkia Otto, senior researcher, Fabian Society
- Chris Brooks, head of policy, Age UK
- Jan Shortt, National Pensioners Convention (Chair)
12:45 – Lunch
13:45 – Workshops
- Communications masterclass
- Alex Ryan, head of pensions, Unite Pension Scheme
- Pass-through voting in pooled funds
- Paul Hunter, head of policy, Pirc
- Cllr Heather Johnson, vice-chair of pensions, Camden
- The case for re-opening DB schemes
- Hilary Salt, partner, First Actuarial
- Jos Vermuelen, head of solution design, Insight Asset Management
- Rehana Azam, North West regional head, NAHT
14:35 – Workshops
- How to avoid the Pensions Ombudsman
- Tony Attubato, head of early resolution, the Pensions Ombudsman
- Tina Norris Technical Pensions Specialist, the Pensions Ombudsman
- The S in ESG investing
- Hilkka Komulainen, head of responsible investment, Aegon
- Dooley Harte, pensions official, UCU
- Applying TPR’s Single General Code
- Nick Gannon, policy lead, the Pensions Regulator
15:25 – coffee
15:45 – Keynote: Transforming the UK’s infrastructure
- Sir John Armitt, chair, National Infrastructure Commission
16:15 – Panel discussion – The role of pension schemes in funding infrastructure
- Andrew Dobbie, national officer for capital stewardship, Unison
- Nigel Peaple, director of policy and research, Pensions and Lifetime Savings Association
- Heather Mulahasani, head of strategic opportunities, AustralianSuper
- Janet Williamson, senior policy officer, TUC (chair)
17:00 – Conference ends
From which you can see that there is plenty of opportunity to see the world through a Labour lens and speculate what our pensions might look like under a new administration.
Why am I going?
Having had the pleasure of listening to Gill Furniss, the Shadow Pensions Minister yesterday, I want to hear from the Shadow SOS for Work and Pensions , Liz Kendall. I’m keen on understanding how my day to day work on pensions can be adapted to a new paradigm (did I really say “paradigm”?).
I’m also keen to meet up with the union officials who know about pensions, there are a few of them who contribute to this blog and some of them I only “know” digitally. Unions are more important to members than is often thought.
Yesterday afternoon, as I got stuck on the railway going home, I had half an hour plotting with William McGrath on how we can organise members to claim their right to the surpluses that we are all consulting on. If a pair of old farts like William and I can dream, then so can younger DB members and so can those who are in DC schemes sponsored by employers with DB surpluses to their name.
Tribute to Hilary Salt
Finally, I’m going out of respect to Hilary, who is bowing out at First Actuarial this year. She was the reason I joined First Actuarial and though I’m not there now, I still think them the firm with the greatest integrity of all the pension consultancies. That integrity starts with Hilary.
Hilary Salt
They’re going to raid them. Like last time.
BREAKING NEWS
UK govt figures confirm DB pension for millions of workers is affordable after all:
– In figures it issued on March 2024, TPR says DB Schemes are significantly over-funded with excess surpluses of £225bn on a cautious basis requiring no reliance on employers (what TPR defines as “self sufficiency basis” of gilts +0.5%) Others refer to it as recklessly prudent )
– This excess funding rises to c£450bn when measured using the prudent person regulation required of insurers.
– Across the Local Govt schemes they’d estimate they’re in surplus in the region of £150bn- £250bn. LGPS funds sensibly avoided the Oct 2022 LDI debacle and losses and consequently are now excessively over funded by their own estimates.
Despite 20 years of Regulatory pressures to disinvest, the collective DB funding model has proven to be remarkably resilient and clearly suggests collective pensions for millions of workers are actually very affordable.
How did we get here?
The 2004 Pension Act was a political reaction to an obsession about the political risk or contamination from pension scheme failure – in turn this spawned a regulatory reaction to kill the babies at birth for fear of what embarrassment some might cause ( in terms of political fallout). I tend to think of the 2004 Act as a small strand of Japanese knotweed planted for political ground cover – seemingly innocuous, but capable ultimately of causing great havoc when, as we’ve done for 20 years, left unattended.
Actuaries are wonderfully bright and goal orientated and the Actuarial profession picked up the political brief with glee, finding every risk and caution possible to justify the mass closure of schemes.
However, what the numbers show is actually that collective DB schemes, as well as fulfilling a moral imperative (that we happily fund for MPs and govt workers), are actually affordable after all.
Now …. what is needed is a complete volte-face in the political vision – rather than seeking cover from the potential political fallout from a scheme failure (now dealt with by the PPF) the politicians should reframe the brief to the clever actuaries – being to provide a modest cost of living agewage in retirement for a life in employment. If we give them the right brief, then (as they did in the half century prior to the Gordon Brown inspired 2004 Act) they’ll find the way.
Oh, and don’t seek advice from the investment managers and insurers – the industry is overloaded with those obsessed with flows and AUM and is very happy with a model that rewards for scale and leaves all of the risk with the man / woman in the street to pick up in their dottage. Rather, set the vision, which will form into objectives, and then align investor reward with the outcomes – ie who can deliver the best pension.
The prize is enormous – a self funding pension system that invests in and turbo charges a chain reaction in economic growth, providing wealth and jobs, and a decent private sector funded pension for the normal working person in retirement.
Oh – and as now evidenced by the numbers, it’s wholly affordable and within our reach.
Any political party that can grasp the nettle, and reset the direction away from 20 years of political self interest, and instead offers a reset for a fairer collective endeavour will, I think, have a much easier job knocking on doors in the search for votes over the summer.
And once elected, they’ll have also the wonderful responsibility of deciding what to do with the now embedded half a trillion £ surpluses as we face the fourth Industrial Revolution.
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