I woke at 4am to the news of Jimmy Carter’s death and remembered listening to his 1977 visit to Newcastle and his declaration that he was a Geordie. You can watch the TV here.
There is no one that so excited me as a teenager, faced with Britain turning to Thatcher. I was discovering punk and the thought of living to 20 seemed a little extravagant. To live to 100 was incomprehensible to someone 16. I didn’t know about the north east – until Carter went there.
Carter is a symbol of many things and he has been a great spirit since his ill-fated presidency. I hope we hear all about the good that has come from the 45 years since he handed things over to Reagan.
One of the things that he reminds us of is that living to 100 is an achievement that is not beyond us. My mother is 92 and I went out for a walk with her yesterday, she is helping me back to health and showing no intention of slowing down up top. One of my friends has a 100 year old Dad who was a taxi driver, they and the family are Tottenham Hotspur fans.
A happy series of coincidences
Yesterday, I was sent a link to an exhortation to America to re-embrace pensions. My mother would agree but she doesn’t get up till 6 pm, She shares in my father’s NHS pension which has been in payment since 1987- she has been paid since 2018. These are the realities of pension, they are a reassurance that you can live as long as you like and in the case of the three examples above, to the delight of nations, fans and families!
So I would like to, in honour of those who live longer ,ask you to consider the points of adventurousimpossibly5af21b6a13 – a rather tough name but a great commentator. Here he is
The move to dc is a profound mistake as can be seen from this NIRS study in the US – DB pensions are far more efficient than DC. It is worth also reading the two prior studies in that series
https://www.nirsonline.org/reports/betterbang3/
The thing about this document is that it emanates from America and that it treats providing pensions for staff as of benefit to employers. Rather than focussing on risk management of unwanted product, it treats the supply of a pension, as a service which should be judged by its efficiency in providing a deferred income.It is an attempt to get decision makers to take decisions based on positive pensions for staff and not as a means to minimise risk to businesses.
This is a very different way of assessing value and assumes that there is a commercial value in doing the job of providing later life pensions.
We need to review the pensions system and consider its outcomes.
The way we have cornered ourselves into requiring us DC savers to choose between annuity, drawdown or cash-out is unfair. Those who argue that people favour these choices in their fifties and sixties do not understand the needs of those whose lifespans approach and reach 100.
Those of younger generations who would like their parents pots to pass to them tax-free, no longer have this expectation. They should now revise their thinking and consider that pensions are a reassurance that we can financially enjoy later life through a pension.
Such pensions as my mother has are a cost to today’s income tax and national insurance payers who must support the defined benefit she is enjoying, paid from a notional fund set by the Government Actuaries Department and part of the Treasury. Those who argue that we are being too generous should consider consider the good such pensions as my mother receive, do.
Over the coming days we will lavish Jimmy Carter with praise and praise him for keeping going till he was 100. I say the same about my mother and my friend who is 100 having been a taxi drive.
Let us hope that we recognise amongst those we know who have survived the second world war, that they are enjoying a longevity they deserve. Carter has been a wonderful bang since he handed over the presidency and he inspires amongst many other things, the proper veneration for those who live and give so much.
The generations that are elder than mine are who we should be focussing, creating a pension schedule from which we can benefit when we live through to a good late age. Instead of regarding longevity as risk, we should consider it a prize we should all want and should all potentially receive through a proper pension system.
Wholeheartedly agree with you again, Henry.
We do need a complete reappraisal of the occupational pension system.
This should start with the legislation – every piece of legislation since 1993 has been concerned with the failure of collective occupational pension schemes. We do now urgently need legislation which encourages the universal provision of retirement income in the the most efficient manner with the lowest cost to the Member and the employer.
We need a reappraisal of the whole system – e.g. are the valuation requirements on DB and CDC schemes addressing the key objective of providing the best pension outcome at lowest cost? Are trustees being constrained in investment policies appropriate to their membership by legislation and regulation or so-called professionalism?
One easy win would be to start by considering administration costs
Including PPF levies these can easily amount to 3% of pensionable pay or £ooos per member per annum. These are boosted by exercises to correct previous legislation failures, such as delayed GMP equalisation often with minimal impact on Members’ benefits; or alternatively to prepare the Scheme for its failure to continue to pay the pensions as they fall due using high cost insurance buy-outs policies; as well as meeting “nice to have” politically expedient matters such as Implementation Statements which very few members have any interest in or even read and do not have any meaningful influence on investment policies.
The worst culprit to me appears to be the Pension Regulator who appears to be entirely focused on bureaucratic processes to the extent that in the General Code they relegate the primary duty of a trustee to act in the Members’ interests as point 6d on page 10. At point 6f the Code says Trustees must be open and honest in their dealings with the Pensions Regulator but nowhere does it specifically say Trustees should be open and honest in their dealings with Members.
Is it too much to hope that in 2025 we might start to see a first principle approach to pension income provision?