Thanks to my friends at Optimum Pensions for this marvellous puff, it includes a picture of me 20 years ago but the quote is bang up to date. “Australian pension” is an oxymoron when applied to Superfunds, A Superfund is not a pension but a means to build up wealth which Australia hopes will last its citizens for as long as the citizens.

Recently, the UK decided that it would measure Value for Money from our workplace pensions by considering the capacity of mastertrusts and personal pensions to offer people sufficient wealth to make it financially. As a result of this pension schemes are measured on the returns achieved by the default savings fund using methods which are beyond the ordinary person to follow. AgeWage proposed a VFM score that made sense and was based not on performance measurement but on measurement of what people actually got. This was dismissed as too complicated, though it made sense to savers. We will find out what comes out of all this work when the Government publishes its Pension Bill in a matter of a couple of months.

There is a lot of noise coming out of the master trusts , it has been picked up by Mary MacDougall of the FT who gets comments from Aon, Smart, TPT and SEI. They all put up well known spokespeople who say that the Government’s ambition to consolidate these pensions into a few mega-funds with £25bn or more in them gives these small ones no chance of making it past 2030. To be realistic, it leaves  People’s Pension, Legal and General , WTW, Standard Life and Nest as the Champions League contenders , these as middle table strugglers and the likes of Scottish Widows and one or two others, as relegation contenders. It would take Elon Musk to get one or two to make it based on historic performance (VFM) and current size,

All of which has no relevance to the 60% of the public who do not think pensions as a wealth fund within a SIPP or as a State Pension + Pension Credit. These people in the middle expect their pension to pay them an income till they die and want to know what they are likely to get. For them, the value for money depends on the pension they are likely to get and they are unlikely to recognise a performance measurement test as having much to do with that.

The arguments of Nigel Aston, Jamie Fiveash , Steve Charlton may impress the pension people and perhaps the wealthy and wealth managers who read these articles in the FT. But I very much doubt that they will impress Rachel Reeves – the Chancellor, Emma Reynolds – the Pensions Minister – nor their aides. Ministers should be judging VFM not by pots of wealth but by the pension they provide.

Pensions of course stay invested and pension funds should be passed to future generations. Pensions should stay invested in long-term investments and look for growth.

This is not measured by the VFM proposals, all that is measured is the wealth pot with a sign marked “Finish Line Ahead”. It is the problem that they’re discovering in Australia. The Australian Government are listening to Optimum who want to change things. I hope that Rachel and Emma will listen to me and the people who come on this blog and ask for more from their pension pot than a sign saying “finish line ahead”!

People deserve a promise of an income for life and that’s what I will building in 2025 with the help of people you may know. I hope the Pensions Regulator will help and I would like to encourage DWP/HMT with the help of some of the serious people reading this blog.

If you are quick to read this, you can get a free read of Mary’s article which is very good. If you’ve missed the free read, you can subscribe like I do – it’s VFM! I hope she agrees with me that the argument about conserving the range and expanding the range is a non-event. The millions of people who come to the point of wanting a pension aren’t interested in these arguments, they want to know what their master trust or contract based plan has been doing to convert their savings into a pension.  Now there’s a challenge!