L&G MT

I am very pleased to see L&G growing its Master Trust. It is the first of the commercial AE DC schemes to have passed £30bn and it has done so because L&G is trusted to deliver in many respects by decision makers- primarily medium and large employers keen to do the right thing for their staff.

I have worked with L&G since the early days of auto-enrolment. Pension PlayPen offered a special deal for L&G  workplace pensions , agreed by Tony Filbin.  My company , First Actuarial , switched to an L&G arrangement shortly afterwards, I have consolidated my pension pots into an L&G plan and done well out of it.

My money is managed for growth and has an eye on the commercial and social value of global equities that focus on doing well for the planet

I have done what L&G asked (see initial advert) and I am determined to stick with this strategy because I am a young 63 who sees thirty years ahead for me! I speak with actuaries and doctors, I do not want to be disinvested and left in an annuity. I do not want to have to look at the value of my savings as I do today but I want L&G to manage it with a long term view, I have generations coming behind me who would benefit from growth on my and their money.

Delivering to individuals/delivering to sponsoring employers

I have noted how well L&G has delivered to Tesco whose staff now get a contribution into the L&G Master Trusts. Tesco and L&G came to an arrangement that allowed low income staff to have savings advantages credited to their scheme even if they could not get tax relief.

In short, I am an L&G fan and see its strength in its Master Trust, with a strong fiduciary Trust led by Robert Waugh. But I do not want to congratulate L&G for running a pension scheme but a savings scheme.

My savings scheme is worth many hundreds of thousands of pounds but I cannot get paid a pension from it. I can get a “pension annuity” but that is not what I want. I don’t want an annuity that locks me down into short term de-risked financial instruments, I want my money invested.

I want my money to be transferrable to a pension scheme which benefits from a better income, equivalent security and the possibility of long-term bonuses if the pension does well.

I would like L&G to get commercial about pensions and consider operating a DB plan into which savers could transfer as an option, even a default option, when they wanted to start drawing down.

We do not have to be shy about this, it is possible for people to transfer from DC to DB within a Master Trust if a sponsor can be found to stand behind the DB scheme. There is money about to deliver sponsorship to a DB pension for DC savings plans like L&G’s Master Trust and now is the time to explore how this money can provide the sponsorship to make L&G’s DC plan a DB plan as well.

My experience with my money suggests that L&G has not cracked it yet. They cannot offer pensions as I would like for myself and employers I speak to, want for their staff. L&G must also recognise that many pensioners spend longer in retirement than they do saving. It is not commercial for L&G not to offer pensions. Annuities are not pensions, they are poor value and have been unloved for years.

We need to sort things out and L&G, with their success as a DC savings organiser are in a position to do so. Happily the people at L&G’s scheme look like they are up for a challenge so I will leave it there!

Congratulations on stage one L&G, now for stage two!