Those who read this blog may be supplemented this weekend by people who enjoy fire and brimstone for here is Jnamdoc opening his heart on the need for a pension system that provides pensions to everyone.
This is a comment from Jnamdoc, who reads a lot of my blogs and write better rants than I do . Here is a great rant- in the weeks that follow I will be exploring the thoughts he wrote in response to my blog “Most Employers have not provided pensions to their staff before“.
What follows is the comment with only the bold emphasis included by me.
Agreed with the sentiment.
The sentiment of the blog was that getting people paid pensions was shared ambition and would need CDC as well as DB was a worthy target. But..
On the delivery, its bleedingly obvious that the [86] LGPS’s should be used to kickstart nationwide CDC arrangements. And now. Not another SERPS – that just taxation, and none of it will go into growth.
Really, agreed we want funded pensions not a revival of unfunded SERPS or a funded version that just eases Treasury problems. But LGPS for small scheme’s admin?
The LGPSs are ideally positioned geographically, they are skilled in collecting contributions, investing, and paying pensions. If we didn’t have it, we’d wish we did. Oh, and they are over-funded.
This is well said and LGPS pays people well, when things go wrong (West Midlands) it is usually because of a private sector software issue. LGPS don’t often muck up and they are on hand for member support.
But much as I like LPPA and other specialist administrators, they and the embedded LGPS in house teams are not ready to run CDC for small companies. They do not have it in their DNA.
LGPS sponsored CDC on a geographical basis is also really the only way to bring the millions of self-employed (and gig-economy, multiple job careers folks) into meaningful pension arrangements. And very importantly, LGPS governance can provides some barrier against the State (please) – we are really ‘good’ at big State (but the outcomes are really awful, that is why we are in this mess).
This I totally agree with. We are seeing what happens when State takes back technology, look at the terrible delivery problems with the Pension Dashboard. Please do not think that Nest are exempt from problems but they have tied up with Tata – a world class technology company – and that’s saying something. We need to think of technology as part of the answer to the problem last properly considered in the mid 1970s (leading to SERPS)
But we get stuck in the gloop of Policy embarrassment and short term egos that stops Policy changing track to do the right thing. Having been sold the mantra that bigger is the solution, Gov’t and the Minister (who is big-Stated biased) feel they can’t backtrack from their consolidation quests (which btw will have no meaningful impact on growth, and not for many years if at all).
Let us look at banking and particularly at payment systems. These have been revolutionised over the past ten years because the FCA has got it and Open Banking has changed the way we live our daily lives. We need open pensions.
It really is quite dis-heartening these last 20 years witnessing and living through one policy mistake after another, each digging us all deeper and deeper into a bigger and bigger hole! This industry is truly only for the resilient !!!
That may be the case but I’m not wiping a tear for you Jnamdoc, there are few more resilient than you!
The compliance and regulatory wars and the scarrings from TPR de-risking cult and the zealous application by storm-trooper case officers had a lasting impact on mindsets, and did deliver a ‘near’ fatal blow to our nation’s attitude and ability to engage in commerce (possibly be design).
Again, there are enough like you and Pension Oldie and Derek Scott who refuse to be beaten down by the Pension Regulator but continue to argue for better from the same.
Now we have to watch what could be the killer blow as £50bn pa of our economic firepower, built up and vested in the stewardship of business supported pension schemes, is shovelled over to low risk low investment mandated insurers. Sir John Kay will need to be writing another paper soon on the worst Policy Disaster over the last 100 years, only 2 years after his last paper.
This is indeed a catastrophy for pensions and one that does as much damage to the economy as LDI and its explosion in 2022 did. There are many who are yet to acknowledge an alternative to “de-risking” and see growth as “uncommercial”, but do not confuse these people with those who want new collectives to deliver better pensions to ordinary people. They are what has to arise from the ashes of a DB pension world “de-risked”
And now witnessing the attempted land-grab in the guise of LGPS’s consolidation for efficiency / scale. Bah. Everyone knows that once sufficiently under control, the LGPS’s too will be coerced into holding Gilts on the false altar of making pensions “safer”.
No Jnamdoc, that is not the course LGPS needs go. Canada shows us how funded Government pensions can deliver economic growth while paying market driven pensions that Canada is proud of.
All the while, no tangible progress for working people to get a pension.
No Jnamdoc, we have tangible process on CDC, tangible process will be extended if the Pension Bill/Act includes a requirement to default savers who don’t make a choice into a pension or annuity decided by the trustee or saver fiduciary.
Jnamdoc, we have not lost – we are winning; we cannot be knocked backwards, we need to move forwards and pay pensions as easily as we are paid under open banking.
There are organisations that have grabbed open banking and made pension saving businesses that people enjoy. Pension Bee is the most famous, Collegia is another who I work closely with – there are others.
I want these firms to show us how to administrate and support and pay people’s pensions whether CDC or Shared Ambition or just DC saving, in a way that we can adapt to pay people who have no pension – working people – a pension!
