This is interesting – it’s Australian and not for the first time it is on a subject that should be of interest
The subject is whether the fund is ready to help you retire, does the fund provide all the facilities needed to swap from getting a “paycheck” from the boss to one from the “Super”.
This idea of a master trust or GPP or the pension scheme set up by your company paying you when you need a regular income is something that a large number of British people are familiar with, albeit probably only for a part of the money they know they are due when they choose to take their money back.
Many people do not think about pensions as something they have much choice about. They may have realised they had a choice to get out of being in the pension scheme, they may have been asked if they wanted to pay more than the minimum but that is the only engagement have with their pension.
It may become different in a year’s time when the Government start advertising the Pension Dashboard available in the October after this. You can download the app and get a view of the state pension due you , together with income from schemes you may have forgotten you were in as well as what we’re saving into.
So once we have an idea of what we have , there should be a next stage. That’s the stage that we may want to know what they do and how they do it and this is precisely what this lady Bec Wilson has been sorting out for Australians. So there is a lot for us to learn and I hope that she can share some things with us. I spoke to my friend Darren from Hymans last week and he tells me they have been hard analysing readiness so they can sort out the ready from the schemes that can’t help people get their money back (other than forward a cheque of a digital payment).
Retirement is something that hasn’t been thought about much by commercial organisations. Understandably they have been more interested in getting money in than paying money out and as the nice lady at L&G (Sarah Aitken) said to me, they haven’t worked out how to do it commercially (yet).
I think there is a simple answer – “well”! But we need to know what “well” is.
Which is why working with people like Bec Wilson will help. She’s a lifestyle queen and lifestyle in Australia will be different from ours in Britain, but I want to find out about what she tests with a provider. There’s a website, as you’d expect.
We think there are three aspects of VFM that will matter to those using the dashboard before they make decisions on which one(s) of the pension providers do it (it could be all of them).
- You want to know about the income you’ll get from a provider and whether (and how) it will grow
- You need to understand how sure the income will be (including the increases)
- You need to know what features you get (like getting your capital back if you want it)
A simple VFM assessment’s needed. Bec sounds more developed in measuring things. We know how to assess what has happened but telling what will happen will be a lot harder.
