The General Committee’s meetings with 23 “experts” has something a little celebratory about it.
This one with Michelle Ostermann and Brightwell’s Morten Nilsson has got a TV “couples show” written all over it.
This is Michelle introducing herself but she shared stage with Morten
This is what I took from their 30 minutes (starting 15,45 and ending 16.15 – link to the video here)
The session kicks off with a question on whether surplus proposals are a good idea. “Do you think it matters where the surplus is spent?”
Morten picks it up , saying that his research into large pension schemes shows a variety of purposes which employers would want to put surplus to.
Michelle talks at a high level of the variable funding state of different pensions , stress testing the state of schemes. She feels confident in the stress-test in general to permit the surplus extraction proposed in the Pension Schemes Bill. She has been through a similar situation in Canada.
Michelle is Canadian, Morten is from Scandinavia, it is good to see them discussing their products (Brightwell and PPF) , though I’m not sure this is what a discussion of the Pension Schemes Bill was meant to be about. There is a long discussion on the PPF levy which looks like it’s on its way out (with a surplus in PPF of £9bn what is it’s use?). The £10bn collected in levies more or less equates to the £9bn in PPF surplus.
The long explanation of how the PPF works goes on for more than half of the session and the session turns into a justification for the PPF (though the PPF has not been put forward as a consolidator in the Pension Schemes Bill).
While the half hour is devoted to Michelle Ostermann’s career and especially her global experience of large schemes, we do not get a discussion of superfunds which are supposed to be doing the consolidation of small DB pension schemes as a result of the Pension Schemes Bill.
With a few minutes left, Morten can get to the microphone but to compare Britain to Denmark in terms of large schemes. Brightwell primarily represents British Telecom which is not a superfund and can only talk about surplus management. He wants TPR guidance on how surpluses are distributed but looking through the list of 23 experts, Morten and Michelle are the people best placed to discuss whether superfunds have any hope.
My take is that superfunds are simply not on the agenda – which for something which we expected to be in place by 2023 and now hope to have some legislation by 2030. Britain has a few companies promoting capital backed pensions and one promoting superfunds (Clara) but between them only Clara is doing any business and it not an awful lot.
Morten and Michelle’s pension couple show , finishes with a discussion on “culture change” from being in deficit to being in surplus. Surely it would be better to consider why trustees have found it so difficult with the concept of super funds and capital backing. If they did, we might see a lot more action from British DB plans who are being herded towards annuities.
We see no evidence that the PPF want to get involved in consolidating smaller DB schemes along the lines recommended by the LCP, infact we don’t get much at all! The insurers will be delighted by a thirty minutes in which their domination of consolidation was not challenged.
My criticism of the Pension Schemes Bill is now crystallising and this session reinforces this criticism. There is nothing in this “pension couple” special to leave me any the wiser, other than that large pension schemes would like more help in returning money to sponsors for various uses.
