This session goes on to 10.55 and can be accessed by a link
The link is here- Christopher’s spelling is wrong above.
There is a question from the shadow pension minister on the voice of ordinary people on how funds are invested. It is hard to see (without view of the speakers) who is giving the answer but Government is told they will have to rely on Trustees and not members as to how money is used to improve benefits (Jack Jones) and Age UK’s Christopher Brooks (correct spelling!) finds it hard to comment.
Christopher is a member of Nest’s member panel and he sees consumer protection in default decumulation funds as an issue of annuities to be chosen off a carousel at 75 or thereabouts.
There are questions about how people are prepared for retirement . Christopher discusses the role of fiduciaries and IGCs and then moves on to financial education to people in their seventies.
The suggestion is that individuals will have to take their own decisions during their retirement. This shows a difference in opinion, where charities, MaPS and the not very charitable Aviva who Age UK are working with.
Jack Jones is of a different opinion about member support. He stands behind default, nudge and the Pension Schemes Bill. The engagement the TUC requires is a lot more basic for the majority of people.
There is need for “statutory guidance” on matters like investing to minimise climate change. Jack Jones said he’d like to see more help to trustees. But there was little enthusiasm for using pensions to go green
Jones was keen for the use of a single corporate trustee in defined benefit schemes, especially when a DB scheme is being used commercially for surplus extraction.
It was good to hear this firm position on fiduciary matters and that it came from the TUC. It is worrying that trusteeship is turning so fast into a part of the endgame where the aims of the scheme have become 1, reward the employer for money paid in as deficit payments and 2. a transfer of the rest to an insurer in advance of buy-out.
I would like to say that I got a lot out of this session but in truth I didn’t. I do hope that the TUC are more vehement and that the Charity sector is more forceful in ensuring that members get a good deal out of pensions. Of course for most people, the workplace pension is only a small part of their retirement finances bit it will grow over time and it is important that member representatives become more vocal.
The Unions are paralysed and absent on this.
£50bn pa of DB pension wealth gets shipped off to insurers, containing £5-£10bn of embedded value that would be must better used to provide better inflation protection for the millions of members who paid into those schemes with cash and labour for 40 years. Pensions under insurance are subject to strict inflation caps, and inflation is what will eat away at those pensions over the 20-30 years in retirement.
And the unions – too timid, fearful of upsetting their public sector DB train to stick their hands up for the millions of private sector workers (but still workers!) seeing their inflation protection shipping off into the Bermuda sunset.
It’s a scandal and an embarrassment, and under a Labour Gov’t !!!
I believe it is a lot more than £50BN, if you consider buy-in policies and schemes with LDI in place.
Even the Pensions Regulator has blogged that it could be evidence of weak governance if trustees do not consider possible future discretionary benefits in their “end game” planning.