VFM podcast lasts more than 90 minutes.

I don’t know if I’ll be nice to this lot again. It’s gone to their pod , the latest of which is nearly 93 minutes which may make sense for a game of football but none for a pension podcast about Value for Money.

It got recorded on Friday morning and I am reviewing it over lunch (which is generally 20 minutes) and I have got to 20 minutes and the question “To CDC or not to CDC” has not yet been reached.

Look boys, I think there is something called “as sold” and this podcast is not “as sold, it is sold as being about CDC. We do get to CDC but there’s been 23 minutes (which is longer than my lunch break) so I am breaking off the review here.

Guys, I did not tune in to listen to you speculating  about the yet to be published trusteeship consultation and remarks by Ian McQuade I haven’t read. See you after work..

An afternoon of work on a business plan for delivering CDC follows

I return in the evening. Here follows an assessment of CDC from a smart actuary and a smart economist.

We start off in a long Spiegel about “the story so far” . Here we will have  discussion of whether people will get what they thought they were getting – pensions.

But then we have something which is truly elaborate , a hugely intelligent actuary getting stuck in reverse gear, an economist wishing we had done something about DB a quarter of a century ago.

The actuary in question is of course Nico Aspinall, his argument is that we are in a DC world and this is an attempt to restore “DB lite”.  there is then a huge incomprehensible invention of problems that could only be in an actuary’s fevered mind.

Darren is clearly lost but does his best to ground Nico.  But this is impossible – Nico finds himself in John Ralfe land and quotes Ralfe’s “magic money tree” “leverage” and “longevity hedging theory” to rubbish people getting paid a  pension.

I reach one hour of this seminar amazed that DWP, the Pension Minister, Aon, Hymans Robertson, WTW and First Actuarial – the firms who have done this modelling are all wrong. They all say we’ll get at least 30% and over a lifetime 60% by using a collective approach to paying pensions.

Why do we have actuarial firms, pension ministers – why do we have pensions at all? What follows is a diatribe.

What can the last 70 minutes of this diatribe against CDC include? There’s an econium to annuities, guaranteed income in retirement and a  discussion about annuities being built “lighter” to allow clever people to buy smarter.

Then we are off to a discussion of arbitrage where clever pensioners gang up against stupid pensioners. This ends up giving the rich an opportunity of taking the mickey out of the poor , something that happens all the time in pensions apparently.

Darren occasionally relights the flame when the lamp of Nico’s cynicism runs dry.  He does this with relish .

He concludes that we should stop doing anything about getting pensions sorted until we have had a pension commission and a lot more data about what is not happening in pensions to think about until we have another Government.

There is another stream of actuarial stuff , Nico calls the DWP’s consultation  document of the consultation on Retirement CDC as pseudo actuarial science, presumably not written by actuaries.

Value for Money?

78 minutes into this podcast,  I thought we might have been close to winding up but it just goes on. We get to VFM, There is a certain question which demands especial ridicule from Nico. The question is about “charge levels” and cannot be answered the way Nico wants it answered. Of course charges are being taken out of the pension, without charges the pension would be higher, we cannot be sure of how much more pensions will get from CDC net of charges or how much still more, a CDC pension would be than an annuity or a flex and fix drawdown/deferred annuity.

But the Proprietors of CDC schemes will publish accounts showing how much they have taken to manage transactions and funds and employ people to ensure the pensions are just. Here surely there is a chance for the VFM experts to tell us how much the “money” is and how much value people get?

We do get closest here to the question of value for money but ultimately the answer cannot be individually calculated, it has to be worked out for the collective, everyone paying their cash in and everyone getting paid money out and frankly people will not be overly worried about cash caps if they are getting value for their money

Nico wants to know how people will respond to the latest consultation, I’ll be happy to send him mine, because I find the questions interesting and genuine and in need of being answered so we have a better pension out of CDC.

What a shame that Jamie Smith likes CDC guys!

There is a little at the end of this huge and silly podcast that makes me think that there is sanity elsewhere.

The person  who was so sensible on a previous podcast – James Smith – did want CDC to work and said on the pod that it would. This man Smith, praised for being sensible at the start of the pod, become part of Nico’s problem.

I’d like these youngsters, Nico and Darren,  to reach out to me an old man wanting a pension and explain what I should do with the savings I have for retirement. I would shake your hand Nico and Darren if you have a better idea than CDC.