As I nipped around the South East of England yesterday, I found myself by chance on a train without a working laptop but with the chance to plug into a podcast. Lately, I have enjoyed the VFM podcasts and the promise of this one was of a quite new voice. I read Rory Murphy when I can as he speaks of the 6m employees in this country who are in unions and for the trusts he’s trustee too and he is determined that pensions return to the co-operative mutuals that I remember when there were 14m unionists and had more of a voice.
I wanted to listen to Rory Murphy, was prepared to put up with some Arsenal gloat ism and plugged in where ever I could get a signal
For the first time ever, I felt moved at the end of the podcast to write to the guest and thank him for what he said and how he said it (and to congratulate Nico and Darren). You can listen to it here #144. For once I won’t complain about an 18 minute overrun.
When you’ve done your 78 minutes, you’ll have heard from someone who is quite apart from advisers , insurers and asset managers and whose interest is for the people whose pensions he is trustee of.
He needs not be rude about master trusts as it is quite obvious that he sees their commercial imperative as quite at odds with value for their savers value for money.
It is becoming obvious over the past few years that the big winners in terms of durability are two master trusts in Nest and People’s that do not have a commercial imperative to reward shareholders but are mutual- in Nest’s case it is serving Britain’s employers who have no interest or budget to go further while People’s it’s imperative is to maximise the member’s outcomes as like Nest it has no shareholders to reward.
Murphy’s dry humour feeds through. He points out that it would be in the interests of small DB schemes to form co-operatives to buy services collectively and he advocates mutual ownership as a way of delivering pensions in general. He does not go so far as praising DC savings (though that is what this podcast has been about) , instead he argues that value for money is in the eyes of the member. It is to a large extent in the deferred pay that the pension offers (and this will become more obvious for DC with the pensions dashboard). But it goes beyond that for Murphy. He wants the pension scheme to engender financial well-being and he discusses the work he has done for MNOPF and others helping employees to understand not just money but what the security of pensions can bring them.
I have to admit to finding myself welling up somewhere outside Hayes and Harlington as I made my way to a meeting with a large firm of actuarial consultants to explain Pensions Mutual. Pensions Mutual is being formed with the help of the FCA’s mutual unit to allow employers and members to benefit from CDC by letting them influence the management of the CDC scheme and benefit from the success that results.
I had the idea before reading Rory but the determination to see it through- from reading this article
We aren’t on the same page but we’re writing the same chapter! Rory is doing good things for the unions in giving them energy to make the nearly 5,000 remaining DB schemes (mainly small) , work for their members and not just the City of London , Wall street and Bermuda.
I would hope the unions will pick up the baton (that they have often dropped) and look to have a say in the future. We cannot go back to the broken model of DB but we can work together through co-operative mutuals to deliver VFM through improved deferred pay.
I am pleased that Rory Murphy can also see beyond money when talking about value. Many people find value from small pensions which do big things for them and many people are sad about having big DC pots they look like leaving to the tax-man having got little fun from their wealth.
Somewhere in the middle are most of us and the sanity of such people was to be found in the consolation that Rory could give his fellow gooners. Perhaps he’d read this article on the BBC website, I read it later that evening!
A lot of sense there.
I have for a while been thinking of pension arrangements as either commercial or mutual.
I wonder why it is the FCA and not the TPR that is taking the lead on Pensions Mutual. It would seem to make the most sense for Mastertrusts (where the provider effectively controls the composition of the Trustee Board) and DB where it is the employer (who can appoint a sole trustee or can create issues with member nominated trustees).