Claire Altman

This week’s VFM podcast did not go as expected for Nico and Darren as it featured  Claire Altmann as Standard Life’s Managing Director: BPA & Individual Retirement 

I have a very high regard for Claire. She is familiarly Clara and married to Adam Saron who was the Founder of Clara. Clara were the first and to date only superfund challenging the Bulk Purchase Annuity (BPA) and though they bridge to annuity later , they challenge the supremacy of BPA as the gold plated solution that the insurers , the ABI and it seems the PRA have done for the four years since Clara was authorised.

So it is awkward that she talks of her role at Standard Life as an individual and bulk purchase annuity provider. It is tough that she takes over from Tom Ground who was quite open that he left Standard because the insurer is currently out of market and I am quite sure there is something of Adam Saron about Tom.

I wanted to know about this when tuning into podcast 145.

We had a bit from Claire about providing investment product to Quilter.

We had some rumbling about the lack of certainty from CDC from Nico but mostly this 70 minute podcast was about defined benefits – what people Claire told us – really want at retirement.

Here she went dangerously close to being a CDC fan, especially when she explained that private DB pensions in the UK closed when they  became guaranteed rather than aspiring to certainty. If pensions worked “aspiration-ally”  (Steve Webb’s original word for CDC) then why annuities to buy them out?

Claire , the Clara of Clara, our first superfund, was also the driver of Smart for a time and in this pod she admitted that instead of being the shoe in solution for trustees who found their DB funds in surplus, they now had to explain why people were better off with an insurer’s annuity than in a superfund or with a new sponsoring employer as Stagecoach did with Aberdeen.

We didn’t get this far, even though Nico is a paid-up actuary, but she was actually talking the argument for doing the actuarial TAS 300 rather better than I’ve heard it articulated in many circles . TAS 300 is something that a number of members of the House of Lords are arguing should be done rather better too!

My conclusion as I completed my listening to Claire being quizzed on her CV is that Claire is doing the wrong job with the wrong company. Standard Life and Phoenix are retail insurers with their toes dipped in institutional pensions. They must find solutions for Standard Life’s master trusts and GPPs (which include a GPP for BT) and all of these retail DC pension schemes and plans need to end with the certainty that they will continue paying by default a retirement income as long as the members are alive.

Claire is utterly serious in trying to round the square peg for the round hole. But there are many issues that we did not touch on with annuities, not least the fact that the certainty that people buy into when buying individual annuities is the risk of inflation diminishing the value of its income over time. There is also the embarrassment that the consultants she needs the support of, (WTW, Aon, LCP, Hymans et al) are of the opinion that converting to CDC would provide up to 60% more than a DC pot converting to an annuity. That the DWP are telling employers that (headed by Torsten Bell) is even more embarrassing.

So, for all the wishes that this could be a discussion of VFM as Nico and Darren want to, it turned into a discussion of Value for Money as a means of satisfying people that what comes out of their retirement pension is a certain income for the rest of their lives.

The awkwardness of that is that the Government and the actuaries that support Standard Life as a master trust , are beginning to look a little askance at individual annuities and bulk purchase annuities on the grounds of them not delivering VFM. Claire seems still to regard the DB before it made guarantees as delivering VFM. This suggests her heart is more with CDC than annuities.

I am not entirely sure that Claire is happy about her role or her employer, there is a little of Clara still in her! If you want to hear the torture of her soul, then this podcast is for you!