Let me use a weekend to plant a thought in the heads of those who influence their company’s and their company’s pension’s strategy. By company’s strategy I mean schemes that pay pensions not pots that people can drawdown or exchange for an insurance annuity.

Here are 11 questions for you as you enjoy your weekend!

1. Do you think it is right, inter-generationally fair, that those who have retired and are soon to retire, do so with a pension while those who follow them have to rely on DC workplace pensions (whether they are yours or those run by others over which you have little influence)?
2. Do you look at collective defined contribution (CDC) as an advantage to the average worker currently building a pot? Do you accept that it is likely to provide a better pension (up to 60% better says the Government)?
3. Is your company pension in surplus? Does it have more than enough to meet the pensions it has promised to those who accrued into it till it closed?
4. If there was a way that the company pension could be used to enable the generation of younger workers to get a pension like those currently or about to receive a pension from the company pension scheme, would that be fairer?
5. If a business plan could show that by investing to set up a Mutual which could act as the proprietor of the CDC, the company pension would make money to pay its pensions, might this be a good investment?
6. If it could be shown that the proprietor could pay the CDC scheme bills and return excess profits to employers as some dairies pay farmers against the milk they bring each year, might this not be an incentive to employers (including the pension scheme’s sponsor) to use the CDC scheme the Company Pension Scheme helped set?
7. If the Mutual were to exert governance that reflected the values of the company pension by appointing the right trustees , administrators, investment managers and people to make sure the next generation knew what they were getting, would that be congruent to the values of the Company Pension?
8. If the Mutual, by being owned by those companies and their pensions that invested to set it up, could pay dividends against the investment and by being tradeable , be sellable to like minded investors, would that be an investment that the trustees of the company pension could look at and invest?
9. As a result of the Mutual being set up , a CDC could be created that did indeed offer a way to pay better pensions to any employer which wanted to take advantage of CDC over DC, would this have been worthwhile for the company pension trustees?
10. Would, in this event, the arguments about intergenerational unfairness between a generation with pensions and a generation with pots be defused?
11. Would arguments about the sensible distribution of the surplus of the company pension become less heated as there was recognition that the company pension , through this investment in a Mutual, was not sitting on lazy money (as it is being argued schemes like LGPS are doing) but putting that money to work for the pensioners protection when bad times return and for the betterment of retirement for the millions of savers who currently have pots but no pensions?

Here is my thinking and one answer (in bold). It may not be yours!

These arguments and many more spin around my head. It strikes me that good ideas are really simple and that there is a lot of complicated thinking in my head that I need to simplify as a thought to you , as someone who can influence the Company Pension or the company that sponsors that pension and workplace pensions to boot! Here is my proposal.

DB pensions with strong finances should consider investing in the proprietor of a CDC scheme which they consider likely to provide a  good investment and have values congruent with theirs.