I don’t suppose that former Minister Guy Opperman knew he would be reported at the Aptia conference yesterday. He works for them a couple of days a month and was delivering the kind of comments that would have gone down like a lead balloon had he still been at the DWP!
But well done Chris Marchant of Corporate Adviser by this excellent account of what he had to say (I don’t often agree with the guff that comes out at these events but I like what Opperman said and how it was reported (strangely comical picture!)
Of course the Pension Schemes Bill will not drop VFM even though it should. The rumour is that billions of pounds have been spent at the Pensions Regulator and FCA to get a system which can punch out VFM assessments.
Although I wasn’t at the Aptia event (presumably still the privilege of Mercer clients) I can enjoy the words of Opperman reported here
“They made a complete basket case of Value for Money, and they should scrap it and throw it away and start again,” says Opperman.
“It is utterly unworkable, as they have presently proposed it. Sadly, anyone who works in the pensions industry will tell them it’s government by committee. The madness of having two regulators (The Pensions Regulator and Financial Conduct Authority) who don’t talk to each other has made it a really awful example.”
I tried, with Hymans Robertson , to offer DWP a system that would not have cost billions or indeed a million pounds. It would have cost a few quid to analyse data from member’s accounts and tell us all who had got VFM and who hadn’t. We chose a score out of 100 but we could have done a traffic light system but it was not deemed good to go.
I suspect we were accused of offering the truth, something that has never been a value of performance measurement that will give us a lot of actuarially derived mumbo jumbo which really is no good for the man or woman on the Clapham Omnibus (the underground not running).
Thank goodness we have Guy Opperman as well as the VfM podcast condemning what has become of the original intention which was to give people a verdict of what they had got by way of “interest” on their savings. Ok, I use the wrong word but that’s what people think of as the internal rate of return and rightly so. If I give you money, can’t you tell me the interest rate you got, if you can’t tell us what interest rate you expect to offer?
There is of course no measure of VfM for CDC , because what you get is not a pot but a pension and the pension cannot fit within the VFM approach adopted by the Government.
No worry, CDC is not subject to the point of VfM which is now to cull underperforming pensions. As it stands the VfM framework will operate under a “traffic light” system, with consistent poor performers losing the ability to receive auto-enrolment contributions.
If you aren’t in the herd (and the bigger you are the more you’ll hug the herd), you will be put on zero rations and have to sell up with a big fat workplace savings scheme. Of course this is nothing to do with pensions but everything to do with tax incentivised saving plans.
I give up on VFM for pensions and so does Guy Opperman, I like the guy.
