Bill Sharpe had sympathy for people having to turn pots of money into pensions!

First an excellent paper from SJP. If you’re reading this I’m guessing you like SJP, so do I.

I had a chance to work there when it started and I said “no” it was a mistake.

Then some thoughts for those  facing retirement and  the “nastiest , hardest problem in finance” without an adviser .

I’m guessing  you are reading about SJP because you are successful and you’ve been prudent enough to have money in your pension pot ready for retirement.

Now it’s time for what Bill Sharpe called the “nastiest hardest problem in finance”. As my blog puts it “time to turn pot to pension“.

SJP is advertising a very good article which hinges on this statement

De-risking a portfolio is often misunderstood. In practice, it simply means making your investments safer and more stable over time, although it can’t remove risk entirely and factors such as inflation still need to be considered. It doesn’t need to happen suddenly, nor does it mean sacrificing potential for long-term growth.

Getting all that right is why you employ St James Place and if you’re looking to include flexibility and tax-efficiency along with the right investment to meet your cashflow needs then I can’t think of many more reliable places.

But what you are not buying with your pension fund is a pension and if you want total security you’ll need to exchange your pot for an annuity. You pay a lot for that security and you may be interested to learn about another opportunity .

It is unlikely to be for you, but if you run an employer which offers workplace pensions for its staff then a CDC pension may take away the difficult choice that you’re about to face. Here is an excellent article about how a workplace pension that auto-enrols new staff into it and which can be used by existing staff can work.

It’s written by a group of advisers at Scottish actuaries Hymans Robertson.

You can read the document here, it is written by Paul Waters who I worked with over 30 years ago and Lauren Branney who may not have been born then.

The CDC pension is a fixed cost pension for employers, they may only want to pay the minimum for their staff under the auto-enrolment rules, they could pay it as if this was a defined benefit scheme (without the fluctuating contributions to meet guarantees).

Your company (or you) will not be able to get into one of these plans until next year when CDC schemes start to get authorised. The authorisation process begins on August 1st (except that’s a Saturday) and usually takes 6 months.

You don’t have to do anything about CDC , now or in a year’s time or ever. You might have a CDC created for you by your workplace pension provider , you may carry on with the kind of arrangement you are in with SJP – a DC retirement fund, designed to make you wealthy.

If you are interested in SJP’s wealth management and how it can pay you an income in retirement, you may be interested in the subject and solutions to Bill Sharpe’s problem because it’s yours now!