Lumera seem to have given up on collective pensions as something they can teach us about!
Last year I spoke with them because an employer asked me to. The employer knew that Lumera were operating down the east coast of Europe from Sweden to the Netherlands offering variants on CDC.
We all had hope that having bought ITM, Lumera would lead the charge and offer to administrate CDC in the UK. Instead of them, we have Aptia. Apria have picked up the baton and are running with it. They get collective pensions and free of Mercer and backed with substantial money, they are doing what Lumera will not do – offer administration and administrative systems for collective pensions next year.
What has gone wrong at Lumera? They’ve caught behavioural fever, that’s what!
I have read Lumera’s two pager (advertised above) and am flabbergasted. It talks to the questions that collective pensions are designed to answer. It suggests that rather than make it easy for people to retire, people should face a cognitive challenge
Sometimes the best behavioural intervention isn’t making a decision effortless – it’s introducing informed, positive friction.
A well-timed prompt, a reflective question or a personalised
comparison can encourage members to pause and consider whether the default genuinely fits their needs before continuing.
Lumera’s thinking on turning pots to pensions does not include collective pensions. It doesn’t want things to be simple , it will keep most British savers confused.
Should my interest as a member in “BPA” , make any difference to the pension I receive? It may be an opportunity to increase my pension from the no-lose option of run-on may have been lost but as a bought out annuitant I’ll never know that chance existed.
Actually insurers trust that members will not get uppity about ownership of the surplus, most of which goes to the insurer and its shareholders (now increasingly American). I’d like to ask this question at the Pensions Age Conference that’s coming up.
Can I really benefit from having to make choices about “decumulation” – a word that very few people outside DC pensions have not encountered. “Guided Retirement” is another concept that needs explaining.
Not only does it need explaining to the audience at next month’s Conference, it will need explaining to millions of savers whose pots need to be turned to pensions unless they choose to draw them down themselves – or cash them out (more likely).
We have worked on the basis that people benefit from pension freedoms to a point where people are fed up with it. In recent polls by LCP and consultations by Gallagher , the first thing people people want from collective pensions (CDC) is an easy retirement without big financial decisions (people have enough to cope with leaving the work. The second thing people want is value for money from the money they have put away for a “wage in retirement”.
So I read the Lumera paper with astonishment! The argument from Claire Hovey is that people can be taught by using behavioural science.
What do Guided Retirement pathways, decumulation and buy-outs have in common?
… they all share the same underlying challenge: they’re critical decision moments that can shape member outcomes for years to come. This matters because the quality of the outcome depends not only on the quality of the solution being designed, but also on how effectively members engage with the decisions that sit behind it.
In the case of buy-in/buy-out and shaking it all about in decumulation, the vast majority of us, this man included. 
