I spent a day outside St Albans in a five star hotel learning that DC is alive and strong and that we sill be saved by Artificial Intelligence.
This seems to be the answer from those who invest DC and DC Master Trusts and sponsor this event. The majority of the long day was given over to exploring how private markets can be exploited to deliver the pots that will pay for our happy retirements.
Sarah Smart, formally our Regulator’s Chair, was brought back to chair the various panels we had throughout the day. By the end of day she must have been exhausted as she led each discussion with considerable discussion , from the initial debate with her successor Emma Douglas, to her conclusion eight hours later.
When she had finished, we – the audience – were able to speak for ourselves as there had been little time for questions thus far. What I noticed from the answers to questions posed to the tables was that the audience had a different view of what mattered to DC than our speakers.
Unlike a conference I had gone to last week, this conference had not discussed CDC at all, though that was what the audience thought the way forward. I had asked Emma Douglas how our opening discussion could avoid mentioning collective pensions or CDC once! Of course Emma’s answer was confident and I guess she anticipated the future for DC where we were looked after by Claude and his friends.
But I suspect that there are more opportunities for the private market asset managers with CDC than there are in the DC schemes we talked about today. I suspect that the increases in funding CDC schemes will increase from the current DC levels if the “pensions” is considered “deferred pay” and not an employee benefit.
Here I think that DC investment salespeople need to grow up a little. CDC cannot be swept under the table and delt with by AI. It is what ordinary people, whom the audience appeared to be, were not considering DC as excluding CDC as these sessions continuously did.
That is not to say that it was not a good day – it was! I spoke with a number of managers (under the Chatham House rule) who wanted to talk about collective pensions (CDC). I had the opportunity to go home with my friend Richard Smith and the 44 years young finance manager and Geordie -John Flynn. These are the people who I will best remember from a convivial day.
Thanks to DG publishing, their’s is a unique event that provides an opportunity to poke our heads into the investment manager’s world. They have an opportunity over the next few years to make much out of DC and CDC. Nest and People’s were their with their top investment officers , showing what can be done if you have £50bn or more (£46.9bn at People’s according to Dan Mikulskis), They have broken into a world where pensions are becoming collective as I told them.
They didn’t disagree, the largest master trusts are uniquely placed to deliver for large groups of savers who will default into something that feels like a pension. Their’s is the future of DC and ordinary people will benefit. It is ironically, a different world to that we were treated to at Sopwell House.