A subtle message for employers from a pension manager who’s read the Commission’s report.

Posted on May 22, 2026 by henry tapper

I have read the Pension Commission report and I have called it boring in the way that AI written reports can be. Much of the personality of the 190 pages has been removed and replaced by the bland language of consensus.

Despite that, the underlying gist of the Pension Commission is that things aren’t working and they need to change,

How a large and complex employer reacts to the PC report.

Monty or Muntazir

Monty Hadadi picks this up in an excellent post that talks of the challenges to large private sector employers who will need to lead the way. I understand that not only does First Bus manage busses with bus workers but it employs more people to run trains. He therefore sees his people in his own DC scheme but also in the Railpen dangers and as usual there is a DB scheme in place for older First Bus workers, many of whom are now retired. To suppose that large travel companies run simple pensions  is to ignore the reality that most of travel is run on franchises where your ownership of people’s labour is transitory, you will win and lose franchises.

Remember this when reading Monty’s reaction to the Pension Commission.

Two key messages from Monty

  1. That this will be expensive for employers in the long term
  2. That pensions are the way people “exit work” when they retire.

This is a message that I hope that will be amplified til it hits the boardrooms of our largest private firms. Employers must start taking responsibility for people’s retirement and to do this , they will need to reorganise pay and the retirement wage. This is a subtle and short message.

Posted in pensions | Tagged , , , , | 1 Comment

Do you really want to give us the nastiest hardest problem in finance – Steve?

Posted on May 21, 2026 by henry tapper

I suspect that former pensions minister Steve Webb is annoyed by chapter 5 of the Pension Commission’s report this week.

This is his comment on LinkedIn

 

Here are excerpts from Steve Webb’s Times article published this morning. I know it will get attention from those who value freedom over interference by the State.

Portrait of Steve Webb, a man in a blue shirt and patterned tie smiling at the camera.

No one should be able to stop you from buying a Lamborghini with your pension

The former minister Steve Webb was instrumental in the 2015 ‘pension freedoms’. Here’s why he stands by the landmark policy

With all the leaking that goes on these days it is strange to recall a time when a budget came as a genuine shock. But George Osborne’s in 2014 was one such occasion.

The Conservative chancellor announced, to a stunned House of Commons, that people would no longer be forced to buy an annuity with their pension pot. Instead they would be free to take it all in one go, take it in chunks or buy an annuity if they wanted to. Thus “pension freedoms” were born.

As the pensions minister at the time I worked on the announcement with the chancellor. I was pressed in a BBC TV interview the day after the budget about the risk that people would be reckless and blow their pensions in one go. I replied that if people “wanted to buy a Lamborghini” with their pension that was fine by me. It turned out that this would be the only thing I said that anyone would remember. And, despite a report by the government’s Pensions Commission this week that is decidedly hostile to pension freedoms, I stand by that remark. Looking at what has happened in the decade or so since the policy was implemented, what is striking is how responsible people have been.

People may be responsible but they are confused. The State Pension pays them what amounts to a wage in retirement, it pays out an increasing amount each year and pays a wage to your spouse if you die first. On the other hand, the “pension” they get from auto-enrolment comes like a flat-pack table, you have to set it up to eat off it over the years ahead.  Most people would prefer the State Pension and that’s because set up for them and not a pot of money with the set of instructions missing.

This is what annoys ordinary people , the  unions and  the Pension Commission and from my conversations with all three parties, I can see why CDC and the default income that comes out of DC plans cannot come soon enough.

That people can opt out and into “pension freedom” seems sensible enough. Those who want their pot to spend as they want can always do by exercising choice but most people don’t want choice, they want the wage to take over from what they get when working.

Steve concludes

People who reach retirement with a decent pension pot are the opposite of feckless. They are the ones who were willing to sacrifice consumption — often before the days of automatic enrolment — to build up a nest egg for later. Freeing them up to use those hard-earned savings in the way that is right for them is a policy of which I remain proud. Let us hope that a “government knows best” mindset does not undo this good work.

The Liberal in me agrees with Steve that people have the choice to do what they want but what I can’t agree with is that they’ve been saving for a “nest egg” (Steve’s phrase). The chart shows that people’s eggs are now hatching and we should be expecting a wage of some kind – resembling the State Pension. Otherwise why bother with pensions? We might as well go to ISAs which at least are what the packet says they are and don’t need an instruction booklet!

I am quite sure that Steve doesn’t want to do away with “pensions”, he was a pension minister  and he still works in the pension department of LCP. The Times is a home for wealthy people who may not need a wage in retirement but I doubt that many wealthy people feel so secure as to want to face their future without an insurance against living too long and a real wage for the undetermined duration of retirement.

It’s not for nothing that Bill Sharpe called turning a “pot to  pension” the hardest nastiest problem in finance. Do we really want that problem for the majority of us who have no use for a Lamborghini?

Posted in pensions | Tagged , , , , | 3 Comments

Is what’s happening with Capita and the Civil Service Pension something for TPR to get involved in?

Posted on May 21, 2026 by henry tapper

It is amazing that civil servants who amongst other things are guardians of standards in pensions are being to hung out to dry while their pensions remain unpaid , claims unprocessed. There is action that needs to be taken by Capita before the end of June, it should never have got to this and this is being documented outside the pension bubble.

PCS stands for the Public and Commercial Services Union, they are not holding back. Sadly this is getting virtually no air in the pension press some of whom seem more interested in the winners of their award ceremonies.

The civil service’s biggest union will demand a public inquiry into the process which saw Capita win the contract to administer the Civil Service Pension Scheme.

Delegates at PCS’s annual conference yesterday backed a motion asking the union’s leadership to call for a public probe into the Civil Service Pension Scheme outsourcing process.

The motion also commits the union to campaign for a

“strengthened statutory and contractual framework for all critical payment and pension services”.

Delegates also voted for a motion asking the union’s leaders to

“urgently seek a meeting with the minister for the Cabinet Office to demand insourcing”

of the civil service pensions contract.

“We are writing to the paymaster general calling on him to take the same steps as he took with the Royal Mail and to cancel the civil service pensions contract,”

she said.

Giving an opening address on the conference’s first day, general secretary Fran Heathcote noted that Labour had promised the

“biggest wave of insourcing in a generation”,

and said this had barely yet registered as even a “ripple”.

“Instead, we have seen civil service pensions given to Capita – and it’s a shambles,”

she said.

“But despite that, the government is now in the process of giving Capita the contract for managing the payroll of 250,000 civil servants. What could possibly go wrong?”

A Cabinet Office spokesperson said:

“The service levels following the move to Capita have been unacceptable. An urgent recovery plan is underway, and our immediate priority is to stabilise the service and give current and former civil servants the service they deserve.

“The Cabinet Office will continue to use all available commercial levers to hold Capita to account and ensure they deliver for both members and taxpayers.”

TPR to regulate this administration?

While all this is going on at the DWP and other Government Departments, I hear that the administration of the State Pension continues to be an issue for those becoming pensioners.

Arguments that administration should be a regulated activity become louder, but will they be echoed by the millions of taxpayers for whom “pension” is something paid by the DWP or their Government funded employer?

Will we give this hornet’s net to another Government owned regulator – the Pensions Regulator? Currently it does not regulate pension administration – maybe that’s a little delicate!

Posted in pensions | Tagged , , , , | 2 Comments

What Reform UK could do to women’s pensions

Posted on May 21, 2026 by henry tapper

A Pension Time-Bomb if you’re the wrong side of the pension gender gap

I have published details of the work that Prospect Union have done and are doing to narrow the pensions gap. I am pleased that I can follow this up by a disturbing article by Corporate Adviser’s Emma Simon about a threat in an area that I thought was improving, the gap between women’s and men’s public sector pensions.

Political plans to reform public sector pensions risk widening gender pension gap

The article continues

However, this new analysis from the union Prospect shows that the gender gap now stands at 32.9 per cent (for the 2023/24 year) — a figure which it describes as still “unacceptably high”.

This gap between men and women’s pensions is 3.6 percentage points lower than the previous year, but it does mean the women pensioners receive on average £7,200 less a year annual than men.

The union however has warned that even the slow progress being made on this issue to date, risks being undone by policies put forward by Reform, particularly in relation to public sector pension schemes.

This matters not just in local politics, the Pensions Commission is looking at pensions from a national point of view and though its final report is due in 2027 , the  implementation of its recommendations could well be stymied by a new Government.

It says that there is a danger that political parties seeking to address the cost-of-living crisis start to see pensions as part of the “so-called culture wars” and seek to shut down public sector schemes to new entrants. This they warn will further exacerbate the gender pension gap in years to come.

Overall it says there has been a long-term reducing in the gender pay gap due to greater female participation in the workforce over past decades; greater female participation in pension schemes (relative to male participation – particularly driven by part-time workers) over this period; increased state pension entitlement for women (relative to men – driven by the introduction of HRP and, much later, the new state pension) and relatively high levels of women enrolled in DB schemes compared to men, especially in the public sector.

Our Pensions Minister recently told a Pension Age audience that this was a reason to be “perky“.

Prospect adds that a number of pension schemes have taken proactive steps to reduce their gender gaps in recent years. Some of the most effective incoming changes are those implemented by the Local Government Pension Scheme, which came into effect from April 2026. 

Prospect has called on the government to adopt the measures across other public sector schemes. The changes include:

  • Making authorised unpaid absences of periods under 15 days automatically pensionable
  • Extend the time limit for buying back pensionable service in respect of authorised unpaid leave of 15 days or more
  • Make unpaid additional parental leave automatically pensionable (with the cost met by employers)

Propsect senior deputy general secretary Sue Ferns says:

“The continuing reduction in the gender pension gap is welcome. However, there is still a shortfall of £7,200 a year in income for an average retired woman compared to an average retired man.

“Progress remains far too slow, and it is of particular concern that the gaps in some public sector pension schemes are even worse than the average.

“It is however particularly encouraging that some, like the LGPS, are actively bringing in measures to address the problem. The government’s agreement to assess these measures for other schemes is a huge step in the right direction and others should follow their example.

“We cannot become complacent that things will continue to improve. There is a real political threat from those who wrongly characterise this cost-of-living issue as part of the so-called culture wars, and who would seek to shut down public sector schemes to new entrants. If carried out this could reverse all recent progress, leaving millions of people worse off.”

Posted in pensions | Tagged , , , , , | 1 Comment

Prospect Union – “a pensions timebomb” for women

Posted on May 21, 2026 by henry tapper

Prospect and the Pensions Officer Neil Walsh have for a number of years been publishing a report on the pension gender gap. We are coming up the next publication this summer.

In the meantime I’m pleased to see Prospect’s voice no longer being in the wilderness. This was their reaction to the Pension Commission report this week

Among some of the findings were that women have around half the value of pensions savings when they retire, provision for self-employed people is hopelessly inadequate, and not enough is being done to take account of people with caring responsibilities. Overall there is a worryingly low amount of pensions saving happening meaning a lot of people are going to have inadequate incomes in their retirement.

Steve Thomas, Deputy General Secretary of Prospect, saying:

“The interim report of the Pension Commission highlights the importance and urgency of addressing the problems facing different groups in their retirement.

“The starkest problem is the Gender Pension Gap which Prospect has been reporting on for years with government only recently cottoning on to the seriousness of the situation. With estimates of the gap varying from more than 30% to almost 50% the government must use the findings of this report as a spur to take action.

“There is also a huge problem with self-employment which the system simply doesn’t cater for. Only 17% of the self-employed save into a pension leaving them incredibly exposed later in the life. This is something the yet-to-be-appointed Freelance Champion should make a priority.

“People should not work their whole lives only to retire in poverty. All parties must surely recognise this and agree a long-term plan to ensure everyone can retire on a liveable income.”

 

Reading the Pension Commission’s report I was reminded of an article from last July as the Commission was announced

Prospect welcomes return of Pensions Commission to tackle ‘pensions timebomb’

21 July 2025

The Pensions Commission is being revived by the government to examine why the pensioners of the future are on track to be poorer than the pensioners of today, unless action is taken to change course.

Prospect welcomes that the Pensions Commission, which was first established in 2006 and led the way towards automatic enrolment, will now be tasked with making new recommendations to confront the retirement crisis.

It is hoped that the Commission, which will have input from trade unions, the private sector and independent experts, will be able to report back by 2027.

Mike Clancy, Prospect General Secretary, said:

“The UK economy is sitting on a pension timebomb, with most employees not accruing enough to give them decent retirements, and it is welcome that the government has recognised this and is taking action.

“This review must consider a wide range of options for improving pensions for employees and self-employed workers, including the design of schemes and levels of contribution, and learn from the experience of trade unions who have fought to maintain decent pensions for our members.

“Prospect has been leading the campaign to tackle the Gender Pension Gap, and it is welcome to see the government acknowledging the scale of the problem and including it in this review. There are steps government could take now to tackle this injustice, such as ensuring all maternity leave is fully pensionable, to stop pension gaps opening up between male and female workers.”

A voice in the wilderness for many years

It’s been a voice in the wilderness for many years.  This Union that has got little airplay for this work but I hope that now this gap is featuring in the Pension Commission’s thinking, its reportl get a little more coverage.

Here is the link to the latest updated report and an update note put out by Prospect this month

Their 7th Prospect Pension Gender Gap report is published here

 

Posted in pensions | Tagged , , , , | 1 Comment

Cost caps seldom work forever; especially when they lead to price wars!

Posted on May 21, 2026 by henry tapper

Supermarkets object to price caps, pensions should long ago have ditched a price cap on workplace pensions for the same reason.

In my supermarket you can pay well over the price of a pint of milk for a pint of “Duchy Organic” milk that would bust through any price cap because the cows that made it live a pampered lifestyle in a lovely field near Windsor Castle (or at least that’s what we all believe).

The man from Marks & Spencer said

“it was not the government’s job to run businesses and it should instead implement changes to tax and other regulations to limit price increases for consumers”.

I agree, my family now shops in Aldi in preference to M&S for staples and we go to Waitrose and M&S for treats. The consumer for food is smart enough not to need protecting, the market gave us Aldi and Lidl because we were fed up with paying more than we needed to.

 

As with food, so with financial services? Sometimes we do need caps.

Martin Lewis teaches us a number of ways to compare what we are buying from insurance on our cars and houses to savings rates. We know what we are buying and pay the right price, sometimes paying more where we are not sure of the rival’s product.

But in 2012, 2013, 2014 and so on through to 2018, employers were purchasing savings vehicles (hoping one day to be pensions) that were being sold on investments that Steve Webb and the DWP could easily be rigged so crooks could make off with vulnerable savers money. The 0.75% cap on total charges was implemented in 2014 because the employers, diminishing in size and sophistication as Auto enrolment staging continued, needed to be protected from buying rubbish for their staff.

We had come off a financial service crisis that happened when banks were allowed to get away with it and  there were many players in the AE world keen to charge commissions for all kinds of things that could have made AE a scandal. Webb was right to put a charge cap in place.

But when charge caps lead to price wars?

There comes a time when charge caps work against the consumer. This has happened with AE savings schemes. Some deals done between providers and employers have seen the charge on the saving vehicle bottom out at 0.1% pa. The BT GPP set up by Standard Life is an example. It is a great deal for plain vanilla investments but leaves no space to turn pots into pensions and savers , when they move to decumulate their savings find themselves in unregulated drawdown products (technically personal pensions) that have no cap.

The alternative for most savers is to take the cash and run. Better to have the cash in the bank, pay the tax and get out of some contract you neither understand or trust.

The weird thing about the cap is that even at 0.75% pa  it has massively distorted the pension market to a point where pensions have been driven out.

So what of other areas of pensions? Is every pension capped for charges?

I’ve mentioned the Personal Pension, now known as the Self Invested Personal Pension to make sure that we do not confuse it with workplace pensions . These are wealth management pensions which have been used as wealth protectors (hence the hatred of the IHT changes). They are not subject to a charge cap because to do so would make them unadvisable and uninvestable by wealth managers.

But there are other pensions that are not subject to charge caps. Occupational pensions, including LGPS and USS, do not have to worry about investment costs and incur substantial costs investing in such obscure areas as private credit, private infrastructure and infrastructure. These charge- busting investments are now being scrutinised by Reform UK for VFM but not by TPR or FCA or PRA. That is because no charge cap exists for occupational pensions where the sponsor is underwriting the payment of guaranteed pensions. The council tax payer for instance, guarantees that council workers will get paid a promised pension by LGPS.

We have never felt it right to cap the charges of DB plans because this type of pension is “institutional”, the charges are not paid by members (as in workplace pensions) but by the employers who have an institutional relationship with fiduciaries (usually trustees) who are bound to get best value in the market.

So where’s the problem?

The problem is where the services required by savers expand to include pensions (decumulation as the workplace savings organisations call them). The Pension Schemes Act requires workplace savings products to offer regular income for the rest of people’s lives and to do so either through CDC or some form of flex and fix – ending in an annuity.

At the same time these savings plans are being asked to live with the Mansion House Accord which means that savings and presumable decumulation funds will be required to invest in a more expensive way than has been the normal since the charge cap arrived.

Investment costs for savings plans could be virtually nothing where all that was happening was “accumulation” and index-tracking passive funds were available for next to nothing from investment houses who lived on wafer-thin markets, subsidised by stock lending.

But now things are changing. The emphasis of the Government is that saving includes investment in private markets (with a threat of Government intervention if it doesn’t happen). Mandation is not quite a charge but it has the same impact, requiring savings companies to offer workplace pensions within very tight charging limits. This is because of the charge war that saw voluntary agreements between employers and providers that made charges incredibly low.

And while investment costs are rising, so the threat of having to provide “pensions” whether through retirement CDC or flex and fix means more work and more expense to the savings organisations. Many of the prices negotiated will be hard for providers to increase.

This is why the charge cap may become a problem!

Some DC workplace pension plans will need to renegotiate deals , put prices up and while these won’t be to 0.75% , they will be fought by member representatives  who may include consultants, unions and members who club together where there are no unions.

I have not heard of anyone arguing that this is a problem yet, but I’m pretty sure that the savings organisations (mainly insurers and insurance broking consultants) will be facing problems in 2027 onwards when the Pension Schemes Act begins to bite and where CDC starts eating at their workplace schemes.

Posted in pensions | Tagged , , , , | Leave a comment

Five chapters to get our Pensions satisfying us in 2050 – really?

Posted on May 20, 2026 by henry tapper

The Pensions Commission is a little light on what we have already that can help us get through to 2050. I’ll only be 89 then and hope I’ll have plenty of life in me!

Here are the 5 sections of the Commission’s report that I’d like to add some lustre too. We could be a lot further to 2050 than we think!

I don’t think there’s much sense in a very long executive summary followed by chapter summaries (not to forget chapter 6 which is a conclusion.  So I will re-publish the 5 chapter summaries and add to each chapter a few thoughts on what we could do better with what we’ve got.

We can do one thing that we haven’t done and that is get this message over to those who are under 40. I don’t see much youth on the Commission. We’re the lucky ones who are pulling up the drawbridge on our children to enjoy retirement in our moated castle.

The choice that Chapter One sets me is whether to be smug  , whether to share my wealth through taxation,  or whether to find ways that younger people can participate in what I’ve got through productivity and investment. All of these are possible – we have the tools to hand.

We have some of the best data on how rubbish we are at saving and how poor we are and will be in retirement. We have the capacity to produce any number of reports looking at our income n retirement and it will always come back to the same conclusions, we haven’t got enough from savings . I’m not sure this deserves a chapter but all these reports sent to Pension Commission had to find a place other than the waste paper bin or “trash” as my folder calls this stuff.

When it comes down to it , we have those who are being bullied into saving via auto-enrolment and those who chose not to or do so reluctantly (contributing as little as the employer let’s them).

Employers are fine so long as you have one but many people don’t have a boss – either because they are unemployed, self-employed or simply not being in a position to look for work. 40% of us are like this and though we are at record lows of unemployment , it is not going to be solved by the Pension Commission. We don’t have a way to force people into employment! We don’t have a way of making people save more other than turning auto-enrolment into pension taxation.

To get through to 2050 , we are going to have to be resilient. There are those in their 90s who can remember what it was like during the second world war and those in their 80s who can remind the austerity of rationing, but those of us born from the mid fifties have never really had it hard and while things may not be quite as good as they were 20 years ago, we are a pretty cossetted society. We are going to have to relearn resilience if things get worse over the next quarter of  century. Tough! The millennials like me may have to pull in our fat tummies!

This section has got all the attention because it points at the three groups who get a bad deal out of the pension system, the self-employed, the women who can’t do a full career’s work and people who don’t earn much for a host of reasons.

I could point out a few things that people could do to make things better. The self-employed can save into Nest though nobody tells you and you have to work hard to find out any details.

As with so much else in the Commission’s report I find a lot of blogs on the issue. I also find reports such as Prospect’s gender pension gap research, with the 8th edition due out in a couple of months.

This is how I find the first four chapters which takes us to page 143 and perhaps the most contentious of the report.

This report doesn’t pull any punches.

Having saved throughout their working lives, people deserve and rightly expect access to fair, stable retirement incomes. Yet relying on individuals to actively engage with the complexity of decumulation decision-making does not always appear to be
effective.

While government is taking steps to support decision-making at retirement, this support must operate as a genuine default wherever possible. Strong, well designed defaults are essential to ensure that the vast majority of savers – regardless
of level of engagement, pension wealth, or demographics – is protected from the real possibility of declining standards of living the longer they live

Instead it demands changes – which is what the Pension Schemes Act is going to deliver (subject to secondary legislation) and what CDC is already delivering and could deliver a lot more when regulation is in place. This gets a couple of paragraphs.

Infact chapter 5 is a little long and a little tedious a  rehearsal of so many reports that have been produced over the past ten years.

In its conclusion, the Commission states

The State Pension is delivering what the first Commission recommended, but private pensions are not doing enough.

Let’s not get too angry with the private sector and remember that it hasn’t been till the 2025 CDC legislation that CDC has become good enough for everyone but the Royal Mail. Steve Webb tried to introduce CDC in 2015 but it took ten years to get agreement of what could deliver.

Conclusions are hard to find

There are five chapters and a lot of introduction and conclusions. But it is hard to see what the next steps can be. There are solutions to most of the problems identified that need to be implemented.

It’s a lot of pages to get to conclusions that this blog and those who write me blogs and commentary came to some time ago. The Pension Commission will not have a problem to solve that hasn’t got an answer waiting for someone who will listen!

 

 

Posted in pensions | Tagged | 1 Comment

Dashboards and what they’ll show to people.

Posted on May 20, 2026 by henry tapper

I couldn’t blog about the pension dashboard without doffing my keyboard cap to Richard Smith who I feed to but who is much better at feeding back. Here for starters is a post from a couple of months that got me thinking what I’d be thinking if I was to be a pensioner at USS and saw my pension on the dashboard.

I use this as an example because all the talk at USS , its employers (UCEA) unions (UCU) and its members is about the amount of annual increases (pay rises in retirement) that will be dished out by  the fund. On the employer’s side there is a wish for them to be paid out on a “what we can afford” basis – known as conditional increases (some would liken it to CDC). Nest’s default (for 14m of us) will also have the increases Nest can afford to pay (Paul Todd calls it a type of CDC).

But as far as I can see , USS and Nest’s projected income on the pensions dashboard will be the same as all the DC schemes that have no intention of delivering projections other than as SMPI. SMPI – or statutory money purchase illustrations , are quoting a level annuity as what you can expect but this is not what you’ll get from Nest or USS or from workplace CDCs for that matter.

What all these schemes (DB, DC and CDC) are doing is showing the first year’s pension on a like for like basis. But level pensions are not the same as “real” pensions. Real pensions are the ones that go up every year. Some will go up by RPI , some by CPI and one goes up with a triple lock!

My actuary, Chris Bunford, tells me that half of the value of a CDC pension is in the increases offered before and in retirement to the pension promise that we’ll show (I assume) as a SMPI or Estimated Retirement Income (as the Dashboard calls it). Whatever CDC offers isn’t guaranteed like the increases of USS (though this could change if they go “conditional”). The guarantees within DB schemes differ from full RPI to caps on increases of as little as 2.5%. In short the issue of pension increases you are getting, how secure they are and whether you get them at all, is all ignored by the SMPI.

Imagine the State Pension without not just a triple lock but any kind of increase! Imagine DB plans where the increases had been stopped (I know some private DB schemes tried to reduce liabilities by getting members to swap increases for cash incentives or bigger pensions but this is now frowned upon). Imagine how much easier for insurers and other DC providers to show off their pensions when they are offering level pensions which can only be obtained by buying an insured annuity!

To sum up, I am worried that the Pension Dashboard, in ignoring increases will be accidentally confusing people into thinking all the pensions shown to people are level and have no increase or conversely helping people to think that all their pensions are triple locked! I am sure there will be people who get confused both ways!

If all the pension dashboard was, was a “tracing service” then the question of income and of increases could be disregarded, but the dashboard has chosen to show everyone’s pensions (or pots turned to SMPI style pensions) would be irrelevant.

But that’s not what’s going to happen and if we want people to do any kind of thinking about what they’re going to get not just year one, but year 5, 10,  15, ….30 on from years one then we’ve got to explain increases.

Increases are a pension issue, not a “pot” issue, but we are now thinking of DC as a pot turned into a pension, CDC is a pension bought on the day of contribution and increased each year till death , the same works for DB, everything on the dashboard will be explained as a pension.

 

 

Richard Smith knows this, he was part of the team in 2020 , who agreed to show pots as pensions and my understanding is Richard was key to the decision. Now we need to ask ourselves what is the pension dashboard doing to people’s expectations of retirement income!

The Danes have struggled  for many years running a dashboard that shows level pensions. Now they’re shown going down whenever there’s inflation. We have inflation almost every year! Here’s how it looks (thanks again to Richard Smith)

Its the turquoise box that goes down – as it represents a level pension like what we see on SMPIs

 

Posted in pensions | Tagged , , | Leave a comment

PP Live 2026 – for those who weren’t at the Pension Commission launch yesterday!

Posted on May 20, 2026 by henry tapper

 

You’re either one of the 49 people who run our pension savings or close to them to get a seat at the Pension Commission’s launch yesterday!

The Commission’s launch coincided with Professional Pension’s annual discussion of the nuts and boults of running pension schemes – DB, DC and CDC.

The day was bookended by two keynotes, the first on the state of the global economy from Jennifer McKeown

the finale from Sir Richard Shirreff about the safety of the same globe!  I sat for the latter talk next to my Ukrainian friend Natalia,we both had tears in our eyes though both Jennifer and Richard gave talks of some resilience, we will win through.

A very brave move on Jon Stapleton’s part was to load the morning with sessions on ESG and the speakers spoke with a prominence they acknowledged isn’t normally given to pensions as a responsible force for good in the Environment , in Society and in Governance.

There followed a discussion of how DB schemes could invest and measure investment and liabilities as insurers do. This from Schroders got approval from my friends who are DB Trustees. Peter Cameron-Brown explained to me he’d been using dynamic discounting for many years. You learn something new at these events.

Sadly I was called out to have a discussion on CDC with friends at our regulator and missed a talk of Barnett Waddingham’s Mark Futcher on how DC hopes to get its act together to pay pensions!

I also missed the first half of BlackRock’s duo of talkers on CDC. I got back in time for the questions and was blown away! Not only were they talking good sense but they were doing so with a vigour that had been in short supply before! I gave them two 10s on the feedback chart and I’m glad I remembered to hand it in at the end of the day.

I had heard that BlackRock were interested in providing investment services to CDC schemes offering workplace pensions and I was delighted that here were people who were talking about getting started in 2027.

Anthony Ellis of Hymans Robertson finished the morning with an amazing talk on how we can get diversity into DC (and CDC) pensions.  I am minded to talk with investment pools at LGPS and get them involved as Anthony suggested that we move towards a more collaborative approach between DB, DC and CDC.

I’ll give this plug for the Convene venues, here and at 22 Bishopsgate, they are not extravagant with food but offer fodder which is wholesome and typically delicious. Lunch was an opportunity to meet with old friends and meet some new ones.

The afternoon allowed me to listen to those I respect but I was too badly organised to manage movement between the various streams and was gutted not to make it to hear Paul Waters (an old Gissings friend). He was part of “key themes”, a stream of speakers I could have enjoyed if I knew where they were speaking! I also missed Oliver Morley on dashboards though I caught him as he was leaving to give him my thoughts on presenting income for DC and CDC (but more of that later!).

I did listen in to talks about communications with members from administrator and wondered whether social media could play a part in this. Many of us have questions we could find much easier answering those who pay claims on pensions using WhatsApp of even Facebook, why are we restricted to email so far? I will be talking with Aptia over the summer and would have asked them in their session had there been time for questions!

This may sound a little random a day but it wasn’t. I was there to speak for and hear about CDC which is my passion. I sneaked in a question to the final pensions session before the military finale. The question to Sophia Singleton, Dominic Harris and Harus Rai was simple

Does the panel believe that CDC can provide better pensions?

I left the question on Slido anonymous so I could get it liked and liked it was as were the answers of the panel which were diverse, I will forever love Dominic for his response as the Ombudsman, CDC should have friends in every corner of the pensions world and you are now a friend of CDC to me- Dominic.

Thanks

Thanks to Professional Pensions for this enervating day. If I’d thought it was rot I would have said so; it wasn’t – it was very good. I only wish you had the video of the first half of the BlackRock talk! But I am determined to hear it from the horse’s mouth”

Posted in pensions | Tagged , , , | Leave a comment

Savers need to know how their savings did – say these heroes of VFM!

Posted on May 20, 2026 by henry tapper

Jo is right, how we have done with our savings should be important to us in the UK as it is in her native Australia

But it goes further than the analysis from Corporate Adviser (good as that is)

Olly and Dean are right, the best way to judge the master trusts is by what they have done for their savers.

This cannot be done by maths and actuarial assumptions, performance needs to be measured using the data from member’s savings. That tells you the value of their money saved .

It is best done with individual’s data because DC is not collective but individual, we all get our own results and though these can be aggregated, the risk stays with the saver.

My firm, AgeWage, has a system to measure how the savers of a DC workplace pension have done and the system can establish whether there has been advantage gained by those who have chose their own funds against those who’ve allowed their payments to be invested in the default.

Using individual’s data picks up on what Olly Payne , the reward director and international pensions director of Ford.

To make a fairer comparison for consideration of workplace pension providers, I’d be interested to see how the results changed if it was based on monthly contributions for 10 years?

This is the crux of the problem for the value for money project set in train by the DWP and now being developed by TPR.  We cannot tell people the value for money that they got by using comparisons based on actuarial brilliance, we need to measure how people have actually done and that means using their data to measure their experience.

Dean, who like Olly is an actuary, is prepared to use the short-cut that Jo has publicised and  for a banner, I think he and Jo are  quite right. Jo is right to conclude that over time equities will outperform funds that balance growth with defensive strategies (the problem for those she quotes as underperforming). Those who support CDC know that in the long term you get better pensions from investing for growth all the time!

And of course you don’t have to be big to invest purely in growth, the likes of Lewis Investment master trust has proved that.

But this is too abstract for ordinary folk. If we are to move to a culture where people are interested in value for money from their pension saving , we need to give them that is more personal to them.

We should try looking  at the savings we make and the pot we get back! It’s the only way to give those who take all the risk , a valid measurement of performance that they can understand their defined contribution VFM.

Here are the heroes of this blog!

Olly Payne
Jo Cumbo
John Greenwood
Dean Wetton

 

 

Posted in pensions | Tagged , , , , , | Leave a comment