Hymans Robertson’s blue print for CDC success – (a mutual’s take on it)

Posted on March 10, 2026 by henry tapper

 

I spent yesterday afternoon and early evening with Hymans Robertson discussing what success looked like for them in the provision of CDC.

I have yet to see more than TPT and Pensions Mutual stick their heads above the rampart to be shot up though I think one “mastertrust consultancy” is planning to offer a multi- whole of life CDC from 2027 and the Church of England continue to plough its determined route.

For Hymans , CDC sees CDC as an extension of its work in DC as can be seen by what they consider themselves “experienced” in. Less contentious is their “capabilities”. I think that we are all inexperienced at “AIR” which I think stands for actuarial, investment and regulatory success. This is largely innovation though on a platform that will continue to deliver DC for accumulation and CDC in retirement and Blended DC- the kind of risk sharing that NEST is looking to deliver through its style of guided retirement, design and evaluation.

Well done Jon Hatchett and his team for what is being achieved at Nest , but it is a variant of DC and will I suspect become the benchmark for VFM in pensions in DC.

But Nest is not delivering CDC and CDC will offer a better pension (though without the freedom and flexibility).

It was good to have a discussion with the consultants to the consultants to Nest and one of the firms claiming that CDC provides up to 60% more pension than DC!

We focussed in our conversation on what actuaries do best, discussing concepts such as fairness and value to sponsors and members. Pensions Mutual is rather different to DC models in not aiming to offer value to larger employers by dropping its pants on its AMC.

All employers will get a share of profits and large employers will get larger shares than smaller ones as large farmers get larger pay-outs for bringing larger quantities of milk to the co-operative data. So our discussion of what dominates discussions of DC practitioners was brief – we do not intend to offer “variable pricing” though design collaboration will be with the founding employers who will help us design a CDC plan that works for them. It is inevitable that our design will be designed around the needs of early movers, they must have some advantage for taking some risk that the venture does not take off.

Our approach to the conversion we offer employers and their staff on cash received to pensions promised “factor update frequency” is dynamic. We look to use technology to ensure fairness across generations and we aim to eliminated subsidies between employers and within employers. If an employer has “special needs” we will consider a section for them, but the bar must be high, sections are expensive to set up, not least with the Pensions Regulator.

Our actuarial priorities are to deliver fairness and I am pleased that we seemed to be on the same page as Hymans Robertson.

So what makes for success?

As a salesman, it was sad that we did not spend longer discussing what will be popular! I am of the opinion that there will be different influencers on employer decision making. I think unions will be more important than they were in auto-enrolment DC workplace pension providers, not least because CDC is a pension in a way that DC has not been.

It is very hard to promote member experience without doing the job, I know as someone in pensions for over 40 years what good and bad member experience is and will look to deliver the best in an innovative way that matches what people (even those as old as me) expect from banks like First Direct and Starling Bank (my touchstones).

Our operations must embrace the best in interactions with employers over contributions and proper reporting to clients to build up a positive reputation. We know of one AE provider whose early failures have meant they have not kept up with People’s and Nest who got it right, these are the benchmark for operational succcess.

We will need to have the best governance, not trophy trustees but committed trustees who stand up for members.

We will need to have distribution. I am not sure that we can always underwrite who we take on as we would like but as a mutual our approach will be to accommodate clients under workplace pension rules. That means living with 8% of band earnings and high staff turnover. Mutuality has to have an inclusivity that commercial insurance does not need to adopt.

We do not see many providers coming to market in 2027, most of the mastertrusts will adopt CDC at retirement and the scheme design of UMES whole of life plans will be popular with employers who want a smooth ride for employees from saving to spending. We believe that whole of life CDC should give an infinite investment horizon and though the “continuity” rules may require a transfer of some fund assets into defensive assets, we see CDC schemes going for growth in a way that neither DB or DC have been able to do in the 21st century.

On all this we were remarkably well aligned with what Hymans saw as its blueprint to success.

Pensions Mutual will succeed by sticking to an approach that gives early moving employers their say.

Though regulators and consultants matter , it is the employer who is fundamental to CDC  success, the employer wanting staff  to get better pensions.

 

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

TPR’s new head of innovation has no experience of pensions?

Posted on March 10, 2026 by henry tapper

It is certainly innovative to put someone who has no background in pensions in charge of TPR’s innovation.

Here she is, commenting on her career progression.

If I have space left in my tummy for another coffee, I will have one with Sarah Meyers. I am not sure what can be done at TPR, that hasn’t been done, apart from innovate, it is undoubtedly a job with scope for improvement of the regulator.

She has had a career in Northumbria in Government , sorting out various departments and here is a photo of her on the banks of the Thames, with Blackfriars and the City in the background. She certainly picked her day well if this was taken in 2026, we have only had a couple where the sun has shone and it seems to have shone on her!

It is a feature of TPR recently , to hire from outside the pension’s community. Digital Data and Technology seems to be where innovation is at TPR, though I had hoped that it was sufficiently integrated to what we did that we would not have had to put a leader on a steep staircase to the cutting edge of pension innovation.

Let’s hope that she will find that staircase easy and that the shift from Northumbria to Brighton in culture and perhaps in person, will work out.

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

Is consolidation into Master Trusts inevitable for DC schemes?

Posted on March 9, 2026 by henry tapper

I was interested in this conversation between Muntazir (Monty) Hadadi and a number of established DC faces.

There is clearly going to be a lot of pressure from unions and other member groups to get the better pensions that are available from CDC.

This being the case, can good single occupational DC schemes be replicated in a multi-employer CDC scheme environment? That comes down to questions of sectionalisation and perhaps of ownership of the CDC itself.

I’d like to think that the driver for good governance should best member outcomes so the question to schemes such as Monty’s is whether the DC plan can provide returns somewhere close to those of a CDC scheme.

My guess is that bus drivers would prefer deferred pay than a pot of wealth!

That Monty , his team and his scheme are doing well cannot be denied, but could they do better in 2027 with CDC?

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

Ripple effects of software felt through asset managers (and our pension buy-outs?)

Posted on March 9, 2026 by henry tapper

Here’s what Reuters are saying about software (thanks Naomi). Is this  really backing up our pension buy-ins/outs?

Here’s those ripple effects c/o Reuters

  • Private equity firms face scrutiny over software holdings and AI risks.
  • Alternative asset managers lose almost $60 billion due to software sector shock.
  • BDCs questioned on software holdings amid market turmoil.

Asset managers and private equity firms found themselves at the sharp end of the AI‑driven shock hitting the software sector as investors fretted over exposure to loans and leverage tied to the industry.

The pullback in software – which has wiped out nearly $1 trillion in market capitalization in those stocks – impacted asset managers, with the group as a whole hurt.

The Dow Jones US Asset Managers Index (.DJUSAG), opens new tab is down nearly 5% for the week as of Friday afternoon versus the S&P 500 (.SPX

“There are a few issues compounding the drawdown,” said Mark Hackett, Nationwide chief market strategist in Philadelphia. “The trigger for the (private equity/business development corporation/asset management) stocks is driven by the software selloff and concern over loan exposure and leverage.”

Morgan Stanley pegged technology services deal volumes at nearly 21% of overall private-equity activity, noting that TPG Inc (TPG.O), opens new tab, Carlyle (CG.O), opens new tab and KKR were slightly above that level, while Apollo (APO.N), opens new tab was the lowest among the asset managers in its coverage.

The AI trade had “subsumed parts of the market,” said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey. “This is especially true for asset managers and PE (private equity) firms.”

With software stocks down 22% since January, loan-to-enterprise value (LTV) has increased for associated credits, raising concerns around default risk, BNP Paribas analysts Meghan Robson and Ben Cannon said in a note. LTV measures total debt against a company’s total valuation.

Software and services exposure is significantly larger in U.S. leveraged loans, around 17%, and 4% in the U.S. high yield loan market, the note said.

In the private credit space, software exposure is about 20%, BNP estimated based on quarterly filings of specialized investment firms known as BDCs.

LENDING EXPOSURE
The non-bank lending sector, which includes private credit funds and esoteric vehicles such as collateralised loan obligations, has also become exposed to the software groups’ declining growth and credit quality.

Software borrowers are the biggest exposure for private lenders and the most highly indebted, while their revenue growth is also slowing, data from alternative credit analysis group KBRA published February 5 showed.

With sales growth down to 10% from 18% a year ago because of factors including companies’ delaying or cutting IT spending, private credit’s software borrowers are also shouldering debt worth 7.4 times much as their profits measured before tax, interest and other deductions, on average, KBRA data showed.

This compared to 5.9 times average leverage across a more than $1 trillion pool of loans studied by KBRA.

One banker who works with asset management, who declined to be named, said alternative asset managers will face a test when they look to exit some investments, particularly in software.

Managers of business development companies (BDCs), a key vehicle in private credit through which a fund raises money from investors to then lend directly to mid-sized companies, have been quizzed about software holdings.

Ares executive Kort Schnabel said on a conference call on Wednesday that its business development company, Ares Capital Corporation, had “a very small amount of portfolio companies that could be disrupted.” KKR Co-CEO Scott Nuttall told analysts on a conference call on Thursday that the firm had taken “an inventory of our portfolio the last two years” and identified whether AI was “an opportunity, or a threat, or a question mark.”

Blue Owl said its software portfolio represents 8% of total assets under management as it played down concerns following this week’s selloff, while Carlyle said software accounted for 6% of its AUM.

Speaking at a conference last week before the sell-off took hold, Blackstone President and Chief Operating Officer Jon Gray said AI disruption risk was “top of the page” for his firm, which manages assets worth $1.27 trillion. He said the safest way to play the AI megatrend was investing in data centers and surrounding infrastructure.

Apollo declined to comment ahead of its quarterly results on Monday, while Blackstone and Blue Owl did not respond to Reuters’ requests for comment.

 

 

Posted in pensions | Tagged | Leave a comment

Rethinking the state pension – time to give people more control

Posted on March 9, 2026 by henry tapper

 

My old boss is asking a simple but deep question.

Rethinking the state pension – time to give people more control?

I guess that it’s an obvious question if you think people should have freedom with their pension.

Lawrence Churchill, ILC’s Chair of Trustees and former Chair of NEST poses the challenge: why have a single pension age at all?

Lawrence Churchill CBE

Lawrence Churchill CBE

Chairman at Clara-Pensions

Governments worldwide are struggling to balance affordability, sustainability and fairness in their state pension systems, as they were designed in an age when people died shortly after leaving work. This is no longer the case – yet the age at which it can be claimed has not kept pace with longer lives. In the 1960s people spent on average about 20% of their adult lives in retirement – now it is over 30%.

Almost every debate focuses on one question: what should the state pension age (SPA) be? The International Longevity Centre has suggested that, to keep the ratio of workers to non-workers stable in the UK, it would need to rise to 70 by 2040. Denmark has already legislated for this with their SPA rising from 67 today to 68 in 2030, 69 in 2035 and 70 in 2040. Critics, however, argue that many people simply cannot work that long because of poor health, disability or caring duties. These issues are real – and will only grow more pressing.

So perhaps we’re asking the wrong question. Why have a single pension age at all?

Instead, we could offer more choice within a national framework. Imagine replacing a fixed age with a personal “state pension pot” – the total value of someone’s entitlement from the current pension age to average life expectancy. Using today’s figures, that would be around £250,000. The Government Actuary’s Department could set rules on when payments can start, the maximum annual drawdown, and how it keeps pace with inflation. Within those limits, individuals could choose when and how to draw their pension.

If someone lives longer than average, payments would continue for life. If they die early – say, within five years – some of the balance could go to their estate. It would function with the freedom and choice of a personal pension but with the security and fairness of a state-backed system.

Such reform could relieve pressure on public finances while giving people greater control. Seeing a £250,000 fund feels very different from receiving £200 a week – it encourages people to think of their pension as an asset, not a handout.

Affordability could be built in. The size of the pot or withdrawal rates could flex with economic conditions – rising more slowly when growth is weak or borrowing costs are high. Those with serious health issues or caring responsibilities could still draw earlier, keeping the system fair and responsive to individual families’ needs.

Our parents and grandparents often retired with only a few years left to live. Today, someone turning 66 can expect another 20 years, most in good health.

But this is not only about finance. If people are to work longer, employers must adapt too. A voluntary “code for older workers” – similar to those that improved gender and ethnic diversity on company boards – could promote fair recruitment, retraining and workplace design. It would signal that longer working lives are both possible and valued. The Mayfield review on “Keep Britain Working” is already leading the way in this area.

We now have the data, technology and insight to design a more flexible, sustainable system for the future, rather than continue to overstretch a system designed for yesterday. The state should provide a strong foundation – but it need not dictate a single path for everyone.

It’s time to rethink the state pension: not as a rigid promise tied to one age, but as a flexible lifetime asset reflecting longer lives, economic reality and personal choice.

 

Lawrence Churchill CBE

Lawrence Churchill CBE

Posted in pensions | Tagged , | 3 Comments

A trip up north at a time of fear.

Posted on March 9, 2026 by henry tapper

Pensions UK conference is no Pension PlayPen coffee morning.

Six years ago we went to Edinburgh for the PLSA (as it was then) Investment Conference. We knew we were on the verge of something very bad (Covid) but we decided to go ahead. “We” being the vast majority of those who’d paid for three days of conference and the travel and accommodation that went with it.

We reckoned we were ok but on the final day I knew we wouldn’t be.  I had a meeting with Aegon after the Conference closed only it was Aegon that had closed with a confirmed case of Covid amongst its workers. We had no idea what this meant except danger haunted the City and I couldn’t get back to London quick enough, I never had that meeting.

Six years on there is another crisis haunting the Pensions UK  Investment Conference. What we supposed was another Venezuela looks more like Ukraine, only this time those suffering are not Ukrainian or Palestinian but Iranian.

But we can be sure to be discussing the war in term of its immediate impact on our economy.

Take the price of oil and what that means on other markets.

Instead of finding ways to stop the war immediately, the G7 is looking for ways to keep business as usual.

And there is the very pertinent question for those in investment, “who will pay the price of the war?”

Just as Covid was considered in business terms – six years ago – so will the Iranian war be considered this week. The considerations are investment not humanitarian.

That we are confused about why so much violence is being take out on Iranians, is secondary to the confusion this war creates on our portfolios of our varied assets.

So I will take a train up to Edinburgh along with many others , hoping to enjoy myself but knowing that I was nervous in the same way six years ago.

That nothing good has come out of the wars in Ukraine and Gaza is obvious. I cannot see anything good coming out of this war. We have had flexing of armed power from the US in my memory since Vietnam , through Afghanistan, Iraq and these most recent wars and the only takeaway I can see from them all is that they destroy commercial value and human happiness.

At the end of the Coffee Morning on Tuesday (Oliver Morley) we will pray for peace in Ukraine and Iraq. There are of course many wars we know little about that go unreported, but we focus on those that could impact us.

I hope that the Pensions UK investment conference prays for peace alongside the Pension PlayPen.

 

Posted in pensions | Tagged , , | Leave a comment

A Pensions Mutual for a CDC.

Posted on March 9, 2026 by henry tapper

It is good to launch a good news story and I can today. Last Monday, while talking “small pots” we got news from the FCA that the Pensions Mutual had been registered and sealed

 

What is the Pensions Mutual?

We have registered this society for employers who want to participate in a CDC scheme for which Pensions Mutual Limited will be the proprietor. As proprietor it will make sure that members introduced by the employers will have workplace pensions for the whole of lives. They will build up pensions when people work and pay a retirement income in later life.

The FCA explained the variety of Mutual we were after as like a dairy to which farmers bring milk. At the end of each year they will get a share of profits rebated to them for their co-operation. We see the management committee of Pensions Mutual as acting solely for members and their employers. This is in the long tradition of pensions and we hope that Pensions Mutual will be promoted by pension consultants and by trade unions together. We hope that large and small employers will want to participate and ultimately we want it to be owned by those who use it as well as those who fund it.

What is the CDC pension it intends to launch?

Last October the DWP launched in parliament that allows employers to participate in multi employer (UMES) CDC plans. Till then they could only set up a pension for themselves and only Royal Mail has done so.

We had been approached by employers who wanted to offer a better pension to their staff than they could using DC . They wanted to have  control of its delivery. The Pensions Mutual is the delivery mechanism and a better pension comes from the CDC pension that is delivered.

Details of the CDC pension are laid out in a simple way on our website

Press  to visit Pensions Mutual’s CDC Scheme

The Government launched this type of CDC as a way for any employer to improve the pensions it offers staff by up to 60%. Some , such as the PPI think it will be higher, others such as the LCP’s Sam Cobb argue lower and we say that the exact amount it improves will depend on what it’s measured against. But we think that it is better value for contributions if what people save for is a pension!

We share the view of Pensions UK and the Pensions Minister that we are saving for pensions and therefore a CDC should be an advancement which we hope is adopted in time by all DC saving schemes. We hope too that employers who would like to offer DB but can’t afford the risk of contributions going through the roof, will use  Pensions Mutual CDC scheme.

From discussions we have had with large employers and their unions we know there is a wish to progress pension provision. We know too that there are many smaller employers who have an aspiration to provide a pension with the VFM of a large one. We think that is a fundamental fairness that whether you work for an employer small or big, you are entitled to an equal pension , pound for pound contributed.

This does not of course , deny that our Pension Mutual may not build sections for certain employers who have strong beliefs or whose workforce are likely to have different retirements to the nation as a whole.

Fairness is critical and where “sharing” cannot be fair, we will consider sectionalising. But by “we” I do not mean a few cronies on an executive, I mean a management committee who guides Pensions Mutual.

We need to bring together young generations who can build the operations of the CDC to enjoy the best things of modern technology with old folk like me who have experience of pensions going back to the last century before the closure of much private sector pension accrual.

We need to tap into the great asset managers we have in Britain. We hear the Pensions Minister for active management to bring good governance and we would like Pensions Mutual to follow the successes that we have had and will have if we see through the principals of Mansion House. We strongly believe that pensions should encourage better management of our environment and society and we want our Pensions Mutual to appoint trustees of its pension scheme who understand good governances.

As we make appointments over the coming months, we hope you will see our commitment to doing the job well. We will by the end of July be in a position to approach the Pensions Regulator for authorisation. Within six months we hope to have not just a Pensions Mutual Society but a CDC scheme in place so employers can begin contributing for their staff.

There is nothing difficult about this for employers. They will simply have to comply with the auto-enrolment rules. There will be no demand to pay more than the basic amount.  We hope that many employers will choose to pay much more for the sake of staff’s welfare in older age.

If you would like to find out more or meet with us, you can make a request through the website. I will be in Edinburgh next week if you are too. I am having some drinks with some who have helped us get this on Monday night and if you are in the City on Monday night you can join us using this link.

Thanks for reading to the end.

 

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

“More than half of adults were using AI platforms for financial advice”

Posted on March 8, 2026 by henry tapper

A study of 5,000 Britons commissioned by Lloyds Banking Group late last year concluded that more than half of adults were using AI platforms for financial advice.

I am pleased to see our ace pension journalist n top form . Mary McDougall is treating us to a gem of an article, weeks before she takes maternity leave. I wish her well and recommend this article published March 7th, here on this free share.

Posted in pensions | 5 Comments

Samantha Gould – a cosmopolitan-glamorous guest for Nico and Darren

Posted on March 8, 2026 by henry tapper

Sam Gould is Nico and Darren’s guest this week and she turns up excited and genned up about how to behave. I’m pleased to see her thoughts and those of her companions are constrained to just over an hour!

Darren is running a session at the Raging Bull in Edinburgh on Tuesday and I’m sure it will be as outspoken as these podcasts have been of late.

I cannot say much about Sam’s pod other than listen to it if you are interested in how women can get a better financial deal.

I am not sure that this will be driven by auto-enrolment or NOW pensions but today being woman’s day, it is right to focus on Sam’s work and that of her employer.

I have to confess, there is no aspiration within me to be Cosmopolitan or glamorous. I do not pretend to be much interested in international women’s day but I am a fan of fairness and suspect that Sam is doing a good job.

I find it hard, despite having listened to all 63 minutes to understand how this can happen but I hope that she will be able to make her case to the Pensions Commission and the woman who is in charge of it. She is nobody’s fool.

It would seem that most things that Sam promotes end in a fine meal and festival and this seems a good way of living, so long as the dining is not at the expense of those who have too little.

I gave up alcohol 16 months ago so don’t do my celebrating in pubs and at awards ceremonies as they no longer have much attraction – poor that I am in health and in wealth.

But I’m delighted that Sam and Darren and Nico can celebrate properly and hope they had a virtual jar at the end of this podcast!

Samantha Gould

 

 

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

The Auld Alliance shows up boring England!

Posted on March 8, 2026 by henry tapper

 

I was with my mother yesterday so we watched the rugby. At 93 she has become a fan and after watching Scotland beat France 50-40 I could see why. I decided to stay for the second leg which was promoted by my family as “England beating Italy”.  I am in two minds about that game. Whoever is in charge of managing the England rugby team should be sacked, they have created out of brilliant players a boring team that is constrained by a style that was devised in a boardroom, not on a pitch.

But to happier things. The six countries battling it out to be the number one European team this year are down to two who can win it and while we’d have expected France to be one of them, who’d have thought Scotland will be the other. Next week will be spent in Scotland in its capital and I will be reminded that Steve Borthwick said that the other one would be England! England v France next week may decide the winner of the tournament but only if England beat France to give it to the jocks. I think that unlikely but it may be that England throw off their constraints and play a kind of ruby we expect!

I have had a little experience of the lifestyle of an England rugby having stayed a night in their HQ at Pennyhill Park. I was pampered beyond my due but only for a night, these rugby players stay there for ages and clearly the adulation that they get from the hotel has turned them into believing they are what they aren’t!

Their style of rugby is not enjoyable to watch and yesterday the joy was all with the Italian players and their crowd. I doubt that sitting on the sidelines under yellow cards is part of the management consultancy that governs the team’s behaviour. It is however indicative of the petulance of a team that has been led to believe that things should go there way.

The England team and its management should be given an intensive four hour session watching how they were beaten by Scotland and Italy and then another session watching how Scotland and France battled out a 90 point spectacular.

The conclusion will be that they are playing a game and not acting out a management consultant’s strategy. Pennyhill Park is a plush place but it has nothing to do with the roots of rugby union. Rugby Union in England is now owned by wealth managers who sponsor it and those who commentate on it with appalling seriousness!

By watching how they get beat and how other countries win and lose with joy, they may get back their sense of humour. As for Wales, they are going through a dreadful period which I suspect Ireland can remember a couple of decades ago. It is not something for them to be worried about because like Ireland, the roots of their game are still with players and clubs.

The moneymen have come and caused Wales a lot of trouble but I am sure they will recover as Ireland did.  But England’s problems are different. They are about attitude, contempt for the roots of the game and the loss of any sense of humour.

 

 

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