From might to misery in a decade; Cumbo reminds us of BSPS and of those it should have looked after.

Posted on April 4, 2026 by henry tapper

 

I am pleased that Jo Cumbo retains her passionate interest in what happened here.

Here is Jo in Port Talbot, the gentleman she is pictured with is no more.

 

There is a finite span of ageing steelworker’s lives.  There is a scandal surrounding transfers and there is a scandal surrounding the Scheme’s inability to treat its members with respect.

What is missing for these Scunthorpe steelworkers was their increases on their pensions.This phot is ten years old but it was only a couple of days ago the door slammed shot on missing increases getting paid as the British Steel Pension Scheme was bought out by Legal and General.

Whichever way it’s looked at , the once mighty British Steel Pension Fund has progressed from might to misery in a decade.

It involves inept regulation from both TPR and FCA, a failure to use TPR to protect members when 85% of those who transferred should have stayed.

In August 2017, the Pensions Regulator agreed the key terms of a proposal from Tata Steel UK to restructure the BSPS through a Regulated Apportionment Arrangement. Such an arrangement allows a company to end its responsibility for a pension scheme, with the Pension Regulator’s approval, if continuing to support the scheme meant the company would inevitably become insolvent.

That involved the deeply troubling involvement of  a former senior TPR executive in the establishment of the RAA. Had the RAA not have been pushed through , BSPS would have sat within the PPF until the capacity of Tata had become clear,

The RAA into BSPS 2 opened the door to the snake oil salesmen that the FCA had no control of , to do their worst. Steelworkers were asked to take decisions that they had no capacity to take. The questions that were asked of them – to choose between joining the PPF – going into BSPS or taking a transfer value paid into a personal pension, was way too hard.

The advisers who suggested that members would know what was best for them have never been called to account for appointing a corporate IFA to provide support, an IFA that has since been closed down itself

In short, the BSPS tale is a tale that needs a journalist as good as Josephine Cumbo to make sense of what happened and see the complex failures for more than the sensationalism of the “chicken and chips” sales tactics of the most notorious transfer salesmen.

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The sun arrived for us in Perthshire

Posted on April 3, 2026 by henry tapper

It’s been a week since I could say that but yesterday morning the sun blessed mid Perthshire with its rays! What a sight at every turn!

These are four sights on my walk towards the sleeping giant! Trace the skyline of the mountain to trace the giant asleep!

Once you’ve seen the giant’s outline, you will always see it!

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“Pensions aren’t for the real world” – says a recruiter. “Yes they are!” says Terry!

Posted on April 3, 2026 by henry tapper

Terry Pullinger

I had a conversation yesterday evening with a recruiter whose job it is to get big projects done by people who build houses. We talked about what made a job attractive to working people in his sector. He talked of pay so I suggested that some of that pay might be “deferred” so that when the builder was knackered, he or she could rely on income from a pension.

The recruiter told me to “get real”,

“Pensions aren’t for those who take up jobs I offer.  They’re for wealthy folks like you”

This is the challenge that pension schemes face. Right now, for a great many people, a pension is a deduction from their payslip and a statement (once a year if the letter gets through). It is most certainly not deferred pay, though many people think that having a pension will make things alright later on.

I have to admit to have been taken aback. He went to accuse me of living in a glass-house without any knowledge of ordinary people or what goes on in their lives.

I take this as a challenge for me. Over the next few weeks, I and some friends including Terry Pullinger and Alan Higham will be talking with officers of Unison, Unite and Prospect about how to reintroduce the idea of “deferred pay” to workplace “pensions”.

It is hard for me to counter the criticism the recruiter had of me when he said that workplace pensions were just for those wealthy enough not to have to work. He went on about the people that he places who have no such prospect and will rely on the state when they can no longer work.

Whether he thought this fair, I didn’t ask. I was considering of talking to him of converting pots to pensions but thought it fruitless to argue the toss. I thank him nonetheless. He has thrown down the challenge to me and Alan and Terry and I cannot say there is an answer as simple as moving from DC to CDC.

There needs to be a fundamental shift in how we get paid so that in future we put aside more of our pay for the future, so that we get pay in later life that together with the state pension can allow us a reasonably comfortable lifestyle.

I think that moving to a system that pays people a deferred wage rather than a pot is a good first step, but it is not the complete answer. People will need to accept less today for more tomorrow and employers must make it clear that the pay for the job on offer is more than the cash in hand.

If we cannot move to a point where those recruiting staff advertise the work pension, then people will continue to consider “pensions” as a mystery they’ll discover when they’re too old to work. That is not a good plan. The pensions dashboard will explode many people’s hope that they are on track, some will give up but others will look to their employers for help.

Whether it is the unions, employers , Government or the pensions industry, there must be begun, a campaign for pensions to be considered a part of pay, the part that comes later which provides a really valuable wage in later age.

Terry Pullinger is the only person I know who has perfected this message and those who have heard him will know that the message is powerful and immediately relevant to those at work.

An Easter footnote

Today is Good Friday and I wish you the compassion for others. It’s the day that a man laid down his life so that things might be better.  That’s the message that Easter’s brutal Friday brings. Last night was like the last supper ,  I was challenged and was shocked as the disciples were.

It started badly on Thursday , got worse on Friday but ended well on Easter Monday . I wish you the joy that is to come , only a long weekend away. 

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What can C-Suite can do for your DB scheme? An advert from William McGrath

Posted on April 3, 2026 by henry tapper

A Risk-Benefit analysis for sponsors and trustees is needed to make good quality, informed decisions.  Perhaps the time has come for sponsors and trustees to be more activist.  Don’t wait to be told.  Do the work yourself and scrutinise the maths behind your actuaries’ work for Technical Actuarial Standard 300 V2.1 P5.  Strategies will change.

The Risk-Benefit analysis will help address:

–        What is the probability of a pension not being paid after a Section 75 claim is made on the sponsor?

–        What would the member lose if the scheme joined the Pension Protection Fund (PPF)?

–        What is the scope for discretionary payments to be made:

o   To offset downside risks?

o   Cover inflation levels?

o   Improve overall payments?

Recent Government action on surpluses, PPF cover and Authorised Payments making one-off discretionary payments easier has changed materially the calculations.  Now is the time to reassess.

C-Suite’s modelling of “Step Up / At Risk” directly addresses topics actuarial consultants have yet to grip.  Our interactive Value Share model takes the sector into largely uncharted territory.

When you have your own risk-benefit analysis, perhaps then ask yourselves:

  • Scrutiny of actuarial work:  Why is it still so lacking given that the tone of 3 major reports is so scathing (See attached “Ignoring Penrose, Morris and Kingman was a mistake”)
  • Who has made all the money out of pension risk transfer deals and why are there not any meaningful disclosures?
  • Why is PRA showing concern about the growth of funded reinsurance after Solvency UK was introduced.  Is it linked to the very profitable longevity risk transfer market?
  • How did Stagecoach trustees reach a deal so vastly better for members than others have achieved?  An alarm bell for trustees?
  • Can DB be a big boost for members, sponsors and the economy enabling all stakeholders to enjoy the benefit of a bounce back from excessive derisking.

William would be very pleased to discuss C-Suite’s innovative modelling approach and how it might help inform decisions for your pension scheme.

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Informed decisions on DB strategies – William McGrath

Posted on April 3, 2026 by henry tapper

This blog is written by William McGrath and sets out his view of how we can manage DB pension schemes in the private sector. I do not take the private sector to include LGPS or the unfunded pensions that are threatened by recent statements by Reform. William’s background in on this link.

William McGrath

That Baroness Sherlock emphasised it was for trustees to provide leadership and make “Informed Decisions” was positive.  She was responding to Baroness Altmann’s amendments to the Pension Schemes Bill.  Better coordination between regulators as also promised (see attached summary).  We have been supporting Baroness Altmann’s efforts to add to scrutiny of actuarial work.

The underlying need now is for clear risk-benefit analysis from a member and sponsor perspective.  We think “Informed Decisions” links well to actuarial work to implement Technical Actuarial Standard 300 V2.1 P5.  Below is a short summary of what could be taken as necessary for trustees to reach “Informed Decisions”.

The major area unaddressed in documents from consultants and providers covering run-on v buyout options is how much of pension liabilities is now covered by the PPF.  This should be modelled.  The answer needs to be set against the industry promoted idea of a “Gold Standard” which has lost carats.  Factors to consider are the eased solvency requirements of life insurers and reinsurers and the drive to invest in global private debt.  The lack of Government guarantee is always glossed over.

Also linked  at the bottom of this blog are some related notes on the growth agenda and the benefits for boards taking a fresh look at their DB pension scheme.

 

Some considerations

Here are some considerations for trustees making “Informed Decisions” which may not be standardly addressed:

Defined Benefit Pension Schemes : Trustees to have Government backing to make “Informed Decisions” on strategy

  • Ask for the Technical Actuarial Standard 300 V2.1 comparison of bulk transfers and Credible Alternatives led by “run-on”.  It’s a regulatory “must” since April 2024 for actuaries to produce the comparison and to make it available to intended users.
  • PPF is an excellent, well funded insurance safety net.  Know the proportion of liabilities it covers should the sponsor fail immediately or at points in the future.  What is the probability (1) of that happening; (2) of that happening when the scheme is not self funded to buyout levels.  This topic is missing from most standard analyses.
  • Actuarial work lacking scrutiny is a well known problem.  Demographic assumptions are a good example.  The actuarial profession’s in-house life expectancy tables (CMI) are industry standard in assessing risk transfers.  Trustees should know that nearly all deals over the last 15 years are “out of the money” and schemes doing nothing have gained substantially.  Trustees should be aware that CMI tables are produced by committees featuring current senior executives of insurers and reinsurers.
  • Know the “balance of powers” within the scheme rules.  Likely trustees set the investment strategy and sponsors can wind up the scheme.  The “upside and veto” combination of stakeholders is a good back cloth for value sharing agreements.
  • Tax rule changes make Authorised Payments a practical and attractive use of surpluses.  Model a stream of payments (working well within guardrails) made from surpluses generated by returns above the discount rate and by prudence emerging in the demographic assumptions.  Then you have a base case proposition for all stakeholders to consider.
  • Schemes individually should look at their track record and the scheme’s funding position and the sponsor’s strengths, its interests and its ESG strategy.  Then trustees can best assess what is in the best financial and wider interests of members.

There is more literature appearing on run-on and bulk transfer decisions.  Is there a risk of disinformation?  Who inspects the documents amongst regulators?

We are part of an industry group The Pensions and Growth Alliance.  It sees the implementation of FRC’s Technical Actuarial Standard 300 V2.1 as being of real importance.  TAS300 raises relevant maths and governance questions which trustees need the answers to in order to meet their fiduciary duties.  Baroness Altmann in her remarks in the House of Lords raised the importance compliance by actuaries with FRC regulations and that there should be more scrutiny of actuarial work.

If more schemes are minded to run-on they can reasonably expect Government to respond.  Government can look again at the remaining limitations on PPF cover; the tax incentives to invest in UK productive assets and tax rates on surpluses recycled to support current pensions.

Three short articles to download

Ensuring Trustee Accountability in Pension Surplus Distribution: Debate on Amendment 13

A debate in the House of Lords led by Ros Altmann

Optimizing UK Defined Benefit Pension Strategies for Economic Growth

Explores DB pension risk-benefit analysis, regulatory impacts, value sharing, and investment strategies to boost UK economic growth and shareholder value.

Optimizing UK Defined Benefit Pension Strategies for Economic Growth

Explores DB pension risk-benefit analysis, regulatory impacts, value sharing, and investment strategies to boost UK economic growth and shareholder value.

 

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Prospect Union on Reform’s plans for public sector “pensions”.

Posted on April 2, 2026 by henry tapper
Prospect is a progressive union when it comes to pensions and I’m pleased they’ve sent me their reaction to Reform’s plan to convert public sector pensions to  funded DC pots for those joining in the future If I were a member of Prospect, I would be clapping my hands in applause of its union.

 

Reform public sector pensions plans are economically incoherent

Mike Clancy, General Secretary of Prospect, responding to Reform’s announcement on pensions and closing public sector DB schemes, said:

“Reform’s plan for public sector pension is economically incoherent and would end up costing taxpayers tens of billions of pounds in the years to come, blowing a gaping hole in all of their spending promises, and casting doubt on their ability to honour their pledge on the triple lock.

“Public servants are not punchbags for Reform politicians, and their pension pots are not piggybanks that can be raided. This is yet another example of Reform’s war on working people, with people’s pensions and rights at work at risk from their anti-worker policy agenda.

“The Office for Budget Responsibility has been clear that public sector pensions are not a risk to our fiscal sustainability, the real risk would be a Reform government with no understanding of how the public finances work.”

Prospect take the time to tell their members what Reform is up to…

Public Sector Defined Benefit (DB) schemes vs notional Defined Contribution (DC) schemes

Public sector DB schemes are unfunded. That means today’s contributions pay for today’s pensions. The full cost of paying for current pensions is carried on the Treasury’s balance sheet. Even if a new DC scheme is introduced. those payments will be made.

Member contributions as well as employer contributions to public sector DB schemes go straight into the Treasury pot and register on the balance sheet. Moving to DC would mean a loss to the Treasury of all those member contributions.

Under a DC scheme, payments today pay for the pension which will be ultimately drawn in future. These payments must also be costed by the OBR. So the public finances would be paying for all of: DB pension payouts, DB member contributions, DC employer contributions.

This represents an additional cost to the public finances of: Current DB member contributions plus DC employer contributions.

  • Ballpark average of public sector DB scheme member contribution rate – 8% = £14bn annually
  • DC employer contributions based on reasonable private sector comparator – 10% = £18bn
  • DC employer contributions based on median private sector rate (we take this as the floor) – 4% = £7bn
  • Total increased cost to public purse: £22-£32bn annually
  • Reform plan to transition people onto a new pension system. Assuming that 20% of public servants transition in the first time, that would result in a fiscal hole of between £4.4 -£6.4bn by the end of their first term, with costs continuing to rise every year after that.

(All stats use total central government pay bill in RDEL (Source: HMT PESA, Table 2.1) of £198.538bn in 2025-26 and assume this includes approximate average unpensionable employer NICs of around 10%)

In November 2025 Prospect wrote to Richard Tice explaining the problems with the policy 

Cost of current DB schemes as a percentage of

The latest OBR long-term projections are from 2024.

 

  2023-24 2028-29 2033-34 2043-44 2053-54 2063-64 2073-74
Cost as a %age of GDP  

1.9

  

1.9

  

1.8

  

1.5

  

1.4

  

1.4

  

1.4

They are available from: CP 1142 – Office for Budget Responsibility Fiscal risks and sustainability

Table  4.3 – ‘public service pensions’ figures.

About Prospect

Prospect, the union for ambition, represents 160,000 members in the public and private sectors. Prospect members work as curators, educators, engineers, scientists, managers and specialists in areas as diverse as agriculture, regulation, communications, defence, entertainment, energy, environment, heritage, industry, media and transport.
I support Prospect in spelling out that turning unfunded but tax-payer backed pensions into funded DC plans is a very bad idea. Not only would it make the next generation of public sector pensioners the poorer in later life, it would hurt the Treasury in delivering money inefficiently..
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Hutton and Lyons as one on an investment opportunity in Britain

Posted on April 2, 2026 by henry tapper

I am very pleased to read of this from two friends – Will Hutton and Nick Lyons


Congratulations to the team at British Growth Partnership and BBB. But it is also a reminder that supply of long term patient capital still lags hugely the demand from great British businesses who remain dependent on overseas capital for so much of their accelerator capital.

The Mansion House Compact was a powerful and important statement of intent by 11 pension managers representing two thirds of the DC market. But implementation has been frustratingly slow. We must move further and faster and find vehicles through which to enable this capital to flow to the best returns.

British Growth Partnership and Future Growth Capital, a jv between Schroders and Standard Life (declaration of interest: I chair SL) are two that have set out their stall but we need to have a clear roadmap about how others will deploy too. And we really need to accelerate…….

While we have been admiring the problem, the European Investment Fund has launched a €15 billion fund of funds to back growth stage companies including an ambitious European Tech Champions Initiative. This looks remarkably similar to the Future Growth Fund I proposed as Lord Mayor which I couldn’t get the MHC signatories to support and about which I was extensively quizzed by European ambassadors 🤔

Don’t get me wrong, I support all European tech and life science growth companies getting access to local funding and European pensioners having a chance to participate in those returns…….but this looks remarkably like someone eating our lunch. Otherwise we are just going to carry on watching great British companies make the inevitable choice: that they must follow the money and, in doing so, enrich the pensioners of North America and Australia.

Paul Hume , a retired civil servant had this to say. I agree with him as much as I’m sure Hutton and Lyons will.

It’s striking that as a collective, these vehicles still only control around £9bn — a tiny fraction of what’s needed if we’re serious about building a domestic growth engine. But there’s a deeper issue here. If we want long‑term, compounding returns, the most reliable investment the UK could make is reducing deprivation.

You can read a report on BBB’s position here

Will Hutton
Nick Lyons
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A grey day is brightened by water and spring’s flowers!

Posted on April 2, 2026 by henry tapper

I felt as Wordsworth may have felt , coming across a host of flowers tossing their heads to each other and to me – in a distant corner of Rannoch. I took a few home to show to my brothers and the dog, they weren’t excited – maybe you’ll see my point when you see the walk I had!

Up on the hill , as they modestly call this mountain, I walked. I was – like Wordsworth- alone as I ascended.

Lonely as I reached the heights

Wishing that I had as companions the two larks that we’d seen outside our window as we ate lunch on the links of St Andrews earlier in the week. Thanks to Derick for the sight of their ascension!

Descending to the sight of a chair loaded with twigs, the work of villagers of Kinloch Rannoch, expecting a dry day to light a fire.

It was not a dry day but there was power from the rain and snow which has been insistent since my arrival last week. My walk finished at the point where the might of Rannoch and the streams from higher lochs could be tapped to keep this part of Scotland powered.

There is a crisis of power from fossil fuels because of the folly in the Middle East. But I was comforted that the brightness of daffodils cannot be dimmed nor the power of the lochs and rivers be turned off by other people’s wars.

 

 

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Opperman – a good egg – Robert Cochran’s interview a winner!

Posted on April 2, 2026 by henry tapper

Robert Cochran has consistently banged the drum for workplace pensions and he’s been a supporter for all that Guy Opperman held dear when it come to saving and engaging Scottish Widows with their pension. If you have some time and can plug into his pod it can be reached from this linked in post.

Opperman has not tied himself as Steve Webb did to a single organisation. I am sure that Scottish Widows would benefit for employing Opperman as Royal London benefited from Webb.

Instead Opperman has built a portfolio of customers including firms in the UK , the Middle East and in extremity – South Africa. He has been on tours to Australia and spoken alongside pensions dignitaries around the globe. Generally he makes sense.

In this pod he looks back nostalgically at his time as pensions minister and is particularly interesting as he talks his way through the slow disintegration of his party in Government. He is touching as he explains how he got his pensions legislation through despite the indignities meated out to him by Boris Johnson and Liz Truss. Rishi Sunak comes out well in this (I know he had a strong relationship with the then DWP SOS, now shadow Chancellor- Mel Stride.

He is kind to the Labour Government’s pension team who he sees as seeing through Pension Superfunds and CDC which he sees himself as initiating. I suspect there is something of a rewrite here, but let it be, he was an early adopter of ideas which may be coming to fruition this decade.

Less successful may have been the attempts to make workplace pensions fill the gap left by the demise of SERPS on one side and private DB pensions on the other. The harsh reality is that his first challenge was to implement the 2017 auto-enrolment enhancements to contributions. He did not get them ( he says because of the Treasury and he blames the Treasury for failure to fulfil a promise made nearly 10 years ago. Will it make the cut-out of 2030 and change of Government, Opperman doesn’t think so.

Opperman wasn’t universally liked within his own department and certainly not by Steve Webb. It is hard not to like him out of Government just for his good humour and Harrovian good manners. I’ve had good conversations with him over the years and thoroughly enjoyed his podcast. Robert Cochran is his kind of man and Guy Opperman is a man’s man. All the same, he lacked clout in Government and in that he’s been bettered by Torsten Bell.

Whatever we got from Guy Opperman, is secondary to what we’re getting from the soon to be Pension Schemes Act. But GO’s Pensions Act sent us towards a consolidated private system which we might yet get!

He lent the job of Pensions Minister a fresh exuberance we have not seen since!

Opperman’s exuberant style

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Will pension administration cope with the challenge of CDC by 2030?

Posted on April 2, 2026 by henry tapper

As part of the work we have been doing set up Pensions Mutual and a CDC to provide workplace pensions from the start of 2027, we have been looking at how pension administration looks in the UK.

We started looking at pure systems providers , Lumera and Festina are overseas players who have credentials from delivering CDC in the Netherlands and variants up and down Europe’s West Coast from Scandinavia down. My impression is that they are focussing on DC and DB administration.

We are intrigued by niche players such as Spence’s Mantel supplier which brings us homegrown software that is already in place in integrated administrators such as GPA and Barnett Waddingham but much of what we see from the consultants still looks to be adaptations of historic systems such as Profundi. Aptia alone is advertising itself as a CDC administrator offering.

I suspect that most of the work being carried out at the large consultants – Mercer, Aon and WTW will focus on delivering Retirement CDC from 2028 onwards and that this will not be an accumulation product. Whether the existing DC and DB services will be adapted to deliver UMES whole life workplace CDC schemes remains to be seen.

It’s a time of change, not least in pension admin management. What was JLT/Mercer admin has been bought out by Bain and re-established as Apria, WTW has a new bos

Aon is keeping quiet but is widely reckoned to be launching its own CDC UMES workplace pension plan which would sit alongside its workplace DC master trust.

That leaves a few slightly smaller integrated administrators who must be considering whether to deliver CDC to rival DC as a workplace pension. Isio have recently brought into the fold Premier Pensions and found a new head of admin , Hymans have recently sold its non core business to Howden while XPS must have a gaping hole to fill having recently lost a big client.

This is all headline stuff!

What of AI?

Into the miasma of pension administration comes AI that is bound to make a stink over the next five years as manual processes get replaced by processes driven by artificial intelligence). The outcomes are still focussed on humans but getting there will need less humans and will be more reliant on what has been learned from systems of the past.

Every conversation we have with pension administration offers us a new take on how systems providers and administrators are coping with the challenge of being de-humanised and I would not be surprised if the first robo- administrator follows the first robo-taxi into production by the end of the decade. If I can put my getting around town into the hands of AI , I can put my saving for and paying of my retirement income.

I discovered the other day just how distant my life had become from paying in cheques. This was a wake up to me that I now expect things to happen without human interaction.

How close are we to administering workplace CDC?

CDC collects contributions like AE workplace DC pensions do. But it pays  the build up  of pensions as a DB scheme. The tricky bit is the allocation of pension entitlement to those saving for retirement and this will with UMES be based on dynamic pricing which buys entitlement with each new contribution but can increase (or decrease) the value of each pension entitlement according to the state of the fund and of expected future liabilities (pensions).

The system of pricing, valuations and display of pension due (on the dashboard and conventionally) has yet to be cracked by any administrator we have talked to and it looks to me that actuaries, administrators and investment fund managers need to be integrating their offering digitally and not relying on human fallibility! We are looking at the perfection of digital solutions and procuring the means to get it will be a big task for proprietors of CDC schemes – together with their scheme executives and trustees.

We do not want to build in the dark , we will build by corresponding with TPR, Church of England and any other UMES CDC players who appear in the next few months. Administration is one of the big challenges with getting CDC pensions going in the workplace! We cannot replicate Royal Mail though we bless them for opening the door for the next wave of innovation!

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