Muddleware

Now why didn't I think of that?! Well done to Andrew Cheseldene for coining a new word in his Pensions World article.

And an appropriate word too.

Preparing for Auto-Enrolment is complicated. The various eligibility criteria see to that. And payroll providers were very slow to come up with integrated solutions. To my (slightly cynical) mind, this was because they wanted their clients to come to them and ask for the solution. The payroll provider could then charge for their solution rather than preparing a generic answer for all clients at their own cost.

That aside, I do think that the payroll provider will be the best route for most companies. Consultants have got in on the act, (initially, I think, because of the slowness of payroll providers to help), offering 'middleware'. But as Andrew points out, this can actually be 'muddleware' at best. And expensive muddleware at that!

Better to batter down the door of the payroll provider than go for expensive solutions that may well be inferior to an integrated payroll solution.

The Pendulum Swings

It wasn't long ago that pretty much every in-house pension team you could think of was either moving to outside consultants or at least going as far as a tender for the business. And that included a number of in-house investment teams being disbanded.

As highlighted in Pensions Week, it looks like the pendulum may be swinging the other way again. Tesco and British Coal have both moved back to in-house investment teams, and in Tesco’s case, they went further in choosing to ignore the contradictory advice of their consultants.

Admittedly, with Tesco and British Coal, we are talking about two of the biggest pension funds in the country, but I predict more will follow their lead, for two reasons. Firstly, the blurring of investment advice with investment management. Consultants in some cases are trying to have their cake and eat it. And it’s pretty obvious that’s what they are doing.

Secondly, systems are far more superior nowadays. Even over the last five years, the sophistication of the IT systems behind the trades and the software used to measure and present investments have all improved exponentially.  It’s just easier to manage.

Look for the next lot of headlines. They won’t be far away.

I Need A Picture, Any Picture....

DAY ONE:

Correspondent: ‘Hello. Is that the Incisive Media graphics department?’

Graphics Department: ‘Yea.’

C: ‘Oh. Well. Erm, a bit of a rush job. You see I have to fill two pages of the next issue of Professional Pensions, but, well, the article is only a page at the most.’

GD: ‘Yea.’

C: ‘It’s a feature. You know. One of the bits we try and fill the magazine with. When we’re a bit short of news.’

GD: ‘Yea.’

C: So, can you help? I need a couple of big pictures to fill the gaps. Kind of half a page each.’

GD: ‘Yea.’

C: ‘Great. The article is on where multi-asset managers invest. So there is reference to US treasury bonds. And to emerging economies. Does that help?’

GD: ‘Yea.’

C: ‘Great. But try not to just use pretty pictures. OK?’

GD: ‘Oh.’

C: ‘I mean, avoid the Taj Mahal when you’re portraying an emerging economy. You’ve done that quite a bit.’

GD: ‘Avoid the Taj Mahal pictures. Erm. Okay. That was what I was thinking though.’

C: Well think again. We go to press tonight so I will have to trust you….’

DAY TWO

C: ‘Hello, graphics department?’

GD: ‘Yea.’

C: ‘I thought we agreed to no pretty pictures? But for the US government bonds section, you’ve used the US treasury building.’

GD: ‘Yea.’

C: ‘And for the emerging economy picture, you’ve used the Golden Temple.’

GD: ‘It’s not the Taj Mahal.’

C: ‘Well at least the article is buried in the middle of the magazine. No one will notice the awfully trite pictures.

GD: ‘Oh dear.’

C: ‘What?’

GD: ‘Er. Well…. We copied the Golden Temple onto the front cover as well…’

C: *Sigh*. ‘No one will notice….’

The Corporate Version of Caring for Your Parents

As you get older and your parents get frail, there comes a point when you have to decide how to care for them. If it’s a decision to put them in a care home, the costs have to be found. Often that will be through selling their home. And remember, it’s often your childhood home too. Sad that their care requires the sale of something with such precious memories.

When Defined Benefit plans were ‘invented’, they were affordable. A combination of longevity, market changes and strict accounting practices means that this is no longer the case. So what to do? The promises have been made. You need to care for those where a pension has been promised. So sometimes, you have to sell what is precious to you.

That’s what has happened this week with the Royal Geographical Society. In order to fund the pension promises, they are selling some of their precious artwork. Paintings that have been in their collection for over a century.

Sad that promises made require the sale of something so precious and irreplaceable. Witness the corporate equivalent of selling the parental home. But the ongoing care of the elderly has to be more important than even the most beautiful of paintings. Or houses for that matter. Or businesses too?.....