Just recovering from moving house, so therefore catching up
a bit with all that has been happening in the world of pensions.
(Incidentally, well done to all the various third parties, institutions
and providers –and especially the Post Office- for responding so well to our
house move. All except BT that is. Did you know you can’t order broadband if
there is no recognised house phone? Actually there is a house phone- but it’s
been offline with the house being empty. Anyway, BT rant over....)
The main pension move of course has bee CDC’s. Not new, but
a new energy for the idea post Queen’s Speech. And Steve Webb linking it to his
Defined Ambition project. Is it really DC+ (to use a Webb phrase)? Sort of.
Plus in terms of increased certainty by way of volume. Plus
in terms of lower costs, again due to volume. But not plus in terms of
additional guarantees. The pot can still go down as well as up. There’s no
protection even on pensions in payment.
I remember managing a Dutch CDC for a large international
company. The news was not good one year. There were going to have to be
reductions in pensions in payment. It was a hard one for the local Dutch
company to manage in terms of a news story that could get out to the press. No
one wants their pensioners to suffer. The US parent company didn't like it one
bit. How did we get to this, they were asking? It was a communications
nightmare.
What looks good on paper and works logically for pension professionals is still hard to explain to a member. Especially a pensioner who’s
just found out they are getting less in their bank account each week.
Nevertheless, I think it’s a good step forward so long as we
can manage the message with the members.
