The Left Hand Doesn’t Know What the Right Hand is Doing

This is an oft-used idiom with a Biblical foundation (‘But when you give to the needy, do not let your left hand know what your right hand is doing’: Matthew 6:3). In its original context, it’s used positively. But we’re talking  pensions here and I want to use it negatively!

Professional Pensions writes about the decision to have a number of different organisations dealing with pensions guidance. There’s TPAS, the Money Advice Service, a new offshoot of TPAS and a new directly controlled Treasury operation.

Three organisations and four delivery mechanisms.

Back to the quote. On the basis that there will not be enough resource put in place, how long before chaos ensues?!

Faceless Corporates or a Real Pension Plan?

The latest pontifications from the Pensions Regulator encourages employers to consider moving away from small-scale schemes on the basis that they are less likely to deliver good member outcomes. This is too broad a generalisation. Many (most?) small schemes are run well. They often have the touch and feel of the company to which they belong. They have been nurtured and promoted by local management and relate to the company, carrying something of the company ethos.

So to say ‘move to NEST or NOW or the L&G’ etc (which is what the Pension Regulator seems to imply) is effectively saying to the employer ‘wash your hands of your own scheme’ and let some faceless corporate entity take over.

A move may make some cost savings and reduce investment charges, but at what cost to genuine buy-in from the employees?

Small details – Big concern

One of the more outspoken debates on Pensionweb has been with regard to the Pension Regulator recommending 100% accuracy in data for everything post June 2010.

As one of the pension managers says, with their regular interaction with HR, payroll, different company divisions etc, it will never be possible have 100% accuracy on common data such as addresses.  One of the other Pensionweb correspondents suggested that a way out may be to put the company office address where one is missing. And another suggested simply accepting it will never be 100% as constantly chasing deferred pensioners for new addresses is not worth the administrative expense.

The section in the ‘record keeping’ section on the Regulator’s site says this:

“14. The targets for the standard of common data we recommend is achieved by December 2012 are:

• For new data created after June 2010 – 100%
• For legacy data (created before June 2010) – 95%; this lower level is in recognition that many schemes will have greater difficulties with older data and may inherit problems from previous trustees, managers or administrators.”

An unreasonable target? Definitely. For any largish scheme, data changes every day. Yes, I guess you could cheat the system by putting in a temporary address, but better the Regulator understood the issue and stated up front that he was aware that the 100% would not be achieved. Better still, give a few percent leeway, as he has done with legacy data.

A small point. But not a small issue. If the Regulator wants to work with the industry, he needs to be careful how he speaks.