The Video Clip Every Boss Should Watch

This blog is mainly about pensions and communicating pensions. It's usually a short piece with a few links for the more interested. It's short because we don't have the patience to read or listen- especially if we are accessing this at work.

So this is different. It's a 15 minute video from Simon Sinek and it relates to  hiring 'Millennials' - ie those born in 1984 and later.

There is so much sense in what he says. If you're an employer, a department boss, you work in recruitment, or in HR, I recommend you take the time to view it. I appreciate it's longer than something you'd normally watch in work time, but you will be rewarded with some excellent insights. Enjoy.

 

The Barrier of Words

As passionate pensions people we want to communicate well. We want people to understand their pension and appreciate its value. But we are often stopped from communicating well by our own blind spots. In fact our words can be a barrier to getting the message across.

The Technical Barrier

Too often we assume we are being clear with our pension communications when it is nothing but gobbledygook to the recipient. We are so wrapped up in the industry we work in, we are not aware of the pension jargon we are using. Glossaries help, but better to write plainly and assume the reader knows nothing about the subject. If you talk about ‘hedging’ your investments, people are likely to be thinking of a green bush in the garden. If you speak of commutation, people will think you are talking about travelling to work…. You get the picture!

The Cultural Barrier

This is a more subtle communication issue. Not all companies are the same. Many may be UK companies and have a certain style of communicating. Others may be US companies- generally the business language is sharper and more to the point.

I work part time for a community based charity. Here the language is very different to anything I have experienced in the commercial world. You can’t just dive in to the issue you want to email on, for example. There has to be a bit of a ‘how are you’ and a conversation would typically end with ‘blessings’ rather than ‘cheers’ or ‘yours sincerely.’

So when you’re speaking about pensions – typically a ‘foreign language’ to any organisation, it’s important to first asses the culture of the company you are working with.

The Functional Barrier

As an occasional consultant for Pension Geeks, it’s interesting pitching business. No matter what the potential client may say, you are being assessed against the incumbent communications company. And, sometimes without the client being aware of it, they are expecting you to be the same, and possibly to charge the same. (As we’re smaller with fewer overheads, the fees are usually a good conversation to have).

That same functional barrier can work in presenting pensions to a non-specialist audience. They have an expectation that they won’t understand it, sadly based on earlier pension events or (often inaccurate) articles they have read in the press.

Words can be a barrier. And there’s the challenge!

Translating Pensions

Well done to Louise Farrand of Pensions Insight for her blog on pension phrases she would ban. I agree ‘On-Boarding’ is not a verb and never should be!

It got me thinking…..

How do non-pension people understand the jargon we throw at them? Maybe they don’t.

Here’s my own selection of pension phrases that may have very different meanings for the population at large. There’s a few you may have to think about first. Any more suggestions?


Abatement – A posh flat

Accrual – The opposite of kind

Actuaries - Flying performers

Amortisation – French for love on a train

Blended – A milk shake

Commutation – Travelling to work

Concurrency – A payment method using large shells

Discontinuance Basis – How shops sell end of line products

Fiduciary – Fido’s friend sees Harry (think about it….)

Glide path – Slipping over on a night out with the lads

Longevity Swap – Exchanging time share apartments

Middleware – Clothes worn in Lord of the Rings

Mortality Drag – Dangerous car racing

Offsetting – Losing at tennis

Pre-Crystallisation – Going into a jewellers shop

QROPS – Wheat

Tactical Asset Allocation – Winning on a games show

Targeted Return – Winning on a games show

Time Weighted Return – Getting fat

Wrap – From Pret

Yield – Wrestling manoeuvre

Zombie Fund – Clothes purchased for Emo wardrobe

Ten Pension Predictions for 2015

1.       A lack of clear and detailed regulation relating to the new pension freedoms.

As April draws near, many will be shouting loudly for clarity on detail, but it won’t arrive. Political parties will be in election mode and the April ‘new start’ will be hindered by poorly thought out regulation.

2.       Increasing pension scams.

Inevitable with the new pension freedoms. And frequent too, until the new systems get bedded in and the new government knows what to do.

3.       Appalling pension headlines.

Probably led by the Daily Mail as usual. People defrauded of pensions. People confused by the new freedoms. Anything to sell a paper.

4.       Quiet success with new products offering good customer value.

Probably won’t make the Daily Mail, but many providers will successfully navigate the new legislation and come up with quality, innovative products at a reasonable cost.

5.       New quality systems.

This has been ongoing since auto-enrolment was announced, but providers are making good strides with new data management tools integrated to pension provision. Again, unlikely to trouble the Daily Mail headline makers.

6.       Covenant worries.

No predictions here on a Russia collapse, Islamic militants and all the rest, but whatever happens in the world affects investments. And with that in mind, trustee covenant concerns regarding the remaining DB plans will increase.

7.       Adverts relating to not cashing in your pension.

As the new freedoms kick in, how long before we see adverts and articles relating to the need to think before you spend?  In Australia (a country we seem to be mimicking re pensions) it’s called ‘double dipping’ - people who spend their pension and then live off the Sate.

8.       Strengthened DC governance.

Whatever government is in power, I expect some firmer legislation around DC governance and management, akin to trustee governance.

9.       Pension Apps that work.

With a continued move to everything being in front of you on a smart phone, pension apps will come of age.

10.   Closure of small and medium pension schemes.

Whether DB or DC, there will be closures, mergers and buy-outs of smaller schemes, as the new legislation and auto-enrolment continue to change the landscape.

Seeing Red - The New AHC

I’ve got a soft spot for pensions communication company AHC. Not least because I used to work for them.

So their new web site and relaunch are good news to me. Gone is the over complicated old web site, full of words and hard to follow.

In its place, a new design. Not far off what we have done with Pension Geeks.

I like the cleanness of it. It’s easier to navigate and the messages are clearer.

Having said that, the front page is just plain annoying! I like the video of everyone. Faces I recognise and many I miss. It shows the magnificence of Heath Hall and tells the story well of a young and dynamic workforce. Playing croquet, answering phones, looking busy. A bit too signposted in places, but a good message.

The annoying bit though is the 70 or so words that fill the middle of the screen, so you can’t see the video properly. I found myself wanting to hit the delete button, but there wasn’t one!

The words themselves look like they were manufactured by committee. Pretty much at odds with the clearness of the message elsewhere on the site. Just plain strange.

The other change is the name. Gone is Anthony Hodges Consulting, replaced by plain AHC. And a new logo too. In red. And in a speech bubble.

Red is a bit of an aggressive colour and to put it in a speech bubble seems a little too pushy to me.

But overall, a great new site.

May AHC only ever see red on their logo and never on their balance sheet!

From Ford Model T to Lamborghini

It’s nearly six months since Steve Webb made his controversial Lamborghini comment - that people should be able to use their pension savings to buy a Lamborghini if they want to. 

And it was the extent of the pension changes announced by George Osborne at that time that took us all by surprise. But six months on, with a lot of reflection, and considerable hard work from the pensions industry, we’re getting used to the idea, the flexibility. And to some extent, the increased simplicity and reasonableness of the changes. Annuities will still exist, but gone is the need for an annuity and with it, the effect of the fluctuations in annuity rates from month to month that created a lottery for the approaching retiree.

In its place is a need to communicate like never before. The trustees need to decide how to respond to changes that affect their plans (the Taxation of Pensions Bill is just out). And then they need to act. Members will need that oft-spoken of information that Steve Webb speaks of like never before.

We’ve come a long way from a prescribed defined benefit pension plan (the Ford Model T of pensions) to the Lamborghini type choice that awaits today’s pensioners. I think that’s good. But trustees need to start reviewing the changes early, and then to shout loud those changes to a workforce that still has a mental block the moment you mention the word ‘pension’.

More than Pensions......

THE REASON I'VE BEEN AWAY FOR THREE WEEKS. LIFE IS MORE THAN PENSIONS.....

You drive for 5 hours from Johannesburg, through the mountains and over the Swaziland border. What greets you is quite breathtaking. Bulembu is an old mining town. When the mines closed nearly ten years ago, the 10,000 population moved out. Bulembu became a ghost town. Until someone had a vision of what could be.

Today a Christian trust owns the whole town. All 4,000 acres. The population is back to 2,000. There are successful industries in wood production, water bottling, honey production, a bakery, a dairy, successful tourism. All from nothing.

Most of all, there are 350 orphans saved. Bulembu has become a centre for rescued children. With the worst HIV rate in the world at around 40%, and an average age expectancy of just over 30, Swaziland is slowly dying. Children die daily. Bulembu is changing the statistics.

Their aim is to be a sustainable community for 2000 children by 2020. Their shirts carry the slogan ‘experience transformation’. And they are. In restoring a town, they are transforming a nation.

Not so much a dogs life.....

Just had to check my calendar. No, it’s not April 1^st. So the headline in Pensions Age is genuine- the police are paying pensions to dogs!

It’s kind of funny, but sad at the same time. Up to £1,500 per dog, it’s actually a subsidy for the pet owners who take the dogs in at the end of the dogs police career.

At the risk of upsetting pet owners everywhere (and I was one until a couple of years ago- Wesley, our wonderful Chocolate Labrador), I can’t see how we can justify pensions for pets. I work in India alongside charity workers who get less than that a year. And amongst the poorest of the Dalit community who live on next to nothing.

Punter Southall are quoted in the article, saying ‘retired Nottinghamshire police dogs will be better provided for by their employers than many in our society’. It’s a strange world.

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?.....

The Value We Place On The Old

Former head of the Benefits Agency, Lord Bichard, has suggested that retired people should be encouraged to do community work such as caring for the ‘very old’ or face losing some of their pension. He went on to suggest older people were a ‘negative burden on the State’. (See main article: BBC News).

Slightly to the right of Genghis Kahn, Lord Bichard’s remarks are ill thought through. Many older people already work voluntarily. A lot of charities depend on them. To suggest that benefits should be lost for those that are not working in retirement seems to miss the fact that individuals have worked a lifetime for their pension and paid taxes for their benefits.

To suggest that older people are a ‘negative burden’ is ageist and extreme. I’m sure there are some who may not deserve the State benefits they enjoy but to target those in retirement is perverse and unworthy of a country that owes so much to the generations that have gone before us.

What is a Pension?

First written 31 May 2012

What is a pension?

The dictionary says it’s ‘a regular payment made during a person’s retirement from an investment fund to which that person or their employer has contributed during their working life’.

You could say it’s a payment later in life for work done today. Maybe a promise given for work completed. Or simply financial security. All these and more, I’m sure.

What it isn’t is a promise to continue the promise into the future at the same rate as in the past. Times are hard. Companies have cut back on pensions. Government and local authorities have to do the same. So when council workers and doctors go on strike (or threaten to) on the basis of a reduction to pension, it’s the wrong argument to pick. They still have protected pensions to this point in time and the changes in the future are still far more generous than the average private sector pension plan.

My friend in India has a pension plan. It’s called the goodwill of his children to look after him. We really don’t know how lucky we are.

Outsourcing, in-housing, deleting, replacing

First written 9 February 2012

The Daily Mail says goodbye to their long serving Pensions Director soon, as Geoffrey Staines retires (Professional Pensions 9/2/12).

Geoffrey cost me a lot of money. I used to work for a media firm and was part of an industry group along with Geoffrey. Each year he provided tickets for the Ideal Home Exhibition, sponsored by the Daily Mail. I couldn’t go but my wife did…. Geoffrey cost me a lot of money!

Geoffrey’s retirement has allowed the Daily Mail to change things around. They are appointing a Group Reward Director instead of a Pensions Director. There is a trend here. Over the years, there has been a pretty constant move to outsourcing pension administration. As this happens, pension departments have been closed or merged with other HR related activities. And Pension Managers have been replaced with Benefits Managers, Reward Directors etc. (As one ex Pensions Manager announced, ‘I’ve been deleted!’)

Against this trend, I’ve heard of a couple of companies recently, contemplating bringing their pension administration back in house. This is due to auto-enrolment and the number of zero’s on the end of the charges from third party administrators for managing the new regime. Are we seeing a reversal of the outsourcing trend? Or will we continue to see Pension Managers replaced by Reward Directors?

The Size of the Pensions Problem in 2011

First written 22 December 2011

New Zealand earthquakes. Japan Tsunami. Japanese nuclear power stations. The Arab spring. Tunisia. Egypt. Yemen. Libya. Gadhafi’s death. Syria. Egypt again. Bin Laden’s death.  Norwegian shootings. Riots in London. Riots in Britain. Phone hacking. Somalia famine. Turkey earthquake. Pakistan floods. Philippines floods. Anti-capitalist camps. Greece crash. Italy Prime Minister. Euro troubles. Euro veto.

Pensions.