Better Pensions: There for the Asking

Asking trustees and sponsors one question on whether actuaries are complying with Government regulations can change the amount of your pension and the quality of your future pension provision.

“Have the actuaries provided their Technical Actuarial Standard 300 Version 2 Report yet?”

Ask it because:

• The risk-benefit analysis required by TAS300V2 to compare run-on and risk transfer transactions highlights that most schemes go to “derisk and get rid” strategies are not in members’ or sponsors’ financial interests.
• The reality is that the risk of a reduced pension is minimal, falling and manageable.  The price paid to get rid is that the upside is sold to a third party (which makes large immediate profits) for nothing.  Exercising discretion is what sponsors and trustees should want to do next in all stakeholders’ interests.
• At present, money siphoned out of the UK corporates into schemes is in turn being siphoned on to life insurers.  

Members and sponsors need to know these numbers are being considered.  Transparency changes minds.  Numbers talk: 

Once the numbers are established the governance takes over.  Trustees who do not ask fundamental questions – like assessing whether to hand the assets and liabilities of a Trust over to a third party – risk being in a breach of trust, justiciable by the beneficiaries.  Taking bad advice is probably OK.  Ignoring key subjects is not. 

Trustees and sponsors will be keen to align with new Government policy.  They should then want to ensure members are informed about their new Funding and investment Strategy and how it impacts their Statements of Investment and Funding Principles.

Do not let the sector drift on further with its self-serving Endgames.  Sponsors need to get stuck in to ensure their money and commitment is being used to best effect.  And to have a better pension, what members need to do is ask for one.

Sponsors and trustees should take care to avoid their trusted advisors natural wish to a cover up the track record over recent years.  What schemes need is an informed “heads up” on where they are.  Ask CARO (C-Suite’s Credible Alternatives Reference Organisation) to provide one.  Contact us to find out more.