Scrutiny. Incentives. Members. Do DB schemes need rubber trees or palm trees?

What is needed to bring better pensions and economic growth:

• Scrutinise actuarial work

Long recognised as needed, the lack of scrutiny made the excesses of LDI and Pension Risk Transfer possible.  Even the threat of scrutiny will transform standards in practice.

• Incentives to change fiduciary duty assessments

Government arranged PPF and FSCS safety nets to be adjusted to favour higher Pro UK allocation of assets.  Long term value sharing agreements given tax incentives.

• Members be activists

Members press hard for discretionary value sharing between sponsors and past and present employees.  Vote of membership on proposed bulk transfers.

C-Suite Pension Strategies has tirelessly advocated run-on as a “credible alternative” to buyout since 2018.  When schemes are treated like a rubber tree, members can tap into upside over the long term.  The standard, relentless, life insurer journey to buyout palms off members and is sub-optimal.  Cut in members to a package benefitting all stakeholders.  Members: Call for a vote before a bulk transfer.

Cut in stakeholders

with Value Sharing

​Don't palm off members 

​to Bermuda in bulk

“Add scrutiny and incentives.  Reanalyse members’ best interests.  The result is more of the assets backing DB pension liabilities can be invested to back the UK economy.  To achieve it, finally scrutinise actuarial work and Government adjust what it already arranges as safety nets.  That will update thinking on fiduciary duty and avoid mandation.  Then cut in members to expect to benefit from the exercise of discretion as part of a value sharing package alongside other stakeholders.”  William McGrath, Founder C-Suite Pension Strategies

William McGrath has a financial and industrial sector background.  He was long time CEO of Aga Rangemaster.  Its pension scheme has reached full funding without large sponsor contributions because of a long term, all stakeholder agreement.