LPP: Pensions are not in dire straits
Traditionally, August has been a good time to clear emails, take the time to read some thought-leadership booklets that consultants often send you over the months or just chip away at the fringe pieces of work that somehow slip down the pile in busier times.
This may still be the case for some industries this year, but not ours; pensions have been leading the news agenda for several weeks now.
Be it issues with the parent companies of funds, such as BHS and Tata, market movements adversely affecting returns and deficits, or ministerial appointments, it is hard to think of a time where there has been as much change and challenge.
If pensions professionals find it a challenge to keep up, what hope is there for those most directly affected?
Even for those of us who have spent most of our professional lives working in the pensions sector, the pace and scale of recent and ongoing issues are more profound than we have ever experienced. In the Financial Times last week alone we have had a front page, a Lex column and an editorial all on these issues.
Industry is addressing concerns
While I do not believe we are in the middle of our annus horribilis, we do need to recognise that times have changed and so must we.
This does not mean the ‘death of the defined benefit scheme’ as you may have heard from some harbingers of doom, but rather a rethink is urgently needed.
I have used these pages before to welcome the Pensions and Lifetime Savings Association’s DB Taskforce and what it is aiming to achieve – sustainable DB pensions – and this is a good step.
However, what we are doing behind the scenes is rarely communicated to those we are doing it for – our members.
If pensions professionals find it a challenge to keep up, what hope is there for those most directly affected? The danger is that with all this news, members of our very own schemes will worry that changes they do not understand are affecting them or being imposed on their pensions by forces they are unable to influence.
We must do our level best to show members that amid all this public noise the industry is not taking an ‘August holiday’ but is addressing concerns.
With pension provision in the headlines, it is important that we reassure our members through any means we can – websites, letters, events and the press – that the industry is not in dire straits, the vast majority of funds are robust and well run, and most deficits are being managed accordingly.
Susan Martin is chief executive of the Local Pensions Partnership