The various entities involved in determining the direction of the pensions industry are rather like the Lady of Shalott, says Steve Delo
Out flew the web and floated wide;
The mirror crack’d from side to side;
‘The curse is come upon me,’ cried
The Lady of Shalott.”
– Tennyson (1832)
Well, it certainly seems like a curse has come upon the poor pensions trustee! It doesn’t matter which way you turn, some bureaucratic workload comes crashing down on top of you.
A new SORP complicating the Annual Report and Accounts, conflicting disclosure challenges catalysed by Freedom and Choice (George Osborne’s Merlin-like transmogrification of long term pension savings into easy to squander slush funds), page after page issued with every member event from retirements through to transfers out, Chairs’ Statements on DC etc, are all adding to the impenetrable castle wall of words that surrounds pension schemes.
Of course, the new DC Code is our white knight, our very own Sir Lancelot riding over the horizon”
Of course, the new DC Code (due in a matter of a fortnight as I write) is our white knight, our very own Sir Lancelot riding over the horizon. Alas, our handsome knight brings with him another Arthurian challenge for the weary Trustee - 20 pages of guidelines to wade through, decipher, debate, adhere to and turn into some form of action. The heart must sink when 20 pages is something heralded for its comparative brevity!
For those not familiar with the story of the Lady of Shalott, her curse was to view the world from a mirror and weave what she saw into a tapestry. She could not go outside or look directly at anything. But when Lancelot rode past, his reflection caught by her mirror, she could not resist looking at him. Alas, this brought about her doom.
The various entities involved in determining the direction of our industry are rather like the Lady of Shalott. They are locked away, using their thread to construct the tapestry we have to work within. It is very easy to come up with new regulations, freedoms and protocols from afar without having to make it all operate in a practical working environment.
Yet when the real world chokes and splutters that it can’t deal with the pronouncements, the tapestry weavers complain. It is not good enough, they say, that organisations operating based on a pension system designed to deliver a – blimey! – pension can’t immediately morph into delivering an all-options-explained- drip-feed-cash-on-demand-24/7-service!
The Trustee is trapped in a world of 200+ page agenda packs”
Trustee boards are bogged down with paper chasing (often now on-line and in the Cloud but that only saves trees) that is draining valuable governance time that ought to be spent negotiating funding plans or refining investment strategy. The Trustee is trapped in a world of 200+ page agenda packs, checklists that only exist to enable an auditor to put a tick in their own checklist, reports where the caveats are longer than the recommendations and the recommendations are shopping lists of abstract options. We have a whole advisory engine helping Trustees craft documents and disclosures that nobody reads.
How about this for a new rule? Every official signing off a new pension policy should automatically be seconded to a pensions administrator or trustee board for a six-month period to handle the practical implementation themselves. Leading from the front like King Arthur and Sir Lancelot, thrashing through the challenges with Excalibur to improve the pensions outcomes for all!
And thus the Regulator said
To the tired Trustee, his face all red
“No more wordy stuff to dread!
Hurrah ‘cos that’s Shalott!”
Steve Delo is chief executive of PAN Governance and former president of the Pensions Management Institute