AMNT open meeting Thursday 26 Sept - Fees, Charges (& what we can do about them)

The next open meeting of the AMNT is next Thursday 26 September 2013. All member nominated pension trustees and representatives are invited to join the AMNT and attend. Click on this Eventbrite link.

"Getting the best value for money is the theme of your next AMNT members' meeting. Fees, charges (and what we can do about them), responsible investing and trustee training will all be on the agenda. The open meeting takes place at the Pensions Insurance Corporation 14 Cornhill, London EC3V 3ND on Thursday 26th September.

As you know, all trustees should complete the Pensions Regulator's Trustee Toolkit, and even those who have done so may know that the Regulator regularly updates the training. On the morning of 26 September you are invited to join in our Trustee Toolkit Training session, and this time we will be going through the Regulator's e-learning modules on Pension Liberation Fraud, and "DB scheme, solvent employer: wind-up or buy-out". We are allowing lots of time to talk around these issues during the session.

After lunch we will be discussing responsible investing and some of the corporate factors that may have a negative impact on investment returns to our schemes which we as trustees should be looking at.

We will also be reporting back on the Department for Work and Pensions' consultation on governance in defined benefit schemes and their proposals on improving trusteeship in the DC world.

Our recent newsletter asked whether you might be interested in taking the PMI exams - the Award in Pensions Trusteeship – and several members responded.

On the day we hope to be able to go through some of the previous exam questions to give you a flavour of what it involves.

But many of our trustee members place the highest value on being able to meet up with fellow trustees and talk about common issues and problems, and there'll be plenty of time on the day to chat informally. As always, those who don't need to rush off can stay for a drink and have another opportunity to network".

"The Emperor has no clothes": but still killing retirement hopes and dreams

This cartoon is from Friday's "Inside Housing" Magazine about the £5 billion Pension Trust which is forcing out, for no good reason, many third sector employers from its defined benefit scheme, while pricing out others due to huge rises in contribution rates.

While I am pleased that Inside Housing has led this debate in our sector and had a news article, analysis and editorial on this subject, it has hasn't quite got it right about some pretty important issues.

1. Why is the Pension Trust writing to employers threatening to force their their workers out of a decent pension scheme on the basis of discredited "mark to market" accounting measures? Why are they increasing contribution rates on this basis to such levels as to force even more schemes to close.?

2. Why is the Pension Trust not talking to the Pension Regulator about extending its deficit repayment period to take into account the 200 year abnormal gilt yields, which are making schemes seem to be in trouble, when they are clearly not? Other social pension funds have done so successfully, why hasn't the Pension Trust?

3. The Pension Minister Steve Webb MP himself has recognised "mark to market" is a nightmare which is killing perfectly good pensions schemes and has promised to do something about it. Why force schemes to close when change is likely to happen soon?

4. Why isn't the Pension Trust thinking about asking the highly paid to pay more? They already pay less than the low paid due to high rate tax relief? Why aren't they encouraging or looking into salary sacrifice, contribution "caps and shares", changes in retirement ages, hybrid schemes or investment fund merger?

5. Was the Housing Charity "People Can" forced into administration by the Pension Trust, discredited pension accounting measures or Government cuts? What are the real reasons? Who is really to blame?

6. The Pension deficit is not "the result of poor returns on government bonds in which the scheme had invested heavily" (page 12).  The problem is not investment returns it is the way you calculate the cost of pension promises (liabilities) which are currently based on government bond yields.  This is absolutely crucial for people to understand. The deficit has increased in the last 3 years even though the scheme investments have increased in value.

7. What has changed? Have people suddenly started living longer in the last 3 years? No, the only thing that has changed is that gilt yields are at a 200 year low due to reasons completely unrelated to the real cost of a pension.

8. So "The Emperor has no clothes" the deficit is not real. So why close and force people out of decent pensions for no good reason?

9. It is a fact that closed schemes become more mature and are forced to have smaller and smaller levels of equities and more and more traditionally low return bonds and cash holding. While at the same time paying the same level of huge fees and commissions.

10. Closing schemes does not get rid of any deficits, in fact they can make things much worse.