What else is on the AMNT’s radar at the moment?
We’re now beginning to expand into other activities such as lobbying parliament and negotiating with the regulators and other organisations in the pension field. As an organisation it concerns us that there is a move towards DC master trust boards not having representation from MNTs. Indeed, we sought to secure amendments to the Pension Schemes Bill that was put before the House of Commons recently so that it included master trusts having MNTs on their boards (an alternative would be in codes of guidance). Our feeling is that if serious negotiations are needed, you need to have the members represented at the table. I think the BHS experience shows that there’s some force behind that argument.
What response did you get?
We have been in touch with all the members of parliament who are on the Bill committee, put forward our viewpoint and given them the background to who we represent and why. We have received a good response from the members on the committee. The next step is we hope that the Minister will take heed of what they say.
How is the organisation funded?
We look to sponsors to cover our day-to-day running expenses. The picture that emerged from our annual membership survey is that about two-thirds of MNTs aren’t remunerated for their work. The view the founding fathers took therefore, is that it wouldn’t be appropriate to charge people for support facilities for a task which has considerable responsibility and they undertake for little remuneration. We find the value of sponsors is two-fold. One is covering the running costs, but perhaps the more important thing is it helps to establish and develop links between fund managers, consultants, actuaries and facilitate dialogue between the members of the association.
Does that dialogue help with lobbying power?
We’re beginning to develop that, yes. Long term, our vision is that not enough people are investing enough money for their retirement. The average contribution for auto-enrolment is very low and Steve Webb is on record, when he was pensions minister, as saying, “8% is not enough.” If we want to push that figure up to 15%, or whatever, I think collectively we need to work
together to establish trust and confidence in pensions, to encourage people to want to invest more in their retirement provision. So yes, all of us together have a joint role in increasing trust. Secondly, it’s about improving basic financial awareness and knowledge. Lots of behavioural economists say one of the problems is most scheme members are pretty shaky on things like, for example, what an annuity is. There needs to be more work done on that.
What does the AMNT make of the ongoing debate around costs and transparency?
It goes back to the question of long-term trust in pension schemes. I think scheme members do want to be reassured about these things. Hidden charges need to be looked at. Janice [Turner] and I, have both signed the letter from the Transparency Taskforce to the House of Commons Select Committee asking if it would consider conducting an investigation into that, so, yes, we hope that will be addressed. Millennials often have a longer-term perspective on these things than those approaching retirement, and seem to weight environmental, social and governance (ESG) factors more highly. That’s something which I think we’ll need to take into account in investment policies.
