Railpen’s Nick Ranson speaks to PP editor Jonathan Stapleton about setting priorities for Railpen; the role for open DB schemes in the adequacy debate; and UK investment as well as the potential of using artificial intelligence (AI) to improve member outcomes.
Nick Ranson joined Railpen as chief financial officer (CFO) and an executive board member at the beginning of March this year – and is an actuary with experience across insurance, asset management and banking, having previously worked at organisations including Standard Chartered Bank and M&G.
In his role as CFO, Ranson leads Railpen's finance and strategy teams as well as a newly created function of group central services, which includes the organisation's change transformation and its technology teams.
Strategy is a big part of his role – "I'm spending the majority of my time on thinking about these issues and where the priorities should be."
Ranson says an organisation like Railpen has a "long list of priorities" – facing challenges, among others, of geopolitical uncertainty, investment market volatility and a huge amount of change in both pensions regulation and the railway sector itself.
He says if he had to pick a single goal, it would be to help Railpen navigate through all that uncertainty and to figure out what the key priorities should be.
Ranson explains: "You can't do everything… Ultimately it is about deciding what are the right priorities and ensuring you get the best outcomes for members, at the best cost, while delivering the goals of the trustee."
Aside from external factors, Railpen itself has undergone a lot of change, particularly within its management team, where Ranson's own appointment this year followed closely after that of Andy Bord, who joined Railpen as its chief executive in October last year following the retirement of John Chilman.
Ranson says that, while the new management team is bringing its own thoughts and ideas, they want to do it "in a way that doesn't stop all the great work that's already in train and all the things that people are already focused on".
Adequacy
Ranson also entered into the discussion on pensions adequacy – alluding to the crisis highlighted by Department for Work and Pensions analysis published earlier this year, which showed that nearly 15 million people are currently undersaving for retirement.
He says that, if pension schemes and policymakers could replay the last 30 or 40 years with the benefit of hindsight, he believes there are a number of things that might have been done differently which would have reduced the scale of the adequacy challenge – such as the greater use of shared cost schemes or different forms of defined benefit (DB).
But he believes that there could still be a role for open DB schemes, such as the Railways Pension Scheme, to be part of the solution.
He says: "We're here because it's a vocation, and we want to help improve outcomes for pensioners across the UK. I think there is undoubtedly an opportunity for open DB schemes to be part of that solution… If we can contribute to the industry debate and help the government, policymakers and the industry solve that wider challenge, then that's a great opportunity and something we should be doing."
UK investment
The government is increasingly looking to pension schemes and providers to help boost investment in the UK – but Railpen is one of the organisations that already holds a substantial proportion of its assets in this country.
Ranson says Railpen already has around a third of its assets invested in the UK – including extensive real estate holdings in Cambridge and Oxford as well as widespread investments in solar and wind farms, biomass and energy storage.
Railpen is also increasing its focus on growth assets in the UK – appointing Julia Diez as head of UK productive assets in September to take responsibility for directing the strategic vision and execution of its portfolio in this area, with a particular emphasis on UK innovation focused investments, co-ordinating efforts across real estate, infrastructure and other private market assets.
Ranson says, however, that any investment decisions need to both pass Railpen's investment governance process and provide the right outcomes for members.
But he adds that collaborative discussions around how to make investment in UK assets easier – such as those being had at the Pensions UK's Annual Conference last week – could be a win-win for pension schemes and government.
Ranson explains: "If we can contribute to debates that make investing in the UK easier and more likely to generate good returns, then that's a massive win."
Generative AI
Ranson is also passionate about how generative AI can improve efficiency and help boost member outcomes.
At the current time, Ranson says Railpen is at "the basic end of the curve" but has implemented a responsible use framework for its colleagues and are using things like Microsoft Copilot to aid productivity.
Railpen has also worked to ensure its reports and websites are machine readable and the information it puts out can be "scraped" by machines.
Ranson says the organisation was currently working through its AI strategy to take this further – noting it had "done a lot of work in terms of brainstorming" and was looking to partner with a number of organisations to explore the opportunities further.
He says there was a "lot of change" going on – both in the industry at large and also within Railpen – adding that "AI might help accelerate or support the delivery of that across the piece".
Ranson adds: "Done well and done responsibly, it could fundamentally help us deliver our operating strategy and help enhance member outcomes.
"If we can find ways to leverage AI in the right way that increases the level of member engagement, that enables us to proactively reach out to individual members at key points in their retirement journey, to furnish them with highly personalized and really accessible information that gives them the right facts at the right points in time to make better decisions, that would be a great thing."
