Outgoing president Hugh Nolan and incoming president Paul McGlone speak to Jonathan Stapleton about key industry challenges and the future of the SPP
Not everyone was impressed with the white paper published by the Department for Work and Pensions (DWP) at the end of March but Society of Pension Professionals (SPP) president Hugh Nolan - whose term of office finishes at the end of May - takes a more positive view than most.
He says: "It was lovely to see the DWP paper talking about the fact that, although we have had some high profile corporate failures, the pensions system has actually worked quite well in those situations - we have the Pension Protection Fund (PPF) providing a backstop to pensions at a pretty decent level, with industry levies funding the benefits of those people who would otherwise miss out."
In addition, he says the white paper contained positive messages about the number of people still in defined benefit (DB) schemes and the success of auto-enrolment.
"Despite the backdrop of some bad news, so many things are coming out of the white paper saying what a success pensions have been and I think this is very positive.
"I would like to think that the SPP in some small way has had a part in that by trying to keep that positive tone up when negative messages have been coming out of some parts of the media and I like to think the positivity that we in the industry have kept going has been reflected in some of the commentary and narrative we see now."
Aon partner Paul McGlone, who will become the SPP's new president on 1 June, believes the biggest challenge facing the industry is how to communicate with the members of pension schemes.
He says: "We have a continual challenge to make sure people understand, appreciate and value what they have and don't get misled or misinformed - there is a lot of misinformation and complexity out there, which makes it very difficult for members."
McGlone says this challenge has been compounded by the shift to defined contribution (DC) provision and the emergence of Freedom and Choice. He adds: "People are now faced with a huge number of choices - and they are difficult choices."
While McGlone accepts the SPP is not going to directly influence member communication - even if some of the organisation's evening meetings do occasionally cover the topic - he says it can change the opinion of policymakers and, in particular, the media.
"Where there are positive messages, we need to get them out in a clear way," he says. "People tend to moan about pensions but they do take some lead from what they read so getting positive messages out to the media is really important."
Pensions reporting in the mainstream media is a topic that is clearly close to the incoming SPP president's heart (though trade titles, such as Professional Pensions, seem to be exempt from McGlone's ire) - and McGlone believes the SPP should be "calling out" inaccurate, misleading or mischievous articles.
He says: "You are really not doing individuals any favours by making them think pensions are a bad thing when, in fact, the opposite is true - you may have sold yourself some newspapers but have made people worse off as a result."
Nolan agrees: "We want to get a balance and make sure that comment is informed. We can't control what is written in the media but we can make sure the people writing understand the situation and are aware of those positives."
Yet, despite this, McGlone admits there are difficulties with pensions, especially when it is realised that DB schemes have an average employer contribution rate of 16% compared to around a fifth of that for DC.
He says: "This is the real elephant in the room and it is not getting reported on at the moment.
"The difficulty is the underlying economics of it, which is that if you want to retire on a decent pension and at a decent age, then it costs an awful lot of money - and there are only so many levers you can pull. You either retire on less, retire later or you pay more, and none of those are good news stories."
He adds: "Pensions are going to be in for a bit of a drumming in that sense as there is always going to be a story about 'isn't life terrible'."
Past and present: A list of SPP presidents
The Society of Pension Professionals - the organisation known before 2014 as the Society of Pension Consultants - has had presidents from a range of legal, actuarial and consulting backgrounds. The SPP's most recent presidents include:
2002-2004 Donald Duval
2004-2006 Robert Birmingham
2006-2008 Mark Ashworth
2008-2010 Duncan Howorth
2010-2012 Kevin LeGrand
2012-2014 Roger Mattingly
2014-2016 Duncan Buchanan
2016-2018 Hugh Nolan
2018-2020 Paul McGlone
Developing the SPP
Yet, while there is much to do on the communications and media front, the SPP has also been undergoing significant change over the past few years - and is planning to develop further in the future.
Over the past two years under Nolan's watch, the SPP has moved offices from St. Bartholomew House on Fleet Street to Red Lion Court, a more cost-effective premises just around the corner, and has also seen significant growth in the attendance of its conference, dinner and evening meetings - with over 800 people attending its evening meetings last year and over 200 coming to its annual dinner.
It has also started to video its evening meetings to make them accessible for those who can't make the meetings in person.
Nolan explains: "The videos make the meetings accessible but also drive diversity - meaning that people who have to go home for childcare or don't work that particular day of the week can get access to the professional development (CPD) and the top quality stuff we are putting out there."
Yet, as both Nolan and McGlone agree, there is still more to be done - noting that, while 800 people are attending its evening meetings, over 15,000 work for the SPP's member firms, meaning there are 14,200 people the organisation can still tap into.
McGlone says one of the key aims he has for his presidency is to do more to reach out to member firms and to make more people aware of the benefits of SPP membership.
He says: "What we would like to do over the next couple of years - and Hugh has already started some of this - is try and extend our work so that more people get access to SPP benefits.
"There are firms out there that make use of our evening meetings and other events on a very regular basis and there are others that don't benefit as much as they should.
McGlone says the video initiative is part of this push but notes the SPP would like to push out into the regions more as well - noting this is something all professional organisations have struggled with in the past.
"One of the things I will be doing is going to all our member firms and finding out where their staff are based. Once we know where the professional pensions staff across all of our members are based, that gives us a focus as to where we are going to run our evening meetings and perhaps what topics we are going to run them on."
McGlone doesn't rule out running such regional events in conjunction with other industry bodies - saying that such collaboration would only be a positive.
He adds: "We shouldn't be an organisation where our members only benefit if they happen to be based in London."
McGlone adds the SPP also plans to review its roundtables to assess whether it can run more of these events or change the format to allow more people to have access to them and is also going to look at its website, again to try and make it more accessible to members.
"The SPP does sometimes hide its light under a bushel," McGlone explains. "We produce an awful lot of stuff that members either don't realise exists or don't know where to find it. Simply communicating the stuff that is already there so our members make maximum use of it is, I think, something for us to do."
The white paper challenge
But while all this is going on, the white paper will be taking up a lot of time from the point of view of policy.
As McGlone notes: "We haven't had a nice chunky piece of pensions legislation for a while - we have had Freedom and Choice, but there hasn't been a big piece of legislation of this scale since the Pensions Act 2004. Over the next two years, we clearly have a lot of stuff to grapple with - we have all the things in the white paper around consolidation, around scheme funding and around the regulatory environment and that is in addition to all the other things we have going on such as the stepping up of auto-enrolment, and the inevitable consolidation of DC master trusts."
"There is a lot of stuff going on but all the legislative change means there will be a need to talk to the industry to make these ideas and principles work - and that is where the SPP comes into its own, helping to implement it all in a way that actually works."
Position Paul McGlone is a partner in the retirement practice at Aon Hewitt and will take up the role of president of the Society of Pension Professionals on 1 June this year.
Previously McGlone is a qualified actuary and has over 20 years' experience advising a range of clients from both a trustee and corporate perspective. In recent years he has led Aon's advice around de-risking through flight plans and trigger strategies. In addition, he has been a volunteer adviser at The Pensions Advisory Service since 2007.
CV: Hugh Nolan
Position Hugh Nolan is a director of Spence & Partners, a role he has held since April 2016. He is also the current president of the Society of Pension Professionals.
Previously Nolan started his career as an actuarial trainee at Clay & Partners, a firm that is now part of Aon, in 1989. In 2000, he moved to Mercer and two years later joined HSBC Actuaries and Consultants, which was acquired by JLT Employee Benefits in 2009. Nolan became JLT's chief actuary in 2013. He became president of the SPP in 2016 and is also chairman of the Association of Consulting Actuaries' DC committee.
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