Art by Dadu ShinThe People’s Pension—one of the UK’s biggest
multi-employer defined contribution pension providers—organised a small, civilised
drinks-and-nibbles event in July. Its mission: Meet finance hacks and get the
word out that auto-enrolment is not just about the government-backed National
Employment Savings Trust (NEST).
Amid chattering journalists and fund representatives stood a caricaturist, complete with easel, manically scribbling away on less-than-flattering cartoons of almost every attendee—often without them realising until being presented with the finished article.
Surprised with such portraits—both their existence and, frankly, wholly inaccurate depictions—CIO Europe’s staffers took on the challenge of hiding themselves in a small room. Natural innovators, they arrived at a solution: Cornering Darren Philp, People’s Pension policy director, and firm CEO Patrick Heath-Lay to quiz them about the provider’s investment work while using them as human shields. Philp also reluctantly clutched a portrait of himself—or, rather, his torso. That’s what you get for being head and shoulders taller than the artist.
“People do compare us to NEST and other master trusts, but it’s not about us versus NEST,” Philp says a few days later. However, he does admit that the People’s Pension—and its parent organisation, the multi-employer pension for construction workers B&CE—has been worried about NEST’s dominance.
There is a new master trusts regulatory standard, but it’s voluntary and only three organisations are signed up.
The People’s Pension is at the heart of a dramatically changing retirement landscape in the UK. B&CE has been providing pensions and other benefits to the highly transient construction workforce for 30 years, and so felt well placed to enter the auto-enrolment arena for other industries. Since launching the People’s Pension in 2011, however, the challenges have kept coming.
Already with 1.5 million members from more than 6,000 UK employers, the People’s Pension is gearing up to take on the smallest employers: high street coffee shops, grocers, butchers, and other ‘micro-employers’ that have never dealt with retirement savings.
Philp talks through several elements key to the provider’s success in the next few months and years: namely, engagement with accountants, lawyers, advisers, and other intermediaries to promote the brand. The group’s three core principles of simplicity, helping employers, and engagement are likewise paramount.
Back at the drinks event, Philp did eventually get a proper caricature done. While the sketches of him and his colleagues now adorn B&CE’s Sussex headquarters, more important design work is being finalised. CEO Heath-Lay and his team are at work on an investment proposition that accounts for its rapid growth of membership and escalating demand for liquidity in retirement, following last year’s UK annuity reforms.
In addition, Philp and others have another project on the go—one inspired by Dutch and Swedish pension innovation, and which could have a profound impact across Europe if it proves successful.
“People need information,” he says. “They need a reasonably full idea of what savings they have, but at the moment this is very fragmented. No one knows what he or she is going to get from the state pension, for example.”
Hence the fund’s championing of the ‘pension dashboard concept’. Similar tools are already in use in the Netherlands and Sweden, and other European Union countries are considering implementation.
“It’s an online hub that would allow people to see all of their savings including the state pension,” Philp explains. “If people do want to engage you need to make it easy to do so, and we’re seeing the industry, regulators, and government coming ’round to this idea.”
“All this is doable—the technology exists,” he adds, “so let’s use it to get people engaged, help them, and give them a good service.”
Members will “demand more innovation” from providers in the defined contribution market in the years ahead, Philp concludes, and the People’s Pension is determined to provide it—cartoons or no cartoons.