PLSA Chair sets out vision for trust in pensions

Richard Butcher, Chair of the Pensions and Lifetime Savings Association (PLSA) will deliver his Chair’s introductory speech at the PLSA’s Investment Conference on Wednesday 6 March, in Edinburgh.  

Mr Butcher will use his speech to highlight the importance of growing trust within the pensions sector in these uncertain geopolitical and economic times and how, despite being on the brink, we have the opportunity to enhance the sector’s relationship with savers.

“The political, economic and financial factors will, inevitably, lead to unsettled markets for some time – but it is this fact that leads us to opportunity,” Mr Butcher will state.

“The opportunity to lose the saver but also the opportunity to bring the saver with us. In these tumultuous times, our relationship with the saver is on the brink. We have the chance to enhance it.

“In a survey* we did last year, fewer than one third of non-retired respondents with a pension told us they trust the financial services industry – and that fell to little over 20% amongst baby boomers.

“Well, people may not trust the financial services industry as a whole, but 64% trust their pension scheme to invest their money.”

Mr Butcher will also state that gaining savers’ trust is important for the industry and that there is currently a “trust deficit” existing between savers and pension schemes. PLSA research showed that 55% of responders to a survey were worried about news stories regarding corporate failures and employees losing their pensions, while only 16% said they were not worried by such coverage.

“Why is trust important?” Mr Butcher will ask. “Actually this is really simple. We want everyone to achieve a better income in retirement.

“This means more pensioners achieving the standards of living they aspired to. 

“It means fewer complaints and scandals as savers realise they’ll not achieve those standards. Fewer pensioners living under a cloud of chronic financial insecurity for the most vulnerable years of their lives.”

However, Mr Butcher will also point out that trust is important, not only for the saver, but also for the employer. With improved trust, and better incomes in retirement, it will also follow that employers will “be able to manage their workforce more efficiently”.

Over the past year, the PLSA has moved forward a number of initiatives that will help increase trust within the sector as Mr Butcher will highlight.

During 2019, the PLSA will launch its Retirement Income Targets – involving the development of income thresholds pertaining to minimum, modest and comfortable standards of living – as well continuing to be part of the newly formed Cost Transparency Initiative that will implement, promote and encourage the use of new cost transparency templates to standardise costs and charges information for institutional investors.

“The Retirement Income Targets we’re developing with help from across the industry will make the figures real by relating them to people’s lifestyle needs and aspirations,” Mr Butcher will explain.

“This work will demystify pensions – and demonstrate their power.

“The Cost Transparency Initiative that we’re supporting with the Investment Association and the LGPS Advisory Board – and their members – will create a platform to be clear about costs and explain value for money.

“Our work on workforce reporting, stewardship, governance, ESG and patient capital will make sure schemes and investments work in savers’ interests and reflect their values.

“We have a chance to tip over the brink and be in a better place. Don’t let that chance pass you by.”

The comments from Mr Butcher will open this year’s Edinburgh Investment Conference which aims to explore topics including the complicated global geopolitical environment, the heightened urgency of risks posed by climate change, the future impact of technology on industry as well as society, and the waning of the economic cycle comprise a scenario which may see unsettled financial markets for some time to come. 

The Conference will also coincide with International Women’s Day (Friday 8 March). The PLSA recently showed its continued committed to promoting gender diversity in the industry by signing up to the Women in Finance charter in November 2018 and with 48% of speakers at this year’s Investment Conference being women.

This event is the UK's largest conference focused on pension fund investment and is attended by over 950 pension professionals.

NOTES TO EDITORS

*The statistics are based on an omnibus survey conducted from 12 October to 16 October 2018 by Opinium – on behalf of the PLSA –  with 2,006 UK adults (aged 18+). The data has been weighted to be nationally representative.

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