Big Bad Boss wants me to take over the pension newsletter.
He has the audacity to tell me it will be good experience. Personally, I don’t look for good experience in the office, because I don’t like to be disappointed. I am certainly not going to look for it in the context of pensions. Silly man.
Still, I can see why he might want a fresh pair of eyes on the newsletter. Smarmy Consulting has been preparing one for us for many years, and it has, frankly, fallen asleep on the job. You only have to pick up a copy and you will start rubbing your eyes and looking around for somewhere to snuggle down. Dull, that’s what it is. Extremely dull.
For a start, it shows the old company logo. Whoops, I must have forgotten to send the new one. No, come to think of it, Smarmy had the new logo on a pitch it made for some other work, but its pension people work in a fusty little side wing all on their own, and I don’t expect they get out much.
Apart from the logo, there are some dreadful out-dated graphics. Where did they get those? And as for the cheesy employee photos, I can tell you one thing: they are not photos of our real employees; they are all smiling, for a start, and they are attractive.
One thing I don’t see are any photos of the trustees. Surely, members would like to know who is taking care of their retirement? I fire off a quick email asking the trustees to send me a photo.
Big Bad Boss has asked me to make sure the defined benefit plan looks positive. Well, I don’t see how I can do that when the deficit is a number that frightens me, even though I am used to working with big sums. Worse, it is pretty much what it has been for the last few years, despite massive payments from the employer. I really don’t see how I can make such dire news into a pretty picture. That gives me an idea. I’ll put the numbers inside a nice graphic of a safe and perhaps no one will notice.
Investment returns have been lousy, and the chart shows a long lists of negatives. Even though we paid Smarmy a small fortune for advice, we were in property when we should have been in corporate bonds, and in corporate bonds when we should have been in property. The only positive return in the whole slide is the hedge fund. Not that I can say much about that. I have seen the hedging strategy, and it is impossible to explain to anyone without an actuarial qualification.
We have also appointed a liability-driven investment manager, and those guys don’t come cheap. I have a description from Smarmy of what he will be doing, but I barely understand it myself. How on earth do I explain that one to a layman? I have to dumb it down to the point of saying he will manage the scheme’s liability-driven investment portfolio. Well that’s clear, then.
We have a section on the funding plan. Smarmy suggests that, despite the fact that we have not made any of the investment returns it led us to believe we would, we can still pay off the deficit in five years’ time as planned. I can write that down, but I still don’t get it. How can we be on track if nothing has happened as well as we planned?
Smarmy says that recent results, post-valuation, are much better. Having worked with it for the last few valuations, I know it always says that. You need a lot of smoke and mirrors to survive as an actuary.
Still, I will present a nice graph showing the funding level growing steadily over the next five years until we are 100% funded. I will show it, but I still don’t believe it. I am not convinced I will live to see the plan fully funded, and I am not that old.
Pension liberation scams
I think we should, once again, warn members about the pension liberation scams kicking around. The thought of transferring someone’s pension pot to a dodgy scheme is enough to keep the trustees awake at night. We can write about the procedure changes we have made to help prevent this happening. It also gives me the opportunity to add a funky burglar graphic to the newsletter.
Finally, we end the newsletter with a section on company news. This is meant to reassure members that the company is solvent and full of cash, so it can carry on making eye-watering contributions to fund the deficit, seemingly indefinitely.
Big Bad Boss provides a summary from the Higher Beings’ report, but I have to edit it carefully. There is far too much talk about restructuring and reorganisation. I leave in a few bits about refurbishing offices and buying a business in Poland. That is about the sum of the good news on offer. I feel like a spin doctor, creating political lies for the people. It’s a dirty job.
Finally, the photos have come in from the other trustees. One of the employee-nominated members, bless him, has sent a photo from the last century. He even had hair back then.
Most of the trustee photos look like mug shots from Crimewatch, and I wonder if it is such a good idea after all. Perhaps I can get our marketing folk to touch up the photos a bit. They could also help me choose new fonts and a livelier colour theme. Who says pension work is not creative?
Next time…Candid researches insurance pools.