Barnardo’s pensions manager, Dr Graham Brown is a man on a mission, travelling the length and breadth of the country to let staff at the children’s charity know about their pension and what to consider in the run-up to retirement.
When Brown first arrived at the charity in 1993 its defined benefit (DB) pension was “in a considerable mess”. He and his team spent the next seven years getting it in shape. “We had to do an awful lot to get the scheme going and as a consequence we won a raft of awards,” says Brown, who cites this turnaround as the most significant achievement of his career.
Like most organisations with a final salary pension, Barnardo’s has taken steps to minimise its exposure to risk. In 2007, it switched the final salary pension to a career-average scheme and closed it to new joiners. New employees can now join a stakeholder pension with matching employer contributions of either 4% or 6%.
Brown, who oversaw the project, travelled all over the country to communicate the pension changes to staff via 56 seminars. “At the time, we had 3,500 active members and, in the end, we saw just over 1,300 at the seminars.”
The general move by employers away from DB to defined contribution (DC) pension schemes is, of course, not without its issues and puts the risk of choosing investment funds with the members. For this reason, Barnardo’s limited the number of funds on offer through its stakeholder scheme to ten, covering everything from low- to high-risk and including a DC banking fund as a default option. This works on the basis that as profits are made, they are taken out and moved into bonds so that the gain is captured.
Barnardo’s has also set up a management committee to oversee governance issues including decisions around contribution levels and the type of default fund offered to staff. Brown believes that it is essential for employers with DC schemes to go down this route in order to protect themselves as well as staff.
With just two schemes to manage, Brown’s days are quite different to when he first started out in pensions at the International Publishing Corporation, which then published the Daily Mirror, and where he was given 13 of the company’s 66 schemes to oversee. Brown was also responsible for death-in-service claims, a fair chunk of which he, says, were caused by liver damage. This was a job in itself, with more than 1,000 deaths a year out of 55,000 active members across all the firm’s schemes.
Those were the days when the newspaper industry was totally unionised – a factor that helped Brown get his first job when, in 1970, he returned to civvy street after five years in the army. “A friend of my wife’s who used to work at the Daily Mirror took me to the union office [where] they asked me if I was any good at maths, looked through their file and said ‘how about pensions?’ I didn’t even know what a pension was.”
After six years, he left to go to a news agency called the Exchange Telegraph Company, where he got involved in every aspect of pensions administration. Then, after spells at the Toleman Group and at advertising agency D’Arcy Masius Benton & Bowles, Brown ended up at Barnardo’s where he has also taken on responsibility for occupational health and sickness absence as well as overseeing pre-retirement education. Pensions though is where his expertise lies, a field he has further explored by becoming the first person in the UK to gain a masters degree in pre-retirement education from Surrey University. Always keen to develop his interests, Brown has also studied for a doctorate in practical ministry.
Curriculum Vitae 1993-present Barnardo’s, pensions manager 1991-93 D’Arcy Masius Benton & Bowles, pensions administration manager 1980-91 Toleman Group, general manager (insurance and pensions) 1979-80 Drivers’ Bureau, office manager 1976-79 Exchange Telegraph Company, pensions officer 1970-76 International Publishing Corporation, assistant claims manager (pensions) 1965-70 Army Q&A n What advice do you have for other benefits professionals? We must always consider communication as being the largest priority. You can have one of the finest schemes in the world, but unless people are aware of it then the take-up is not going to be good. Also, one of my big beefs is good pensions administration. We have to strive towards excellence even if, ultimately, we never achieve that.
n What is your favourite benefit? Holiday. I work really hard and I do enjoy my time off. There was a time when I would work loads of hours and I learned the hard way as I wasn’t seeing my family a great deal and I had to stop that. Now I refuse to take any form of communication material with me so I can have a break from things and relax.
n What do you think of the government’s plans for pensions reform in 2012? Too little, too late. I would have been happier if they were stopping people from opting out [of personal accounts altogether]. This whole idea of putting people in [personal accounts] and then allowing them to opt out only goes halfway to solving the [pensions savings] problem. If people are allowed to leave and produce nothing for retirement, unfortunately, they will do so. [Also], 8% [in contributions] is not going to produce much of a pot, even after 30 [or] 40 years.