Candid takes over pension trustee duties and endures the tedium of a meeting to discuss the shaky state of the scheme’s finances.
I thought I had escaped being a trustee of the pension plan. Recently, Numbers Norman has taken care of all that tedium, but he is on very long jury service and, given my past experience, they want me to take his place.
Sigh. Well, I know pensions are a key part of our benefits offering, and so I should care deeply about the pension plan, but the honest truth is I don’t. Not a bit. The last thing in the world I want to do is sit bored out of my brain for a whole day while Smarmy Consultants talks about yield curves and mortality rates.
Still, things have improved since my last visit. Smarmy has moved offices, and at least the meeting room has heating these days. It also appears to have changed caterers; the coffee is almost drinkable and there are fancy biscuits. Perhaps I will be able to get through the day pleasantly after all.
Or so it seems until the other trustees arrive. It is so long since I was involved, that I know only one of the member-nominated trustees, a guy called Len. I am rather surprised he is still coming, because he looked about 100 back then. Now he looks 105, and is getting a bit shaky.
The new ones would not have been my first choice of trustee either. There is an American manager called Jim. I wonder what on earth he’s doing in the now-closed UK pension plan, but I don’t like to ask. The other one is typical of one of our engineers: he is wearing an anorak over his suit.
Introductions are made, and I am right: Anorak Andy is an engineer. I can spot them a mile off. American Jim is a manager from the Cardiff office. Hmm. There is something dodgy about him. Perhaps he is a plant. I wouldn’t put it past the Higher Beings to get someone nominated just to tip the voting balance in their direction.
I just hope they are not going to raise anything contentious today. I don’t want to be involved if they are going to change all the early-retirement factors or disinvest out of equities. I don’t think I can cope with the worry of it all.
Smarmy Consultants kicks off the meeting by showing us the current deficit. It is staggering. I am reminded of a big black hole. And it looks like the black hole has got a whole lot bigger since the last meeting. Smarmy, of course, has a bunch of excuses ready to explain this. The deficit has even grown since my last meeting several years ago, so it comes down to this: we pay it a small fortune to manage our pension fund investments and now we have even less than we started with.
All the stuff its investment boys said would happen, didn’t, and all the stuff it said was highly unlikely to happen, did. I wonder sometimes if we would be better off just sticking the whole lot on the lottery and be done with it.
Anorak Andy disputes one of Smarmy’s calculations. I knew this would happen. Engineers always dispute someone else’s calculations. It’s not that they are being difficult, it’s just that they see the world differently, and they expect everyone else’s brain to follow the same quirky pattern. Thirty minutes of my life are spent listening to him and Smarmy Consultants reconcile its calculations. That’s 30 minutes I will never get back. And what about poor old Len? He hardly has much time left to waste. All I can say is, lunch had better be good.
Lunch is good
Actually, lunch is rather good. There is a choice of fish or steak or some vegetable thing, with fluffy potatoes and buttery beans. The Smarmy boys tuck in. I wonder if they get this every day; they can probably afford to eat very well on our fees.
After lunch, we are into valuation assumptions. This is where you decide what assumptions to make about people dying and suchlike in order to arrive at a formal valuation of the fund (or lack of it). Obviously, the company wants to value the deficit as small as possible, but the members should want more prudent assumptions.
In this case, of course, the members haven’t a clue what’s going on. American Jim hasn’t seen so many complex calculations in his life, and Anorak Andy is so busy trying to mess with the yield curve formula, he is not actually getting what it is all about. Poor old Len fell asleep straight after lunch. So it is left to me and the other company trustees to control the decisions.
Smarmy is surprisingly little help. Like all consultants, it simply presents the trustees with a knotty problem to solve for themselves. We know Smarmy knows the right answer, because that is its job. But its people stubbornly refuse to tell us what to do, saying they can only ‘advise’. Well, I wish they’d jolly well advise a bit more succinctly.
After another unnecessary hour of taking us through all the possible assumptions, I learn how to intuit, from our actuary’s body language, which are stupid and which are sensible. Smarmy recaps our decision. We need a majority vote, so someone gives Len a shake. His head lolls but he doesn’t wake up. I panic. What if he has suddenly improved our mortality assumptions? Finally, he blinks, sits up and repeats, word for word, what we have agreed and why.
Len, it seems, is a lot more clued up than he looks.
Next time… Candid deals with finance.