Confessions of a benefits manager: Candid facilitates pensions workshops

The order has come from on high to conduct some special pensions training.

I do wish the Higher Beings (our management team) wouldn’t interfere in my work plan like this. I had already been thinking we needed a refresh given upcoming changes in legislation, but I work much better when my projects are my own idea than when they are reduced to a mere task. I like to be allowed to delude myself that my role is strategic.

Confessions of a benefits manager

The European head of purchasing started it. He wants us to run some special sessions for those close to retirement so people are informed about their choices.

I think he should mind his own business. Actually, I suspect it is exactly that: his own business. You don’t get a Higher Being suggesting anything unless it affects their personal circumstances in some way. I reckon he heard something about pension changes on Radio 4’s Moneybox that he didn’t understand, and thought he would get the company to fund some training. Our senior management may not get a lot done, but they certainly get what they want done by others.

Sure enough, I can see from our HR system that next year he will be 55, so he will be one of the first potentially affected by new flexibility in the legislation.

Involve consultants and providers

Giving information on pensions is fraught with danger. We don’t want anyone coming back in 10 years’ time saying we advised badly. That means I have to get Smarmy Consulting involved, and possibly also our provider as well.

The good thing is that I don’t have to argue about their fees this time; the big boys want it done, so the spending is already blessed. Phew.

I have a chat with Smarmy about who it is going to send out. I’d like our account manager, Oily Oliver, because although he is a bit slippery, he does at least have some personality. His new sidekick, Barry, like many who have chosen pensions as a career, has a tendency to look at his shoes while he is talking.

On the other hand, Barry is considerably cheaper. Smarmy wants to send two people. Well it would, wouldn’t it? I have long since discovered that consultants are not allowed to visit clients unaccompanied. I am not sure if it is because they need a witness to cover their backs, or because they can charge twice the fee that way. I am not having it.

If we have to have our provider, SubStandard Pensions, along too, they can manage with just one guy from Smarmy. I know SubStandard will do a training session every so often for free, so we can be economical about it, too.

Pensions workshops

I advertise a series of workshops to be held in the big conference room at lunchtime. Sure enough, our head of purchasing is in one of the first sessions. He sits at the back trying to look nonchalant and disinterested, but I am on to him. I know his type: he won’t ask any direct questions because he won’t want to look stupid. He will pretend he is asking on behalf of his team.

Sure enough, he asks a detailed question about tax on pension taken as cash, finishing by saying ”in case one of my team asks”. Silly man. Try to get a pension man to give definitive tax advice is like trying to get a gardener to do weeding. You know they can do it, and you know they should do it, but if they don’t want to, they won’t. Of course, Barry’s response is so sprinkled with caveats about individual circumstances that I don’t think any of us are any the wiser.

A group of guys have travelled in from our warehouse for the training. They want to know about taking the tax-free lump sum. One of them wants to buy a new car with it, and the other one would like a proper holiday. This is what alarms me. If people are suddenly allowed flexibility with their pensions rather than taking a simple annuity, those who haven’t a clue about money will probably just spend it, regardless of the tax and financial consequences. It is a disaster waiting to happen.

Annuities explained

Smarmy and SubStandard are doing a fairly long session about annuities. SubStandard tells us that annuities are much higher for people living in the rougher parts of some cities, because of expected mortality rates. In theory, you could move to a dodgy area just before retirement, get a fantastic annuity rate on your pension, and then move to a healthier area later on. However, anyone living in those particular streets probably wouldn’t get out alive, or at least with all their household goods intact. 

Similarly, rates change with smoking: people who have smoked for at least 10 years before retirement can get up to 25% more pension. However, you have to factor in the cost of buying tobacco for ten years, and hope you are still alive at the end of it. One of the warehouse guys wants to know how we will prove he has been smoking for 10 years, but he doesn’t get to hear the answer.

Change in limits and the lifetime allowance

The head of purchasing jumps in asking about changes in limits and the lifetime allowance. He says, of course, that he is asking ”for his team”. Nonsense. He is the only one in that department likely to bump into any limits. The others are all on a pittance, by comparison.

I’ve asked for a chart showing annuities in relation to retirement date. People need a clear picture of the full impact of retiring early, especially for those who don’t actually listen to words properly. The head of purchasing suddenly looks worried. He sits up a bit straighter and peers worriedly at the screen. Ha, so, he was thinking of going soon. Senior management really are so predictable.

Next time…Candid finds the medical plan is put on stop.