PTL Blog

What is your plan B? The question few scheme managers dare to ask

Posted by Richard Butcher on May 31, 2017 10:48:23 AM

If you want to know if your service provider will be around long enough to service your pension scheme, ask them how they propose to adapt, says Richard Butcher, managing director of PTL.

There are, it is said, only two things in life that are certain: death and taxes. Despite this (and even though we spend a lot of time talking about tax) death is an almost taboo subject for discussion.

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Topics: sustainability

Counterparties come to the party

Posted by Richard Butcher on May 24, 2017 11:22:00 AM

First published in Engaged Investor, 24 May 2017

Richard Butcher, managing director of PTL talks about his bugbear in any investment mandate but particularly a fiduciary one, that it is rarely clear who is involved.

I’ve got teenage kids and as a consequence, one of my recurring nightmares is the “facebook party”. You’ll have heard about these. Your teenage child asks “can I have a few friends round while you’re out on Saturday?” You reply, “Sure, but not too many and behave yourselves.”

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Topics: investment, fiduciary management

Increasing Deficits: A time to panic?

Posted by Richard Butcher on May 15, 2017 3:57:52 PM

Barely a month goes by without one of the trade papers publishing the headline that the combined pension deficit of the U.K.s largest companies has shot up/dropped (delete as appropriate) by some incredibly large number. The sensationalism of the headline will directly correlate with the number. This month those headlines were augmented by comments from Mercer suggesting that the recent slowing down of life expectancy improvements had wiped £2.5bn off the combined deficit.

Hmmm. It's time to pause for a moment and reflect on all this excitement.

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Topics: investment, Deficits

How to ensure your consultants are not conflicted

Posted by Matt Riley on May 4, 2017 11:53:51 AM

First published in Pensions Expert, 03 May 2017

http://www.pensions-expert.com/Comment-Analysis/How-to-ensure-your-consultants-are-not-conflicted

Trustees are required to seek specialist advice when running their scheme and in doing so, conflicts of interest are likely to arise. 

Most important though is how these are either handled or mitigated as good governance is an essential part of running a pension scheme. 

There are some crucial points to consider for your scheme when evaluating the role of consultants.

Identify and record risks

One of them is identifying risks. Prepare a protocol to help identify risks and check that your policy specifically considers consultant conflicts, such as instances where the individual (or their firm) also advises the company. If this is not done, the independence of the advice could be called into question later. Advisers may well be conflicted, but this should not stop you from working with them. The trick is to identify and manage the conflict and mitigate your exposure.Make sure you record the range of risks facing the scheme that have been identified. A conflicts of interest register should be maintained recording the conflict and how it is being mitigated. When looking to appoint a new adviser, trustees should ask prospective advisers whether they have any existing conflicts or anticipate any in the future. Most advisers will be used to undertaking these checks, so this should not be a major problem.

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Topics: pensions pensionconsultants

The investment costs map: below-the-line costs

Posted by Richard Butcher on Feb 21, 2017 11:42:44 AM

In my blog The investment costs map: where costs can occur in the investment processI described where and when pension investment costs can occur. In this blog, the third in the mini series, I set out what costs can occur “below the line”.

Firstly, a few things to remember from the first blog. The “line” is where the unit price is calculated. Costs that are below the line are implicit in the unit price (i.e. they are deducted BEFORE the unit price is calculated and so they are invisible to the consumer) and will not be contractually specific. Also, costs have both quantum and duration – different amounts at different times.

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Topics: Transaction costs, investment, cost transparency

The day I used the Chair's casting vote

Posted by Richard Butcher on Feb 17, 2017 3:17:58 PM

I've been involved with trustees and trustee boards for 27 years, but the other day, I experienced a first.

Most trustee decisions are routine and nothing much to get excited about.

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Topics: governance, trusteeship

The investment costs map: above the line costs

Posted by Richard Butcher on Jan 31, 2017 8:54:35 AM

In my blog "The investment costs map: where costs can occur in the investment process" I described where and when pension investment costs can occur. In this blog, the second in the mini series, I will set out what costs can occur “above the line”.

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Topics: investment, cost transparency

Are your pension scheme's contingent assets a "turkey"?

Posted by Keith Lewis on Jan 25, 2017 3:13:09 PM

In 2016 the Bernard Matthews pension scheme started heading towards the PPF. This followed a corporate takeover that excluded the pension scheme. Whilst the Bernard Matthews scheme had a charge over company assets, any asset recovery for the pension scheme is now expected to be minimal.

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Topics: investment, Contingent assets, asset manager

The investment costs map: where costs can occur in the investment process

Posted by Richard Butcher on Jan 19, 2017 7:51:58 AM

Tim Harford, in his book The Under Cover Economist, makes the point that it is very difficult to out-perform the market over the long term, and concludes his argument by writing: “we should gently invest in a wide variety of shares, with no expectation of making a killing – we should diversify, keep charges low and avoid trying to be too clever”.

Good advice, although, in one respect at least, difficult to follow. We can all agree that investment costs should be low (although they should be low and optimal, as opposed to low for the sake of it) but how can we be certain they are when they are so opaque?

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Topics: investment, cost transparency

The cost of being too clever

Posted by Richard Butcher on Jan 12, 2017 11:19:28 AM

Richard Butcher says it's time to learn that complexity is generally costly

My school teachers were okay, but in a lifetime of learning since then I’ve come across so many other people who would have been better. Imagine Jonny Ball teaching you maths, Bill Bryson history, geography or science, or Brian Cox physics. 

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Topics: investment, FCA, asset management

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