PTL Blog

Puppies and pension advisors - not just for Christmas

Posted by Richard Butcher on Sep 30, 2014, 1:51:43 PM

Hugh_Ernie_MontyIt’s almost a year to the day since our border collie Jemima Pippin Tinkerbelle Carol (Jem for short) died and we have finally relented: a new puppy, Hugh Ernie Monty, arrived a few weeks ago.

When we got Jem we were dog novices. We heard there was a litter going locally and we went and got one of them, we had no idea whether her breed was suitable for us and were lucky that it was. As more seasoned dog owners, we knew not to take the same gamble again and found a website to help us choose. As it happens, Border Collie came out top but it was closely followed by a Brittany Spaniel. Hugh is a Brittany/Springer cross.  

As we ploughed through the questions on that website it occurred to me that some of them could be useful choosing a service provider to a pension scheme. 

How much space will your dog have?

Your service provider needs the right amount of space to work in an efficient way. A small TPA isn’t likely to be the best choice to serve a huge DB scheme, they might well flounder. An international EBC probably isn’t the best choice to serve a small DC scheme as they’ll be too costly.

How intelligent do you want your dog to be? Intelligent dogs are usually more difficult to train.

Do you want a pension service provider that just does what you want done or do you prefer one that spends their time innovating and creating complex wonder solutions? In practice most schemes want something in between the two extremes. Where any given scheme will sit will depend on the attitude of the trustees/governance board and budget.

How long do you want your dog to live?

This isn’t as daft a question as you think. If you are 70, you probably don’t want a sprightly long lived breed. Similarly, if you are a mature DB scheme heading for buy out, you don’t want a service contract with a multiple year duration.

How long would your dog be alone each day?

Do you want your service providers to get on with the job or do you want them to be reporting to you all of the time? How much are you willing to delegate to them and how often do you intend (or are you able) to monitor them? The need of any given scheme will depend on their governance budget.

How energetic should your dog be?

Do you want a service provider that is really active, active or passive? Do you want one that is reactive or proactive (remembering that activity costs more)?

Do you feel you could control a dominating dog?

Do you want your service provider to lead you or to be led by you? Again, in practice, most schemes will be somewhere between the two. Where any given scheme will sit will depend on the sophistication and experience of the trustee/governance board.

Do you want a dog to cuddle or a dog to roam the grounds?

Some service providers can need to feel your love regularly while others can be emotionally autonomous; the first need to attend all of your meetings and tell you in great detail what they have been doing while the second is brief to the point of appearing not to care that you are there. Which is suitable for any given scheme will depend on the governance budget and attitude of the trustee/governance board.

Getting the wrong type of dog can be a nightmare (imagine a ghetto youth with a toy poodle or a 90 year old with a greyhound) but so can getting the wrong type of service provider.  Schemes must think very clearly, and honestly, about what it is exactly that will suit not only the status of their scheme but the dynamics of their board. If you fail to choose wisely it’s likely that you’ll spend your lives together frustrated, angry and clearing up little piles of crap.


First published in Engaged Investor Online on 29 September 2014

Topics: Pensions

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