Ready, (Re)Set, Go - brief reflections from the PLSA 2021 Annual Conference

I virtually attended the PLSA Annual Conference over the past few days. It’s not the same as attending in person and I’m hoping for a return to more normality next year. But hats off to the PLSA team for putting together another high quality and interesting conference, and making the best of the limitations that come with doing things virtually.

The theme of the conference was Ready, (Re)Set, Go and there is certainly a lot that needs resetting to build a sustainable recovery from the pandemic.

I was particularly taken by the first keynote session where Economist and Author, Professor Mariana Mazzucato, gave a brilliant talk on why Governments seem to now just be in constant firefighting mode and that we need a moonshot in changing the nature of capitalism to deliver more stability and address the challenges that society faces. Mariana argued that business is too often short-termist and extractive, with not enough going into R&D and investment for the future, with the associated positive productivity gains. She said that there was a failure of corporate governance and a need to change the focus away from shareholder maximisation to stakeholder maximisation. She compared some of the challenges with the Apollo moon landing programme and used some of the thinking from that to explain how we needed to rethink our approach and develop a public-private partnership with a common purpose, allowing and facilitating innovation and fair (not excess) profit. If you have access to the conference platform and didn’t see the session, it is definitely worth a look.

Climate change and investment innovation was also, not surprisingly, a key theme, from practical sessions looking at the new TCFD reporting requirements to hearing from a number of schemes as to how they are adapting to the climate and wider social investment challenge. On this I cast my mind back a few years and it is noticeable (and very welcome) that these issues are now dominating more and more time at conferences like this. There has been a real mindset change amongst providers, schemes and trustees even over the past 5 or so years and it is now clear that there is more will than ever for pension schemes to make these issues front and centre of decision making. Campaign groups like Share Action and Make My Money Matter have done a great job of driving change and what we need to see now is words backed up by action.

It wouldn’t be a PLSA conference without sessions on adequacy, at retirement, small pots and dashboards. On all these fronts it is encouraging to see industry and policymakers thinking about the big issues and looking to drive change that will benefit pension savers. The Government has confirmed that the conclusions of the 2017 review into auto enrolment will be taken forward which is good news, but uncertainty around the timetable remains. The conference also came hot on the heels of Andy Cheseldine’s small pots report which is starting to map out the way for dealing with this consequence of auto enrolment. I’m sure Andy himself would say there is a long way to go, but I’m loving that we are taking an analysis and evidence focussed approach to the work as we look to build consensus around the model of the future. On dashboards, progress has been made and the programme is now in full swing. I got the sense from some of the sessions (and this is a theme that is certainly picked up in the programme’s response to the staging consultation) that there is a sense of frustration in terms of the certainty needed to prepare properly. It’s all very well saying that you need to prepare, and there is lots that the industry can do to get ahead of the curve on that, but some things need certainty and the industry is certainly crying out for that. There is also a fundamental issue around data matching and the dashboard liability model that needs addressing sooner rather than later. I thought this was slightly ducked as an issue during the conference, but it is important and one that needs picking up.

The session on pensions tax relief was really powerful and the IFS’ Carl Emmerson gave a great presentation on options for raising more money from the tax system, and in the process highlighting some of the significant quirks and anomalies, and the difficult trade offs. Personally I’ve never thought the current tax relief system to be sustainable nor equitable, but the analysis shows that change is hard and will have unintended consequences. As they say, you wouldn’t start from here…?

Finally, I thought the session by Andrew Dilnot on social care reform was clear, engaging and very thought provoking. My understanding of the issues rose exponentially as Andrew talked through the fundamentals of the problem and potential solutions. Over ten years since the Commission reported looking into this issue it is a positive that action has now been taken, even if some of the elements of the reforms aren’t quite what was originally proposed. The sense I got from the session was we are moving in the right direction.

I really enjoyed the conference, which also saw the PLSA chair baton passed from Richard Butcher to Emma Douglas. The conference was thought provoking and engaging, even if the networking wasn’t the same as being there in person.?

Thanks to the PLSA team for putting on a great event. I’m already looking forward to next year’s conference which will hopefully be a hybrid event allowing people to participate in person and virtually.