Plus ça change, plus c'est la même chose
By Pádraig Floyd - 1st June 2009You know, it’s funny in this ever-changing world of ours just how much remains exactly the same. That’s not funny ha-ha, you understand, but funny in the understated, yet back-tighteningly awful way that things are sent to try us.
Even allowing for a degree of misunderstanding or even basic ignorance on one’s own part, quite often it has been slanted, spun or is plain wrong.
Some believe that Disraeli had statistics sussed, but he was talking specifically about lies, and I don’t believe that those releasing research into the market are always seeking to distort the truth. But it can be very difficult to tell. I’ll give you an example.
A recent NAPF survey showed that the numbers of employees who trusted occupational schemes had increased by 2% on last year’s figure. Meanwhile, the number of people joining their employer’s scheme had decreased by 2% on 2008. So which is right in this case? Probably both. What does it tell us about the level of confidence in pensions? In isolation, a bit, but when you consider both elements together, not a great deal. And there is an awful lot of this information flying about the industry. It’s no wonder trustees find it difficult to keep up with the pace of change.
Still, when it comes to confidence in something, we sometimes have small victories that make the struggle worthwhile. I was recently asked to write a short opinion piece on why during the current recession, employers should use cash surpluses to reduce their scheme deficits rather than spending it on their shareholders. Of course, there was someone taking a different position to my own, but I thought about the backlash Aviva faced earlier this year from its own stakeholders when it cockily announced it would maintain their dividend. These shareholders weren’t interested in the insurer splashing the cash, but wanted to be sure the company had something put away for a rainy day.
It’s kind of counter-intuitive, that even after our fall from economic grace, a call for prudence might be heard above the (largely) unabated maelstrom of our spend, spend, spend culture.
And then BT announced it was going to slash its dividend by almost 60% in order to channel funds into its scheme, which is thought to be in the red to the tune of £2.9bn (click here for the full story ). Prudence was back in fashion and good sense was seen to prevail.
If only the same could be said for the actions of our elected representatives in the Palace of Westminster.