The Pensions Advisory Service chief executive Michelle Cracknell is a woman on a mission with two clear aims – to swell her band of willing volunteers and to reach out to the corners of the population which are sent running for cover at the mention of the ‘P’ word send.
With auto-enrolment bringing more than 10 million people into pensions while at the same time the state rolls back its support in retirement, the need for The Pension Advisory Service to capture the attention of the public has never been greater.
Cracknell freely admits the organisation needs to adapt to the new pension challenges. For her, that means a greater focus on DC as opposed to DB, and significantly more targeting of the pensions have-nots than the haves.
“Our remit is to help the public, but we are not hitting all the customer segments we should at the present time. Most customers coming to us are asking about DB and they have at least some level of knowledge of what is going on. I am keen we do more in areas where pensions are a complete mystery to people,” she says.
Succeeding Marta Phillips OBE, who stepped down in the summer, Cracknell was group commercial director at Lift-Financial, before taking over at TPAS. She has over 25 years experience in financial services, having qualified as an actuary in 1997 and held roles including associate director at Bluerock Consulting and director at Skandia UK and Origen. She admits commercial background appears to have appealed to those interviewing her for the job
“My basic message was that we need to increase our customer numbers. I went straight in from a commercial perspective – how do I reach more customers?” she says.
A key part of reaching more customers will be growing volunteer numbers in an organisation that has been an example of the so-called Big Society for three decades now. Supported by a grant from the Department for Work and Pensions, TPAS relies on volunteers for the majority of its manpower in work that sees it acting as an impartial mediator in pension disputes involving occupational, personal and stakeholder pensions and in giving information and guidance to members of the public.
“I want to build on the success of the many brilliant volunteers that we have at the organisation,” says Cracknell.
TPAS has 329 such volunteers at present, with the actuarial profession the largest represented group, although there is also a high number of lawyers.
“It is an area I want to expand, to make sure we are getting the right skill sets. Currently most of the volunteers we have are experts in the field of DB. We want to get more people with DC into the organisation, to reflect the increased importance that DC is having,” she says, keen to point out the positive side of being a part of the TPAS team. “People give up their time for the desire to give something back to society, which is fantastic. And they also get CPD points for taking part.”
But she is aware that time pressures may put many pensions professionals off the idea of giving open-ended commitments to devote time to volunteering. So part of Cracknell’s strategy for increasing volunteer numbers is to bring them in as groups from organisations rather than as individuals. This team-based approach should relieve the pressure on individuals’ busy working lives, she argues.
“This group approach means there is less pressure on the individuals. If they think they are not going to be able to do the work themselves – someone else will be able to pick it up. So we are looking to providers, consultants and lawyers for volunteers to come on board.
“Many of the volunteers see the benefits of taking part in it – not just in terms of giving something back to the community but also in access to our library of information and attending the workshops we run. For example, next year we have got JLT helping out with DC training for volunteers,” she says.
Organisations that encourage employees to form volunteer groups can quote that as a feature of their commitment to corporate social responsibility, she adds.
TPAS currently offers a free information and guidance service to over 60,000 callers each year, as well as dealing with thousands of written correspondence about disputes and on-line requests. But Cracknell wants to push these figures higher.
As well as increasing boots on the ground, Cracknell wants to increase the effectiveness of the resources the organisation already has. For volunteers, this can mean rather than sitting on the phone talking to a single member of the public, they can speak online to up to six individuals at once through webchats.
“Webchats are a way to speak to a lot more people in an effective way. Signing in and out is a lot quicker and it gives both us and the individual an audit trail of what was said,” says Cracknell.
Cracknell also wants the market insights that TPAS gains to feed into the broader pensions debate to a greater extent than they have in the past.
“We want to share our insights into how the public see pensions. From our perspective it seems the public do not perceive pensions in the way that perhaps providers think they do. For example, take the number of reports from life offices that all talk about affordability of pensions. Our calls reflect a view that the public’s concern is more about accessibility of pensions.
“In recent weeks we have seen reports from Aviva and Blackrock, for example, that have both alluded to the adequacy and affordability and the idea of people wishing they had saved more when they were younger. Yet we hear people saying ‘I know I should be saving more in a pension but it is all so complicated.
“So in my opinion it is accessibility that is the real key issue. It should be about trying to frame pensions in a positive light rather than always saying that you aren’t’ doing enough. Providers need to make saving something that is more easily available to the public,” she says.
For Cracknell this is in part down to the way financial services organisations have got so used to operating within a tight regulatory framework.
“If for example you have got lots of small pension pots that you want to combine in one place, the response you will get from a provider is that you will need to speak to a financial adviser, which means it then often doesn’t happen. As an industry, we get scared of compliance.”
Cracknell is keen for the organisation to reach out to Lord Turner’s unpensioned millions in a way that it has not done in the past.
“We aren’t getting to the people who need help – such as those in their 40s and 50s who are panicking about the fact they haven’t got any pension. We need to access those people for whom pension saving is a problem, not just those with problems with their pensions. The Money Advice Service is also trying to do work in this area,” she says, adding that the combined auto-enrolment and state pension reforms obviously present a massive opportunity to do this.
While auto-enrolment enquiries have been relatively low so far, even though the millionth employee was enrolled several months ago now, Cracknell does expect a significant increase in workload when the single-tier pension is implemented from 2016.
“The single-tier pension will not simplify the pensions landscape any time soon because of the legacy of decades of pensions legislation it is being built upon, which means both the Pension Service and TPAS will have many years of work to come.
“My personal view is that the single-tier pension will prove to be a really positive step for pension saving in the UK because uncertainty about whether it really pays to save has been a real barrier to a lot of people,” says Cracknell. “But there will be a massive job for both us and the Pension Service, who are set up to tell people what their state pension entitlement is, in explaining how it all works. There will be a lot of people questioning whether they have built up full entitlement,” she adds.
TPAS’s enquiry rates are very much related to news output – particularly the weekend personal finance sections of the national newspapers. Monday usually sees a spike in enquiries, often about a story that will have been widely covered, with one-off stories in the week causing similar peaks.
One ongoing issue that has generated a lot of engaged callers is pension liberation, which saw a spike of enquiries in May.
Cracknell reports that members of the public contacting the organisation about pension liberation fall into two distinct camps – the innocently oblivious and the not-so-innocent hopeful. Pension liberation is attractive to lots of people who want or need the cash in the short term, so the desire for people to want it to work is commonplace.
“Half of the people we speak to sort of know that pension liberation is dodgy and the get disappointed because they are hoping that we will say it is OK to go ahead,” she says, pointing to this example of a genuine recording of a call from a member of the public:
‘I have ‘found’ a pension fund for £105000 from an old employer occupational scheme. This is not my main pension – I work for an insurance company and have accrued 19 years of final salary benefits, which I will take at 55 in 4 years’ time. Is there a legal pension liberation scheme available for this £100000? I appreciate tax will be paid at 55 per cent plus a fee.’
“Then there are the people who haven’t got a clue about pensions liberation, but come and tell us that someone has suggested they can get a loan against their pension fund. We also get those who are hounded mercilessly by people telling them they should get cash out of their pension, and they decide to look at it even though they don’t really want to, because they have given into the pressure.”
This hard sell approach often involves scammers saying they are doing reviews or are in some way saying they are government backed, often playing on news about pensions to make their story plausible. Members of the public then come to TPAS because they are nervous about what they have committed to, and often understand that they can be easily hoodwinked.
Pension liberation companies typically use multiple names, with a brand as well as a ‘trading as’ and a ‘registered as’ title, says Cracknell.
Raising name awareness, which she freely admits “has fallen through the floor” is also a key issue for TPAS. “I personally have a greater recognition of OPAS, the Occupational Pensions Advisory Service, than TPAS,” she says.
While it is a name that has the word ‘advisory’ in it, TPAS gives information and guidance only, what Cracknell describes as ‘signposting’.
She is keen to start extending TPAS’s signposting into the workplace, suggesting employees would benefit from the independent validation of the messages their workplace platforms deliver through easy access to the TPAS site.
“Why would employers not want a link to the TPAS website on their own scheme website? People often want a second opinion, and embedding our website within their own workplace site would give employees an independent source that would enable them to take on board the communications they are receiving with a greater sense of security,” she says.
Like anyone celebrating their 30th birthday, TPAS is both looking back and looking forward. The organisation can reflect on three decades of selfless service to confused members of the public unable to afford or unwilling to pay for professional advice.
For Cracknell, the task is to reposition TPAS for the very real challenge of bearing the difficult message to the millions of underpensioned Britons that they, not the State or employers, are going to be the ones responsible for their retirement.
The top 5 reasons for contacting TPAS
1. Making choices at retirement
2. Tax relief and allowances relating to their pension
3. Enquiring about advice received now or in the past
4. Information on death benefits
5. Accessing pension as a lump sum