As a pensions industry, we don’t collaborate much. There is a culture of secrecy and protectiveness around data, products, and even ideas. It’s understandable: we are all operating in a competitive market, and no one wants to give away their edge. But is that culture helping members? Or holding us back?
When it comes to accessing large-scale investments such as infrastructure or big-ticket UK assets, we tend to act alone. Pooling is limited. Collaboration is rare. Meanwhile, countries like Australia are using collective arrangements to invest in our infrastructure. Australia’s superannuation funds had over (AUS)$100bn invested in UK infrastructure and property by 2023, with IFM Investors among the largest foreign holders of UK transport and utilities assets. Nest, for example, had to go through Australia’s IFM Investors to access those opportunities. It is a striking example of what we are missing by failing to work together.
It is not just investment scale where we fall short. In areas like retirement income and decumulation, the pattern is the same. Everyone is developing their own solutions, with bespoke tools, internal models, and unique guidance journeys. This lack of standardisation puts strain on providers and makes the experience inconsistent for members.
Imagine if, instead, we pooled knowledge, worked out what good looks like, and built one or two great defaults. Retirement income defaults that could be used, adapted, or adopted across the sector. It would save resources, make administration easier, and most importantly, ensure members are not left with a lottery of different outcomes. It’s not rocket science, but it does require a cultural shift.
And maybe that’s the real issue. We’re used to thinking of ourselves as individual market actors, competing for flows and protecting commercial advantage. But pensions are, at their heart, collective products. They work because they pool risk, share costs, and rely on trust. Somewhere along the way, we have applied an individualised, competitive model to something that was maybe never meant to operate that way.
Yes, commercial protection matters. But is the current culture really necessary? Could we find ways to collaborate where it makes sense, on default frameworks and guidance journeys, even while maintaining healthy competition elsewhere?
Should we be trying to break the cycle? And if so, how?
Answers on a postcard please.
Leave a Reply