The pension fund industry faces tough times ahead.

The aggregate deficit of the FTSE 350 pension plans is a staggering £140bn with an overall funding level of just 77%.

Trustees are under intense pressure to fix the problem.

Companies are closing their pension plans to new members and, increasingly, to existing members.

Plan closures are a defensive corporate strategy to mitigate the risk of running out of assets before all members have

been paid their pensions. That risk is real.

For some pension

plans, this is a

realistic graph.

It’s a demographic time bomb...

...because Generation Y may end up having to support their children

and their parents (if they’re not paid their pensions).

Gen ZGen X Gen Y

- Born 1991 - 2006

- Now aged 3 - 18

- Facebook generation

- Peak income earning 2036 - 2051

- Live through online identities,

grow up early

- Live in the moment

- Kids of Gen Y

- Born 1961 - 1976

- Now aged 32 - 47

- Realists

- Peak income earning 2006 - 2021

- Sandwich generation between

Baby Boomers and Gen Y

- Will likely need to support Baby

Boomers (1946 - 1961) in retirement

- Born 1976 - 1991

- Now aged 17 - 32

- Fame and brand culture

- Peak income earning 2021 - 2036

- Technology savvy; global thinking

- No savings culture or propensity to

save for the future

- Will need to support their children

(Gen Z) as well as their parents (Gen X)

Some say the problem is that pension plan assets are falling.

Some say the problem is that pension plan liabilities are rising.

Multiple corporate insolvencies have added to the problem.

But another major problem is “governance”. Plans are operating in

Governance1.0, and it doesn’t work.

...in G1.0, the problem won’t be fixed.

1. We need more education to help us understand the issues.

2. It takes too long to make decisions.

3. Once we’ve made a decision, implementation takes ages.

4. We don’t have working relationships with enough Solutions Providers.

5. It is not always clear who among us is accountable for what.

6. It’s lonely being a trustee - it’s not easy to ask the community for advice.

7. Our consultants don’t always have all the answers.

8. It’s difficult for sponsors and trustees to get on the same page.

9. There’s too much information coming from all directions, and no way to sift it.

Ten senior Trustees told us the problems with G1.0. They outlined nine major issues:

So we built mallowstreet.

Then we took mallowstreet to 100 trustees or so, and asked them if they thought it was useful.

...and they said: It’s great!

is a powerful online platform that brings the pensions community together. mallowstreet puts pension fund trustees in touch with Solutions Providers, and it allows all members to

connect to each other and share knowledge.

We’re building the community now, and we’d like you to join. If you’d like to be part of mallowstreet, please register your interest.

We look forward to hearing from you!

- teamMackenzie Howe