He’s taken on the pensions minister, his legendary roadshows draw thousands and his thought leadership is second to none. But mention the name Steve Bee in his home and you will draw a blank.
“If you talk about Steve Bee to my family and friends, no-one will know who you are on about,” says Stephen Bee, head of pensions strategy at Scottish Life. The Steve Bee who performs 100 times a year to adviser events the length and breadth of the country is as much a creation as any of the characters that populate the graphic novels of this pension guru cum cartoonist.
“It was a deliberate decision to create a personality that worked in the public domain,” says Bee, whose craft in delivering the dry subject matter of retirement savings in an entertaining and engaging way has made him possibly the most sought after pensions speaker outside of the War Cabinet. The black glasses, retro movie posters and rock music entry are all part of a plan to take pensions communication from death by powerpoint to stand-up comedy.
Some people are naturally better at public speaking than others, but Bee admits he has had to work at his craft, dying on stage and learning from his mistakes, to get where he is today.
“At any one time I have around 20 different eight to 10 minute pieces in my head that I can do off the cuff, without notes, in common language,” he says. “But that has taken a lot of work. When I first started doing this I would walk back and forth across London Bridge for hours practising segments until I had the words absolutely off by heart in the right order.”
It is a talent that has enabled Bee to contribute to the tortuous ongoing pensions debate in a way that captures complex ideas in simple English. Nowhere is this more apparent than in Bee’s opposition to the introduction of Personal Accounts and auto-enrolment without first resolving the means testing issue. He was arguably the first person in the industry to highlight the intractable problem that this country’s complex means testing issue poses to anyone forcing lower earners to save, making him an unlikely vanguard of the poorest people in the country and highlighting the dilemma facing anyone recommending pensions to low earners.
His role in this debate culminated with the famous ‘Battle of the Blogs’ with then pensions minister James Purnell, a series of exchanges that Bee cites as a career highlight. It also did wonders for the promotion of his own Beehive website which to this day receives more than 36,500 unique visitors a month.
Given that the Government is going full steam ahead with the introduction of Personal Accounts and auto-enrolment anyway, how does Bee see private sector group pensions standing up against a cheaper state-sponsored alternative? He thinks the impact of Personal Accounts will be akin to the introduction of Serps.
“I don’t think that advisers have got anything to worry about with Personal Accounts. If you think back to 1978 when Serps first came in it was a bloody good scheme. If you were running a work-based pension scheme then based on contributions deducted from salary you were in for a tough test to show it would offer better benefits. It wasn’t easy to get a contracting out certificate,” he says.
“Serps was a good product and it raised the bar. That is what is happening here. Employers can choose whether they have something they can live down to or live up to. Do you get any kudos for being in Serps? Of course not, so if you are going to pay into a company pension scheme you might as well have one with your company’s name on it. And I think that the large and medium-sized companies will probably understand that,” says Bee.
Bee sees the legal requirement for employers to enrol their staff into a workplace pension of some sort as a massive opportunity for corporate intermediaries.
“For the first time ever, in 2012 you will have to have a workplace pension scheme for every employee in the country. Advisers will be more necessary than they have ever been because employers, when they really understand the requirements that are to be put upon them, which incidentally haven’t been written yet, because they are going to be introduced through regulations, will want somebody standing between them and their staff,” says Bee.
“In fact Personal Accounts will not be the first compulsory workplace pension scheme. We have already got one and its called S2P and used to be called Serps. And what is happening from 2012 is that we will not have a compulsory workplace pension any more, we will have a voluntary one. It doesn’t mean anyone will play lower National Insurance contributions by the way because that is all being redistributed around to get these good outcomes for lower workers. So we are going to carry on paying the same National Insurance so some people will get better returns from the state system, but some people who are too rich to be classified as poor but too poor to be classified as rich will get worse outcomes.”
Bee describes the structural changes to state pensions as a flattened S2P, with Personal Accounts and exempt schemes filling the earnings related space in the equation. This change, he argues, will lead to less people having earnings related pensions in the future.
“Some people contributing to earnings related pensions today will opt out. So it has to be that after 2012 you will have fewer people accumulating earnings related pensions than now. This is where I started this argument with James Purnell all these years ago,” he says.
“When ministers say they want people to build up their own individual pots of money, you could achieve that by enforcing contracting out. That is something that Keith Joseph proposed way back in 1975. You don’t have to build the machinery of the Personal Accounts scheme just to achieve this. Personal Accounts is coming in because S2P is becoming redistributive. The trick is, redistribution won’t work with contracting out, so it has to stop,” adds Bee.
But whatever the Government’s motives, the changes are coming in and Bee believes corporate intermediaries will be able to make hay.
“I know this sounds like motherhood and apple pie and all that sort of rubbish but there is a role for advisers in educating people. And I do not just mean employers, who are the people that they normally talk to, but also the employees.
“You can get people quite excited about pensions if you speak to them about it the right way. Pensions is a brilliant idea. At its most basic level, the guy you work for will one day pay you not to go to work. That is a super idea. Everyone knows that, but no one knows how it works.
“Advisers have done a bad job, not just of not explaining the things in a way that grips people’s imagination, which I think can be done, but also in emphasising positives,” he says.
“For example, the switch from final salary to money purchase contract based schemes puts the risk on to employees, but I don’t see that as a bad thing. It means that over the long term you have got individual ownership of pensions. I like the idea of individual ownership of pensions. But where I think advisers have let people down is as people switch from final salary schemes to corporate GPPs they are also cutting the amount of money that is being put in, on average by more than half,” says Bee.
But it is the government’s interference in pensions that Bee finds most dismaying. The U-turn on residential property and the tendency to dictate product design to the industry have restricted pension providers’ ability to offer attractive products, in his view. “It’s an attitude of government, and we go along with it.” ncorporate adviser january 2009Bee’s life:
All about Steve Bee
“Getting the job at the Pru as head of pensions was a career highlight for me, I didn’t ever think I’d get to the top of that tree. The battle of the blogs was certainly a big moment too.
What is the worst thing the government has done to pensions?
“I think it is an attitude, and we go along with it, that we let them design our products. In the airline industry the government’s job is to make sure they are safe and there is a safe environment for them to fly in. They do not design aeroplanes.
What opportunities have been missed?
I would have residential property back in pensions tomorrow. If you look at Apple computers, people queue outside their shops to buy those things.
We think that can never happen with pensions but if they had allowed residential property people would have been queueing around the block for it. I could have bought a gite for a holiday home in France, and yes I might have used it for a couple of weeks a year, but I would have rented out because I would have wanted to get as much income as possible out of it. It would have created jobs for the swimming pool attendant and other local people and would have been better than spending it on government debt just so they can employ a load of people.
What do you do when you are not doing pensions?
Cartoons. I draw and write cartoons every day, usually from 10pm til one in the morning. Right now I’m writing the first ever graphic novel on pensions which will be published very soon. I have drawn cartoons all my life and always will.
A life in pensions
“I know this sounds a bit naff but you either try and get further and further up the greasy pole or decide to do what you’re good at”
“I was lucky at the Pru because they moved me around a lot, through pensions administration, corporate pensions sales, training and when they merged all their pensions businesses at the late 90s I ran a group of pension consultants, most of whom went on to become IFAs. In those days Pru had 410 offices and 15,000 sales staff and I swear I must be the only person who went to every single one of them.
“I have been on the road since I was 35. And I’m still doing it now. I worked on the big projects at Pru, including Egg and the China operation. But coming to Scottish Life I got the chance to effectively get my old job back going round talking to people.
“I know this sounds a bit naff but you either try and get further and further up the greasy pole or decide to do what you’re good at.
“Scottish Life have given me the Beehive website and we get 36,500 unique visitors a month, which for a pensions website I am delighted with. We have also had the roadshows. I am sure that other companies would keep out of our way while we were going round the country. I am required to do 100 presentations a year in support of our branches.”