ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

The pensions time bomb

Photo of hourglass
  • LinkedIn (opens new window)
  • Twitter (opens new window)
By Sir Brian Souter, ICAS President

11 January 2018

Main points

  • ICAS President Sir Brian Souter argues for the need to provide employees with decent pensions arrangements.
  • Sir Brian’s experience with his own company underlines the fact that sound investment principles should lead to healthy returns.
  • The current approach for pension funds to be heavily invested in gilts and bonds does not, Sir Brian argues, work in the best interests of either the employer or the employees.

Sir Brian Souter believes in rewarding loyal employees with a decent pension – but to ensure this happens current trends need to be revised.

As a young bus conductor I was shocked to discover a driver, who had worked for 51 years at Alexander’s bus company, was retiring with the princely sum of £50.

This was collected from his workmates, while the company gave him a gold watch in return for a lifetime of service. This made a lasting impact on me, and I have since been a firm believer that when someone has shown such loyalty to an industry they deserve in return to have some form of provision for their retirement. As an employer I have always tried to provide decent pension arrangements for my own staff.

Originally I was a trustee of the Stagecoach pension fund, but I felt this could give rise to a conflict of interest. I had my own definition of “ethical investments”, which at times could be at odds with the wider duties of trustees. The funds were invested solely for the maximum benefit of the workers and so I left the role to my then Finance Director, Derek Scott, who has since specialised in this area.

I am pleased to say that over many years those trustees have kept on investing using sound investment principles and avoiding the latest trends, including not following the herd with the current approach of over-prioritising in gilts and bonds.

Instead their more balanced approach has resulted in stable compounding returns delivering around 10% per annum (net) since inception in 1995, outperforming many apparently more sophisticated funds.

I believe the time has come to question why and how we can rectify some of these challenges.

As defined benefit schemes have closed down, I have been dismayed to observe the continued use of bonds to measure the adequacy and value of the schemes. Although this may have been right at the time of its introduction, this form of measurement has now become a bind as quantative easing brought about artificially low yields, with the resulting enormous pension fund deficits.

This has been compounded by the so called “flight to safety” by pension funds buying even more gilts and bonds and making their performances even worse.

I believe the time has come to question why and how we can rectify some of these challenges. In words that have been attributed to Albert Einstein, “The definition of insanity is doing something over and over again and expecting a different result.”

We also need to revisit the approach of future pension provision for our young people, and I hope my article, "Breaking the bonds", will help to generate debate on this important issue.

2-23-marsh 2-23-marsh
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: