Schrodinger’s Pensions Reform

Neil Copeland

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Some of you may be familiar with Schrodinger’s Cat  . In feline terms it’s probably not as famous as McCavity, or even Mrs Slocombe’s pussy, but a couple of recent pension articles put me in mind of it.

I can’t pretend to understand the philosophical basis behind Schrodinger’s thought experiment – Descartes lost me at  “I think therefore I am”, but a tabloid summary would be as follows:-

Page 3 lovely,  Angie, 19,  from Ilfracombe,  says “A cat, along with a flask containing a poison, is placed in a sealed box shielded against environmentally induced quantum decoherence. If an internal Geiger counter detects radiation, the flask is shattered, releasing the poison that kills the cat. The Copenhagen interpretation of quantum mechanics implies that after a while, the cat is simultaneously dead and alive. Yet, when we look in the box, we see the cat either alive or dead, not a mixture of alive and dead. Poor little kitty.”

I don’t know what you make of that, but what it says to me is that

a)  there is something very, very, suspect with the Copenhagen interpretation of quantum mechanics; and

b)  Angie is probably a brunette

What I think it’s saying is surprisingly straightforward – in the real world, two completely contradictory things cannot be simultaneously true.

So what are we to make of two recent articles, one in the FT reporting economists calling for the almost immediate raising of the State pension age to 70 and describing the Tory proposal to move to age 66 by 2016 as too little too late, and the other reporting in Pensions News the view of the Lib Dems that moving to age 70 is too much, too soon?

I may be being cynical (again) but the economists’ opinions aren’t tempered by the need to be re-elected next year.

We need a root and branch reform of public, private and state pensions to establish how they can better work together to deliver people a decent standard of living in retirement. As we have noted before,  the current system is unsustainable.

The Pension Commission report in 2005 was lengthy and detailed, but its voluminous contents can be summarised in a small number of key points:

In future, everyone in the UK will have to:-

• Save more; or
• Work longer; or
• Get by on less; or
• Some combination of the above

This is not a  palatable message for many, including our legislators and policy makers, which may explain why we seem to be ignoring its implications four years down the line.

Finally, Schrodinger may have been a Nobel Prize winning physicist and friend of Einstein, but he clearly didn’t know a lot about cats. Reality tells us that the most likely outcome of his experiment is that the severely pissed off cat will  escape from the box, attack the experimenter and depart just in time for its severely lacerated tormentor to watch the hammer descend on the cyanide bottle, one inch from his nose.

I haven’t quite worked out what this means from a pensions perspective, but it doesn’t augur well.

Neil Copeland

Post by Neil Copeland

Director, pensions consultant and adviser to trustees and employers on all aspects of work based pension schemes.