So here we are….
As Spence & Partners enters its 25th established year, Angela Burns takes a look at the changes in the pensions industry, and how Spence & Partners has evolved alongside them.
25 years ago I was wearing low rise jeans and pointy shoes, dancing the weekend away, barely aware that the pensions industry even existed. At that time defined benefit (“DB”) pension schemes were relatively well funded, but the landscape was about to change – increasing life expectancy, low interest rates, and the dot.com bubble burst of 2000 all factored in DB schemes becoming more difficult to manage.
Brian Spence, alongside David Davison and Neil Copeland founded Spence & Partners in the year 2000 (you are all singing Busted now aren’t you? ). Their vision was to simplify pensions. The founder of Mantle Mike Selby was helping them realise that vision and by 2010 Mantle is almost ready to hit the market. I remember joining in 2012, the team was 70 staff members strong, and I was part of the team given the exciting task of testing the initial calculations.
2010s: A decade of transformation
We started using Mantle in 2013, and the pensions landscape was a very different place. We had the 2004 Pensions Act, the introduction of The Pensions Regulator and the 2008 financial crisis, along with ‘lower for longer’ interest rates. All these things making DB schemes more costly with an increasing regulatory burden. Members now gained more protection from the PPF providing a safety net, should their pension scheme sponsor become insolvent, pension scheme related or otherwise.
Spence developed ‘The Spence Approach’ which audited schemes from the ground up to allow 100% automation and a better Trustee and member service through improved efficiency.
In 2020, Spence hit its 20th year and had grown to around 200 members of staff. It was an interesting year that had Tiger King, the Black Lives Matter movement, and something you may have heard of – Covid.
2020s: Navigating uncertainty and growth
The industry suddenly had a new challenge – operating in a global lock down. Markets reacted negatively to the pandemic and DB pension scheme deficits increased. Easements were introduced to allow Trustees to support employers struggling during the pandemic. As a member of the PPF panel we expected a material number of employers to become insolvent and our PPF teams to be very busy. The opposite happened – the grants and support offered by the Government kept employers going. It’s funny when things happen so differently to how you expect – much like the hoarding and bulk buying of toilet roll during that time.
Thankfully due to Brian’s love of technology and innovation Spence transitioned seamlessly from an office to home working environment. The industry, however, faced deeper questions: What would the long-term impact of remote work be? How would it affect learning, loyalty, and workplace culture?
2025: A bright future?
So here we are….2025….ready to celebrate a quarter of a century and ‘that’ mini budget which caused massive impact throughout the industry has brought us full circle. Higher interest rates and well-funded schemes (for the most part) have Trustees considering risk transfer options and the market for insurance solutions is extremely busy. We have a new DB funding code to manoeuvre and additional regulatory considerations around ESG and climate change.
At Spence, we are now operating in our ‘New World’ with Mantle. Offering Trustees an efficient service with significant risk reduction due to working under one system with no movement of scheme data, and live funding positions every day. We now have around 280 employees with exciting prospects of growth. Brian, David and Neil have stepped aside to enjoy retirement (or partial retirement!), and we have investment from Synova, a private equity firm that shares our culture and values and understands what we are trying to do and the value it brings. The future is exciting.
While the future is bright, I do have some concerns. I worry about the new generation working in a post pandemic world. Throughout my career I have learned a lot from listening to more experienced colleagues on the phone whilst in the office. Will people still form meaningful relationships with their colleagues or merely find the highest paid and most flexible working pattern? Can we still have fun at work? We are at work more than we are anywhere else – things risk getting very depressing.
Then there is AI. As a vocal hater of anything IT related and an open lover of the Terminator movies you can see why I have some reservations. Something that can help you and advise you on literally anything? How do we ensure people continue to actually learn? How do we retain our integrity? How do we protect ourselves from bias? Something to think about for the future, and the many challenges that I am sure are still to come.
When I thought about how to end this article, I asked a very well-known AI bot if it’s possible for AI to become self-aware and its response was that ‘it’s a very complex question’……worrying to say the least……Skynet is coming….
Final thoughts:
When you look back at the last 25 years, anyone working in the industry over that time should feel proud to have survived the countless challenges that have arisen. At Spence, we’ve grown and adapted while staying true to our core mission. The industry has never stood still, and I expect the next 25 years will bring new challenges – but if history has taught us anything, it’s that resilience, adaptability, and a little fun go a long way.
