The Pensions Rubikís Cube
It was something the National Association of Pension Funds (NAPF) said last week that got me thinking about this.† The quote I heard on the TV News was something along the lines of ĎPoliticians can damage pensions by not looking far enough ahead and not understanding the knock-on effects of what theyíre doing.í* or something like that.
When I heard that it just sounded right and for some reason led to me remembering just how difficult a time Iíd had years ago when first confronted with the Rubikís Cube I bought to take on holiday with me one time.† The cube, if you remember, is made up of nine smaller cubes on each of its six faces and each face of the smaller cubes is coloured with one of six colours; red; orange; blue; green; yellow, and; white.† When you first got the cube the six sides of it had the little cubes arranged so that each side of the larger cube comprised only one colour.† I donít know if Iíve described that right, but I would think you know what a Rubikís Cube is anyway so youíll know what I mean.† The thing is, once youíd messed up the original state by twisting the thing about a bit, not only were the faces soon a mass of different colours, but you could spend the rest of your life trying to restore the cube to its original state if you werenít careful.† After that holiday I threw mine away and just got on with the rest of my life, but it was the most infuriating thing Iíve ever come across.† On the face of it, it just seemed such an easy thing to do.
The thing is, it was relatively easy to get one side sorted out, the red one say, but that would then get messed up again the minute you started to concentrate on getting another side, like the green one, in order too.† What you needed to complete the whole thing was an overall plan that would work towards solving all six sides of the puzzle at the same time, and that was well beyond the understanding of normal people.† It was all so counterintuitive too.† Hard to see.† I did buy a book once that showed you how to solve the cube, but to be honest I didnít understand a word of it and I eventually sold that years later on e-Bay to someone who presumably had wasted years of their life trying to restore their cube to its higher state of entropy.† In that way I like to think I did some little good.
The puzzle of pensions in the UK is very similar, with perhaps six different sides to it too; state pensions; means-testing; final-salary schemes; occupational money-purchase schemes; personal pensions and; stakeholder pensions.† It seems to me that getting the whole thing sorted out, which is what the next round of pension reform is reputedly about will be the devil of a job.† Itís easy to see how any one particular side can be put right if it is looked at in isolation, but just as easy to see how that good work could be undone the minute you start concentrating on another aspect of pensions.† What we want Government ministers to do following the Pensions Commissionís report later this month is to come up with a plan that solves all sides of the puzzle at the same time; simply carrying on having a go at each side in isolation wonít ever get us anywhere, believe me.† Thatís how I ended up throwing my Rubikís Cube into the sea off the end of the pier at Walton-on-Naze all those years ago.
14 November 2005
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