Why scheme members are key
Peter Scales is retiring as chief executive of the £3.5bn (€5bn) London Pensions Fund Authority (LPFA) and will leave the post at the end of the year. George Coats asks the questions
What was your first full-time job – do you remember what you were paid at the time?
I left school at 16 with a string of ‘O’ levels having failed to find an ‘A’ level course that suited the school – so much for client needs! In 1965, the choices were varied and I chose local government, my father’s occupation, as it offered a chance of professional qualifications and CIPFA became my route. Living in outer London, a job in the centre paid best and I started my career in the Greater London Council (GLC) finance department, a career that was to last for over 20 years. My first job was as a clerical officer in the borrowing and investments division, working on the investment records for the superannuation fund. Given the status of this role, readers will not be surprised to learn I was paid the princely sum of £500 a year.
What was the best piece of advice that anyone gave you career wise and did you take it?
I guess the best piece of advice was “don’t talk to the press”, but I foolishly ignored that! I’ve received so much good advice over the years that it is hard to pinpoint the best, let alone something that paid off. But I recall in mid-career, a sentiment from my then finance director along the lines of “clear up as you go and always look for the next challenge”. This was sound advice and I have tried to follow these principles throughout my career.
How did a nice person like
you become involved in a pensions career?
Who says I’m a nice person? And I believe there are a lot of nice people in the pensions industry. One thing I shall miss when I retire is the friendship I have enjoyed from many colleagues.
Sorry, back to the question. That early start in investments was soon replaced by a career in finance and accountancy. It was not until 1989 that I came back to the world of pensions. At that time, a new role offered not only an exciting challenge but a lifeboat away from a sinking organisation. Needless to say, I have found the financial side of pensions and investment in the public sector to be most satisfying and an area I have not sought to leave.
What was the most satisfying achievement during your career – and why?
I have been fortunate over the years to enjoy a number of satisfying achievements but I guess the most career defining has to be the creation of the London Pensions Fund Authority (LPFA) in 1989. Not my original idea I have to say, but one I took on from the London Residuary Body and, with the help of a number of ex-GLC colleagues, turned into a new and ultimately successful (I would say that) organisation. The satisfaction came from pulling together a group of some 120 people facing redundancy to form a viable working unit and organisational structure, working on the production of legislation to provide the governance arrangements and controls, and finding accommodation to enable the evacuation from County Hall.
And what was the worst moment in your career – and why?
Being given responsibility for my ‘worst moment’ preceded my ‘finest hour’ and that came with the abolition of the Greater London Council. This had been my life and career for over 20 years and at a stroke it disappeared. As chief budget officer then and under 40, I faced the prospect of looking for new work in a reducing environment alongside many friends and colleagues. At the same time, we had the unenviable task of managing the final months of the outgoing administration and the transition to winding up affairs, in the midst of a political storm. In the event, I am glad I chose to stay on. Back to that advice:clear up and look for challenges.
How would you sell a career in pensions to a prospective newcomer to the industry?
I would encourage anyone entering, though a career in pensions is nowadays quite difficult, particularly in the public sector. Pension administration is a complex process-driven operation, mainly using computerised processes.
The opportunities for professional progression are limited and the wider industry is shutting down much of the more glamorous side. On the investment side the opportunities on our side of the fence really are limited. But, and it is a big but, the career is an interesting and rewarding one if you are prepared to focus and stick with it.
What would you do differently?
I would probably do everything differently with the benefit of hindsight – great for investment strategy. Where I had a choice and looking back, I would have used management consultants less. Not that they didn’t offer good advice but I would prefer to have used more resources on involving the teams of people that work for me and training them to do the job in hand. Management fads and the current trend of ‘protect-your-back’ initiatives are enormous distractions.
Do you have any unfulfilled
Ambition is perhaps too strong, but my unfulfilled aspiration was to achieve a merger of the 34 separate local government pension funds in London. This would have created a super-fund in local authority terms of around £20bn last time I looked. But size of operation was not the issue, it was the ability to wipe out duplications, maximise expertise and skills and present a strong voice for London on pensions. To some extent we have sought to achieve this through collaboration and co-operation. London Pensions Fund Authority (LPFA) has operated a strong policy of acquiring third-party administration through agency contracts. LPFA has achieved a lot in this way but could have done so much more as a single fund for London. I still believe that, despite political obstacles, such a merger would deliver significant financial economies and operating effectiveness.
Are you retiring or are you
recycling yourself into some new role?
I am retiring from full-time employment and management, and after 40 years I think I deserve a break. I don’t want to give up, however, and I cling to an industry that has given me great satisfaction and enjoyment. I am keen to take up the challenge of trustee-type or advisory roles that use the experience I can bring to the table.
Your words of wisdom for those in the pensions industry?
Never forget that we administer pension schemes for the benefit of the scheme member – client satisfaction and service is something they deserve. On the investment side, be an active, responsible and long term investor. Be prepared with good advice to move away from the herd and prove the value of occupational pensions.