Yet again, I hear the stamping hooves of another hobby horse getting set to leave the stable. I am sick and tired of the "pensions misselling scandal".
There are few circumstances which justify opting someone out of a perfectly good occupational pension scheme or advising someone not to join when they have the opportunity to do so.
Yes, I know it has happened and I agree that it should be put right. What I cannot agree with is the way that the issue has been mishandled by those who pretend such moral outrage and supposedly should know better.
The first intimations of alarm came to me a few years back, when I worked for Willis Corroon, during a meeting with SIB chairman Sir Andrew Large.
We met to discuss the KPMG report and it became quite clear that Sir Andrew did not know his transfer from his opt-out. OK, so he was the boss of SIB at that time and cannot be an expert on everything. (Definition of an expert: X is the unknown quantity and spurt is a drip under pressure). I did expect him to know the subject of the investigation he had commissioned, however, naive fool that I am.
Matters did not improve from there. Throughout the whole sorry tale, there has been a consistent confusion between those advised to transfer deferred benefits and those stitched up by poorly trained salespeople.
The regulators have further complicated matters with long involved debates over how compensation should be calculated. For a straightforward transfer of deferred benefits, there was a very easy way of doing this. Quite simply, calculate the current fund value needed to reinstate deferred benefits using the same assumptions as the transferring scheme did when it arrived at the transfer value.
I know this does not take account of any improvement in the benefits arising from fund surpluses or the sheer magnanimity of the average employer but neither did the scheme actuary when they set the original transfer value.
I did not see too many cheques flying around a couple of years later when the surplus or whatever came to light. Undoubtedly, the surplus would have arisen over a number of years, during which the transferee was a scheme member. If reinstatement costs do not include an allowance for this fact, we have another scandal on our hands.
Then there is the role of the Government in all this. Good intentions to provide people with value for money from so-called frozen pensions were conflated with a desire to save the future cost of Serps and the promotion of personal pensions as a universally good thing. The financial journalists – yes, the very same people now castigating the industry for its past sin – were not slow to leap on the bandwagon either.
Enter the regulators. With the exception of the banks, allegedly some of the major culprits but with the wit to be regulated directly by SIB and thus immune to fines, it is machismo time. Let us see who we can fine the most. Am I alone in wondering who actually foots the bill where a mutual is concerned? Could it be the poor old policyholder again?
Finally, we have the politicians. The epitome of honesty and integrity, they introduce naming and shaming. After all, it is unlike any politico to miss the opportunity of putting the boot into a soft target. Anyone tries to defend themselves and they are obstructive, revisionist scum.
Of course, the industry reacts with all the backbone of an invertebrate on the least said, soonest mended principle. But that does not mean a defence could not or should not be mounted, at least against some of the worst inaccuracies.
I am not saying that the industry is not responsible for its own actions and I am not trying to plead that the devil made us do it. I only want a fair trial. It appears to me that this was a God-given opportunity for every consumer Nazi who had ever been bitten on the bum by a rabid insurance salesman to get his or her own back and to hell with the facts. What seems to be a deliberate policy of obfuscation, making no public differentiation between a transfer of deferred benefits and an opt-out, is a scandal in its own right.
We all know that ignorance is no excuse but the majority of sins in this world are better attributed to stupidity rather than malice and this sad saga is no exception.
Ignorant salespeople, an ignorant public, ignorant regulators and ignorant politicians. In some cases, and I do not exclude our industry, ignorance is culpable. But it is not only our industry that is being punished. Undermining the public's faith in pension provision is hardly the best way of cutting down reliance on the state.
Which brings me back to transfers as opposed to opt-outs. Given the investment performance we have seen from UK equities and managed funds over the last few years, it seems highly probable to me, and please remember I am a naive fool, that the majority of transfer plans should hold up pretty well. Dear Gordon threw a spanner in the works with the withdrawal of ACT credits but surely we are not supposed to pay for that too?
Much of the problem lies in the inability of the industry to prove it had stopped beating its wife. Record-keeping, or rather its absence, lies at the heart of much that has gone on. This lack has hurt us, not only by reducing our ability to prove our innocence or guilt, as the case may be, but also in meeting the deadlines of the review. And yet, in all the Fimbra, Imro and Lautro visits that took place up until the end of 1992 and later, I have not heard of a single incident of pension transfers or even opt-outs being raised.
Thank goodness that regulators cannot fine themselves or we would still be paying through the nose long after we have all retired on our St Branson stakeholder pensions.