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Stewart Ritchie

Stewart Ritchie was first lauded by Money Marketing back in 1990 for saving the SSAS. At the end of 1989, it was almost curtains for most small self-administered schemes. The Tory Government’s Social Security Secretary Tony Newton had decided that SSASs would not be exempted from the 5 per cent self-investment rule.

At the time, Ritchie was president of the Association of Pensioneer Trustees, having convinced Scottish Equitable’s chief executive David Berridge that it was in the firm’s interests to have one of its actuaries involved in such work. It took two months to convince Berridge but winning the campaign took less time.

The APT had initially thought it was all a mistake but civil servants informed Ritchie that Newton had personally decided to refuse SSASs the exemption in his Commons’ statement in November 1989.

Ritchie says: “We realised we had to fight. Our backs were to the wall. If we lost this one, then the APT would effectively cease to exist and 90 per cent of small self-administered schemes would too. We organised the grassroots, got people to write to their MPs and got the media on side, including Money Marketing. It was a big campaigning story. The end result was that Tony Newton stood up on December 9 and said there was a exemption. Rightly or wrongly, I got the kudos.”

At the time, Money Marketing said it was how lobbying should be done, a responsible campaign based on the issues, where logic had prevailed.

Ritchie says the secret was to get as many letters sent as possible. The Prime Minister of the day, Margaret Thatcher, is on record as saying she assessed strength of feeling by the weight of the postbag.

The success saw ScotEq allowing Ritchie to forge a new kind of pension role – bringing actuarial skills to bear on lobbying, working with trade bodies and connecting with IFAs.

Even a casual glance at Ritchie’s CV shows that the role means he risks doing too much and he admits he left it too long in the 1990s before asking for help.

As a solution, the firm recruited the first in a series of experts in Steven Cameron, then Margaret Craig, now at the ABI, and, most recently, Rachel Vahey. Ritchie says he is grateful to them all, adding wryly that he reckons working with him does not look like it does any harm to people’s careers.

But at the time, it was a new type of role. “They pushed me into the external stuff, media, politicians, civil servants, trade and professional bodies and IFAs and there was real synergy. What you learned from the IFAs you could use with trade bodies and politicians and you could use the information you got back to give the IFAs a real insight into what was going on.”

He already had a good grounding. Having decided that a career as an actuary was a good one for a mathematician who wanted to earn some money, he joined ScotEq in 1972 straight from Warwick University, spending time as the firm’s London actuary as well as working as actuarial assistant to the pensions manager, the same Berridge who would later head the company.

Around this time, he got a salutary lesson about his own finances when he was moving between London and Scotland. He got caught out contracted to buy a house under the Scottish system while failing to sell under the English system as interest rates doubled between 1979 and 1980. Owning two houses and paying a bridging loan at an interest rate of 18 per cent was, he says, a formative experience.

Although his earliest lobbying success came under the Tories, Ritchie says he has worked most closely with the Labour Government. The fact that his local MP – Alistair Darling – went straight into the Cabinet in 1997 and subsequently became Work and Pensions Secretary is what Ritchie describes as “two enormous strokes of luck”. He also knew John Denham, an early Labour pensions minister.

In 1997, he was appointed one of seven on the pension provision group. The task was to paint the pension landscape for pension minister John Denham and was meant to take six months and produce one report. It met for three or four years and produced six or seven reports.

“Our legacy was to form the Pensions Policy Institute. You had to really work hard to produce that landscape. We realised that what you needed was an independent research body.”

Ritchie admits that being a technical adviser has given him some sleepless nights.

“They are the elected Government. Your role as a technical adviser is not to change Government policy. It is to help the Government achieve the policies in the manifesto on which it was elected. But, and it is a huge but, where you believe the Government is going to do something badly wrong, then, because of your technical experience, you are obliged to tell and warn them. Whether they will listen or not is another matter.”

He says he has delivered a couple of warnings recently although he will not be drawn on what they are.

Ritchie would not take pension policy out of politicians’ hands but says a permanent commission might carry out detailed, painstaking research. He says the Turner Commission’s big achievement was to lay the groundwork for raising the state pension age – something that was once seen as politically impossible.

“It is completely non-contentious because it was not a politician who proposed it.”

But Turner did not prevail in his argument about means-testing with the then Chancellor Gordon Brown. “They came out with a score-draw. The fundamental issue remains unresolved.”

He is also worried that a strapped-for-cash Government might turn to pensions as a way of raising revenue without causing immediate pain for the electorate. “It cannot be in the long-term interests of the country that pensions are seen as a convenient source of short-term tax revenue.”

When asked how he has managed to justify his role to the various Aegon finance directors over the years, Ritchie says he could not have achieved what he has without the firm’s backing. “I could not have afforded to be president of the Faculty of Actuaries without pay. I could not have afforded early retirement to do it. It was only because Aegon would continue paying my salary so I am extremely grateful.”

But he believes the firm benefits in all sorts of unexpected ways. “At the Grangemouth oil refinery where we had an official strike, at 10 o’clock on a Sunday night I got a call from the Scottish finance minister John Swinney asking if I would be an impartial pension expert in the dispute. The strike went ahead but we got favourable mentions in the Scottish Parliament and the Scottish press as a pension expert who works for Aegon. It is funny how these things can pay you back.”

Ritchie will still work as a consultant for another year, then it will be up to him and the current chief executive Otto Thoresen after that. The most pressing theme is clearly mean- testing, which is something that Ritchie has constantly warned the Government about in public and probably in private. “Whether they listen or not is another matter,” but it will certainly not be for want of effort.

To get Stewart Ritchie’s full view of pensions, a three-part interview with John Lappin is available on the Money Marketing website on – click on Money Marketing podcast

Born: Belfast, 1951

Lives: Edinburgh

Education: Royal Belfast Academical Institution, Warwick University

Career details: 1972-2008; from trainee actuary to pensions development director,

Aegon Scottish Equitable.

Industry posts: Fellow and honorary secretary of the Faculty of Actuaries; OBE for services to the pension industry, 2002; former chairman of the Association of Pensioneer Trustees; pension positions with the ABI and NAPF;

chairman of the Statutory Money Purchase Illustrations working party; part of the Pension Provision Group which reported to the Pensions Commission; founding council member of the Pensions Policy Institute.

Biggest lesson learnt: Changes in pensions take a long time to work through such as personal pension misselling, which happened in the 1980s and came through in the 1990s in a very painful way for all concerned.

Likes: Music. Catching up on reading.

Dislikes: As a car driver, I hate it when people do not indicate when they are turning off a roundabout. A lack of consideration. There is not much else that annoys me these days.

Book: The Gods Themselves by Isaac Asimov

Album: Beatles Double White Album. People forget it was a double LP, two discs either .side of the fold.

Career ambition: Basically, all through my working life I tried to do what people asked of me rather than having a goal. Goals are good to have but you have got to prepared to be knocked off course.

Future plans: I am staying on a consultant for Aegon for at least a year. I intend to travel, have joined the National Trust and aim to get fit, whether working out or power-walking to the supermarket.


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