It is not often these days that you find a solid company man who has only ever worked for one firm in a 30-year career but Scottish Equitable's Stewart Ritchie is one such man. But where usually such a long tenure would tie the personality to the company, Ritchie is more well known as the UK's premier mind on pensions – one of only a few “gurus” in an industry where original thinking stands out.
Ritchie himself has always been flattered by the title of guru and does admit, with a little encouragement, that he is proud of the impact he has made on pensions in the UK.
“But being seen as a guru does not confer on anyone the title of infallible. People should always form opinions from their own judgement and not suspend their critical judgement, ” he says.
But Ritchie's title of guru has by no means been obtained from fighting the wrong battles with incorrect opinions. For the last 15 years, he has been at the centre of many of the most important pension issues in the UK such as pension sharing in divorce and uniform illustrations for pension value.
In recognition of this, he received an Order of the British Empire in the 2002 Queen's Birthday Honours and is proud of the honour. “It is a very, very nice thing to have. Sometimes I still wake up and think to myself 'I have an OBE' and it is a very nice feeling indeed'.”
Unlike many who join the industry, Ritchie has always had an interest in financial services. He read mathematics at the University of Warwick and joined ScotEq as an actuarial trainee from university. He became the firm's London actuary in 1977 but he says the turning point in his career was in 1989 when, as the chairman of the Association of Pension Trustees, he had a “run-in” with the Government which was proposing changes in law that would “decimate” small schemes. “The Government left us with no choice but to fight,” he says.
Due to some quick reactions and solid strategy, it was a quickly won battle, with the Government doing a U-turn on the policy after only seven weeks.
Ritchie and the APT motivated members to write to MPs, secured the support of the press and targeted key politicians to get their point across. “I believe we developed the model for how financial services bodies should deal with Government.”
Ritchie says at the time he had problems convincing his chief executive at ScotEq that these types of action were of value to the company. However, after the decisive victory over the Government and the press the initiative received as well as industrywide recognition, it was clear that the type of work Ritchie was engaging in was not only necessary to the industry and earning ScotEq kudos, it also gave them a unique advantage and understanding of events.
From that point, Ritchie was able to devote more time to lobbying on industry issues and eventually became ScotEq director of pensions development.
He says the job has pretty much stayed the same for the past 10 years, with the remit of dealing with IFAs, the press, Westminster and Whitehall and the professional and trade bodies, all the while feeding information back into Aegon.
By the time Ritchie became director of pensions development, he was already quickly earning a name for himself as a pension expert and it was his Government lobbying and conferences with IFAs that attained him the rank of industry guru.
He thinks of himself first and foremost as a communicator but underlines the importance of technical understanding to underpin the message. He says: “We tend to operate in isolation in this industry so when there are opportunities to cross-pollinate, they need to be taken up. There is always something to be gained from sharing different viewpoints.”
Over the years, Ritchie sees as his greatest achievement as the implementation of the statutory money-purchase illustration – SMPI – which providers were obliged to introduce for their customers in April 2003.
Ritchie was chairman of the working party, consisting of actuaries and civil servants, which lobbied for and developed the SMPI and believes it has done “real good” for consumers.
“It may sound very technical but providing a uniform basis for illustration across pensions greatly helps consumers in understanding the value of their pensions and in saving, especially because the projection is done in real terms, stripping out inflation to provide a meaningful figure.”
He is also proud of his work in pension sharing and divorce. “I like to think that I had some influence on Government decisions.”
Over the past five years, Ritchie has worked a lot in China where Aegon believes there could be substantial business. He has worked with people at the highest levels of the Chinese government, helping them with the nation's pension problems. He says working on the problems of other countries gives you a different perspective on your own local issues. At present, Ritchie says China has three main problems – its ageing population, the youth migration from the land to the city and widespread moves from state to commercially funded pensions. “It is an incredibly unique and challenging situation at the moment that is also leading to great opportunities.”
Ritchie is also looking at challenges at home. He believes IFAs need to be aware of some dramatic changes coming in the future. “One of the biggest things at the moment is the creation of a new pensions regulator, announced in the recent Pensions Bill. This new regulator will have teeth and will use them on IFAs.”
Looking ahead to what could be done to improve the pension landscape, Ritchie says if he were pensions minister, the first thing he would do would be to create an incentive rather than a disincentive to save with pensions. “More and more, we are heading for a ludicrous situation where people are disincentivised to save. If something is not done about it now, we will have a pension crisis of enormous proportions.”
Born: 1951, Belfast
Educated: Royal Belfast Academical Institution; University of Warwick, Mathematics Career: 1973, Scottish Equitable actuarial trainee; 1977-80, Scottish Equitable London actuary; 1993, Scottish Equitable director of pensions development.
Career ambition: To make a difference
Life ambition: Remain happy and eventually enjoy a long, happy retirement Likes: Travelling, China, reading and keeping fit
Drives: Jaguar XJ