Over the next few weeks the 25 or so Independent Governance Committees that jointly oversee the activities of the life insurers who manage our pensions will produce their reports.
The success of their reporting will be judged , I suspect, by a small number of interested parties. The wider world should be waiting. Their reports will be of great importance, their should be great expectation.
But I’m not holding my breath for the IGCs to produce the next public sensation!
A regulatory or a creative framework?
Within a regulatory framework discussed in previous blogs (search “IGC)”, there is considerable discretion for creativity. In terms of numbers, the IGC production will be similar to the show we get from Eurovision. The analogy can be extended – I expect to see
- some talent
- some absurdity
- a lot of mundanity
Reading 25 Chair statements (which I intend to do) will be as waring as sitting through Eurovision ; and I have no more expectation of seeing the world changed by IGCs than I do by the TV spectacular.
Will they all sound the bloody same?
I am not sure what the point of Eurovision was originally meant to be , it certainly doesn’t represent the state of the music industries around the extended Euro-zone represented. There are only two European countries important to Western music, Britain and Sweden (the latter responsible for everything you hear from Rihanna to Katie Perry).
As for the UK Life companies, there are only a handful left competing with the master trusts for the business of our 1.8 small and micro employers. But the fiery comet has a long tail that includes insurance groups owned by organisations such as Phoenix and Deutsche Bank as well as household names like Prudential and Zurich who decided to play stick, in the Government’s game of stick and twist.
So there is plenty of potential diversity for the IGC watcher ( I fear I may be a hen’s tooth). But, as with Eurovision, I may come away with blurred vision muttering
“they all sounded the bloody same”
– as I’ve done every year since I was a child.
I am convinced that Eurovision is actually organised around a small “talent pool” of session musicians who- like Santa’s little helpers – spend most of the years locked in a cave somewhere- coming out to rehash last year’s songs as the elves re-present the old present.
There appears to come a time when senior pension people accept their careers are over and – like rivers- diversify into a delta of small work streams ; non-executive directorships, independent trusteeships and (yes) places on the boards of IGCs. As I’ve explained in previous blogs, there is a limited talent pool of “experienced professionals”, who act as the session musicians. And there are a few Lulus the Cillas and Conchitas who act as Chairs. (Some of the Chairs seem able to represent multiple IGCs, something that Eurovision may have achieved – but not quite so blatantly!)
In practice everyone (even the Chairs) in Eurovision and a bit B-list and the same can be said of IGCs. Until we get some genuine A-listers fronting these IGCs, all our IGCs are (to a wider public) anonymous. I don’t know if this is their intention but I certainly hope that some of the Chairs will use their opportunities to climb to A list!
Dare we dream?
It would be great to have the real superstars of our national music heritage , fronting our entries. Imagine Van Morrison representing Ireland, Adele or Sam Smith -Britain.
It would be great (for pensions) if Richard Branson , or Martin Lewis or even our own Tom McPhail, had charge of an IGC. I am sure that the IGCs would get some profile with their members and we might even get them featured on TV. I’m not suggesting we’d get am IGC’s got talent but we’d want to know. With the best will in the world, the Chairs of our IGCs are not household names.
I dream- I have a vision that we can restore confidence in pensions- and the IGCs are a part of that dream. Over the past few weeks I have been meeting Chairs and members of IGCs – and explaining how I think they should present their reports and offering to hope to promote their work.
If an insurance company were brave enough to put Geldof in charge of the IGC, I would applaud! He could do a great deal of good.
Things can only get better
The first reports will have the advantage of novelty but the disadvantage of having very little to say about the insurers which are being overseen. There is little or no data to tell IGCs what their funds are actually costing their members let alone where costs are being incurred.
As the IGC chairs have signally failed to establish a common framework for reporting value for money, we will hear a number of songs, all in different keys and played on different instruments, getting to a view of which insurers are doing well and which badly will be all that impossible.
But this is part of the process (sorry “journey”). We need to fail to succeed and I have low expectations at this stage. Whether we get grandstanding from some IGCs, or snivelling supplication from others, I am confident that we will get examples of good practice coming out of a year’s work (and a lot of fees paid).
From the 25 exhibits that we’ll be presented with in April, we will probably find a common way forward, something from every IGC of which we could say
“that was done well”
And around these shards of brilliance, extracted from the dross, we can build a model for the future.
I am focussing on the work of IGCs, since IGCs are accessible and open to scrutiny. At the same time as IGCs are beavering away, so are the Chairs of large occupational pensions. I was on a webex with RSM yesterday and saw the questions that were coming in from the Chairs of these schemes, they are doing the same work.
The main difference between the two (other than accessibility) is that IGCs are generally well-funded and full time, while the work of the Chairs of Occupational schemes is usually voluntary and fitted around a lot of paid work.
I hope that the odd Occupational Scheme will show the IGCs a thing or two, but I suspect that the raising of standards will generally be from IGCs to Occupational Schemes. IGCs really should be (for the time and money that they’ve had) our centres of excellence.
For all my joking about Eurovision, I am deeply serious about IGCs and the Governance of our savings in general. At the moment, I am an observer, but I hope as I reach that tipping point where I “delta” my work, I can be more directly involved. But for now, I can sit as Lear’s Fool and try to keep the show on the road.
I want to see a diversity of people acting on boards and I want to see a variety of approaches to Governance and the communication to members. But I want the direction of travel to be to a single destination- better member outcomes.
We need IGCs to help us determine what makes for good (value) and what we pay for it (money). In the murky world of pension provision, we need IGCs shining lights into the darkest corners to make sure we are getting a good deal on our savings.
Of course we won’t always do so, there will be injustices and much of the injustice is irreparable, the thieves have fled, the swag’s been spent!
But IGCs can make it harder for the thieves to prosper and easier for us to save and prosper.
Ultimately, the measure of success for these reports produced by IGCs in April will be based on the three Es
Engagement– will they get read
Education– will they help people to a better understanding
Empowerment – will they help people to a better standard of life in retirement.
The rest is vanity – the rest is dross!