Many financial institutions harboured hopes of becoming workplace pension providers only to fall by the wayside, close their doors and pull up the drawbridge on new business.
The personal pension policyholders were not transferred to be looked after by progressive organisations still in the market, but left in what are called “closed books”. These closed books of business have been traded in the market and it’s a struggle for policyholders to work out who is ultimately responsible for paying them back their pension savings.
Take General Portfolio whose policyholders will have found themselves part of GAN Life, Windsor Life and are now under the umbrella of ReAssure.
ReAssure doesn’t just own General Portfolio infact it’s IGC reports
There are 33 different products in ICG’s scope, nine of which are with-profits. These include policies originating from Crown Financial Management, National Mutual, Gan Life and Pensions, and HSBC Life (UK).
The IGC doesn’t have responsibility for Guardian Assurance’s policies which have their own Governance Assurance Arrangement (the IGC’s kid brother) set up by Pitmans but it will be part of the ReAssure IGC from next year.
The ReAssure IGC, as the name suggests, are there to provide reassurance to the policyholders of these 35 (6) life companies that they are still being treated fairly. Maybe the word “still” is exaggerating things, for this group of policyholders ( of which i till recently was one) have been treated, for the most part, pretty badly.
Almost all of the policyholders are “advised”, a euphemism for being sold. Crown Life policyholders might have had the pleasure of being sold a policy by the infamous Roger Levett in the dim and distant while HSBC Life policyholders were being sold policies by their own bank until quite recently.
But all policyholders find themselves now being treated in one way and that treatment is being watched by the five members of the ReAssure IGC.
What the IGC has done
The Chair of the Trustees is Zahir Fazal of BesTrustees and the other two independents are Giles Payne of HR Trustees and Andrew Parker of Law Debenture.
The strength of these three is in the oversite of occupational schemes and primarily of Defined Benefit Arrangements. This work is at the other end of the spectrum so they will have benefited from working with two executives of Reassure.
They have agreed an “action plan” with Reassure that will mean that policyholders who are paying more than 1%pa in overt management charges will have the opportunity to switch from a high to lower (0.65%) charging contract without giving up on policy features they purchased at point of sale (waiver of premium, life cover and other guaranteed benefits).
Some policyholders will have this carried out for them automatically but many won’t. They will be required to do something (e.g. take a decision, sign a form, post the form ). This is a little hit and hope and Zahir Fazal admits that the Committee are going to have to sit back and watch what happens in 2016.
I am not confident, many policyholders won’t have addresses that Reassure know about, many won’t open anything sent to them from a life company, let alone a life company they have never heard of. This enterprise looks perilous . might it would have been better to agree a default arrangement from which policyholders could have opted out?
What the IGC has not done
As you might expect, there are plenty of things that the IGC Chair’s statement is not covering , that I would expect a modern investment focussed workplace pension provider to cover.
There is no attempt to get beyond the overt charge to find what members are really paying
There is no attempt to work out whether the principal asset managers used by Reassure (Aberdeen and HSBC) are doing a good job.
There is nothing in the report about auto-enrolment and what there is about pension freedoms (though positive) is very vague.
I am not going to lay into Zahir or Giles or Andrew for not probing. ReAssure is not a normal life company and it has no interest in auto-enrolment
Any group or workplace pensions held with ReAssure will not meet the auto-enrolment requirements. If you think your scheme is intending to use a ReAssure scheme for auto-enrolment, you should contact your scheme administrator as soon as possible and let them know they need to make other arrangements.
If you are unlucky enough to be in ReAssure, your best bet is to get on the phone to them