It’s good to be able to report on the B&CE IGC. It didn’t get reviewed by me last year as I had forgotten that the Building and Civil Engineering Insurance Company insured workplace pensions in their own right and weren’t just the vehicle behind the People’s Pension – silly me.
Actually B&CE insure stakeholder pensions for nearly 500,000 people who worked or work in the construction industry. The average size of the pots is small (£1,800) and most of the Stakeholder Pensions are closed , but together, this group of workers has over £1bn of assets invested with B&CE’s State Street investment funds.
The good news is that B&CE – as usual, is investing in getting this group of people from the old stakeholder plan (Easybuild) into the new master trust (People’s Pension). The bulk of the IGC report concerns how and when this can happen and why it is in the member’s best interests. It is not just in the member’s best interests, it is in B&CE’s best interests, it makes sense to treat all customers in the best possible way and it’s clear that that is the People’s Pension way.
Having followed through the report a couple of times, I can see no jeopardy in this. B&CE have taken professional opinion (not ours!) to shift the money and it will move across to a new type of governance, a new charging structure and a new level of service from October this year. This is a major undertaking and one that B&CE are taking seriously. I am encouraged that it comprises Alan Pickering, a veteran of multi-employer schemes and a champion of pension rights. I’m also please that Steve Delo and Andrew Cheeseman are on the board, can I remind the IGC that females can also serve and that it would be good to have a couple on the IGC at the first opportunity.
I’m giving the IGC a green for the effective management of the legacy, if only because everything within the report suggests that they have been ensuring customers are treated fairly.
A bit of a slog
That said, the report is a slog. It says in fifty words what can often be said in five
Which could be better said
“So long as B&CE stick to the timeline, we won’t pressure them on Easybuilder charges, but if things slip – we’ll be on their case!”
If this report is written for the member and the member works on a construction site, which version is more suitable?
If Delo & Co want to take lessons in writing for their members, I suggest they spend more time on their sites!
I’m giving the report an orange for tone, which is suitable for a formal trustee report but is not targeted at the members of the scheme. The report begins
“We are here solely for you”
Put your mouth where the money is! I give the report an orange for engagement and tone – it could do better.
Value for money
All this talk about transition, has rather let the IGC off the hook about costs and charges, let alone about value for money. This was the year that B&CE moved from L&G to State Street as investment manger, a move I am still totally mystified by.
B&CE reinsure State Street (SSga) Pooled Funds and create unique funds with distinct charging structures. We get no idea of how the transition from L&G to SSga went nor how the move improved the value for money for members (if it did). The £2bn fund transfer is simply ignored.
So is the performance of the various funds offered by B&CE both relative to the market and relative to the underlying performance of the SSga funds and to the market benchmarks. The members are presumably not interested in this sort of thing though it’s hard to work out what the members are interested in as only 7% of members questioned out of 2000 responded and many of those responses were spoiled.
The IGC need to be strong on investments as neither the B&CE management or People’s Pension are showing any sign of disclosing what is going on within the funds or indeed in the fund transition structures.
I am going to give the IGC a red for its work on Value for Money, it simply isn’t good enough to ignore the issue and members of EasyBuild (as well as those who are trying to work out what is happening in People’s Pension (like me) deserve better.
Summing up – investment governance is a blind spot.
Although they get an orange and a red for tone and Vfm reporting, I don’t consider this report a train-crash. The work that has gone and will go on the rest of the year to wind up EasyBuild is good and – in as much as the IGC are involved – they must be commended.
I continue to have real concerns about the lack of disclosure on investment matters at B&CE and at Peoples Pension . Darren Philp got an earful from me yesterday and I am not going away. There needs to be a properly constituted investment monitoring team working for both B&CE and People’s and communicating what is going on to the same standard as we are used to from L&G, NEST, Aviva and NOW.
This should be a priority for an organisation that treats its customers fairly in every other way. Investment is your blind spot, B&CE – get some proper governance in place!
That’s part of TCF too!
You can read the report here