Let your people go!
It looks like Aegon has backed down and agreed to treat its customers wishing to transfer to PensionBee, fairly.
This report, based on what appears to be a press release from Aegon, suggests that Aegon will release the 874 policyholders who they’ve trapped in their departure lounge for up to 214 days.
By any standard , Aegon’s behaviour has been reckless.
- Those stuck in the lounge have been forced to pay high charges for funds they no-longer want to be in. Financial loss will be quantifiable, Aegon are running severe risks of litigation – especially if a class-action is invoked from those who can prove loss.
- Nearly 41,000 people have watched PensionBee’s customer video explaining to potential customers how to leave Aegon. The video has been well-liked , even by Aegon’s senior management in the Netherlands
- Aegon’s UK management have messed with Aegon’s corporate brand, holding it up to ridicule on pages such as mine and in the financial press. They risk much wider coverage , should a national get hold of the story.
- Aegon’s behaviour should be of interest to the FCA; they have not treated customers fairly and at a time when we are trying to get better pension engagement with ordinary people, Aegon have contravened just about every unwritten and written rule in the book
- Aegon have shown up the timidity and lack of independence of their IGC which has done nothing to bring it to heel.
- Finally Aegon has shown itself thoroughly incompetent in its conduct of due diligence. If it cannot see a good’un like PensionBee, how could it spot a bad’un.
During the course of the 8 months that it has turned off the tap to PensionBee transfers, PensionBee has received a substantial equity injection from State Street. Did it not think to refer to that due diligence and ask itself why one of the world’s largest fund managers was backing the management of the organisation who’s integrity it was questioning.
In a report by Money Marketing, Aegon confirmed it will resume electronic transfers to PensionBee, providing it gets “personal assurances” from the directors of the company about key aspects of transfer process.
“We are seeking assurance from PensionBee that they always capture clear authority from clients to carry out the transfer, and that they provide appropriate warnings and information to customers to ensure they understand any features within their current policy which will not be replicated within the PensionBee pension.”
This ranks as one of the weakest climb downs in the history of financial services – “personal assurances”? Knowing the management of Pensions Bee I have personal assurance a plenty of their good intentions. I can also see that the customers who’ve been able to escape the departure lounge are extremely happy in the Pension BeeHive.
So what is going on?
Why should Aegon hold itself up to general ridicule, risk the wrath of the FCA, the pension press and most importantly its own stakeholders – it’s shareholders and customers?
I don’t know. I don’t know why the Aegon IGC have not intervened as they could, I don’t understand why BlackRock, which recently sold its DC platform business to Aegon (and which manages the greatest part of Pension Bee’s money) didn’t intervene.
I don’t understand why the FCA hasn’t commented.
I don’t understand why the start-up, is being bullied in this way and why Aegon cannot see how embarrassing it is to their staff, who are being tarred with the corporate brush.
None of this makes any sense at all.
In one sense, I don’t care much, so long as the 874 people in the departure lounge catch their flight in the next couple of days and buzz off to happier pastures.
But I don’t think we can just let this matter drop. It is time to hold Adrian Grace and his management team to account for the distress they have caused PesnionBee’s customers and PensionBee (which is also out of pocket over this).
If we think it is ok for Aegon to trap customers in the pension departure lounge, we presumably think it’s ok for others – including NEST – who frankly haven’t got a much better record, nor the various third party administrators running our single employer DC pension plans.
While they debate standards for the passing of data to the Pensions Dashboard, many administrators still haven’t got to first base when it comes to passing DC transfer values to third parties.
Aegon is actually in the Origo transfer network and so is PensionBee; there was no excuse for Aegon not to have treated PensionBee as it does the other members of the network and exchange monies with them as pension partners.
But most of the occupational DC pensions are not subscribing to the Origo pension service. NEST tell us that they do subscribe but only have a process to take money in – not pay money out!!!
In short, if we allow Aegon off the hook, then we allow a great part of the pension industry to assume that pots can follow members at the pace they – the fiduciaries dictate.
This is as ludicrous as the attitude of Aegon. Driving up administration standards for occupational pensions is as important as changing the customer care of some insurers.
Support PASA in improving transfer standards.
Fortunately, the rights of ordinary members of occupational pensions to first class administration are championed by an independent body for which I have great respect.
Margaret Snowden’s PASA organisation, which (among other things) campaigns for the rights of deferred DC members is holding a session of its conference in London on 13th February (next Tuesday afternoon).
Margaret (Princess that she is) has released a press release which tells us
“With GDPR, IORP II and Pensions Dashboard on the horizon, data management must be top priority for trustees and it is important that deferred members are not forgotten in this process.
Although active members may present the potential challenges for years to come, in actual fact, it is .. deferred members who pose the greatest number of current challenges for schemes.
Deferreds account for a huge proportion of overall membership and liability, so not giving them proper attention can lead to any number of problems. These might include transfer requests and concerns about delays, as well as poor data quality hampering de-risking activities for schemes thinking about the ‘end-game’
.“Our conference has been set-up to provide people with practical advice on how to better manage data and improve transfer processes, whilst looking at how new kinds of technology might improve the way deferred members interact with administrators and create a more positive process for all”
I think they’re talking mainly about DB transfers , but DC transfer processes are just as important.
Sadly I can’t make it , but I hope that some people reading this article will, and will ask
“why so many third party pension administrators do not use the Origo clearance system”.
If you want to find out more about the good work PASA does, here is the link to PASA.
If you want to register for the Conference, here is the registration link. I thoroughly recommend the event.