One of the things ordinary people fear most about spending on their retirement, is giving money to institutions they know nothing about and having very little say in the management of their money. No matter how hard I used to tell my clients that their savings were their money, they didn’t get it.

Their house was their money – despite distrust of estate agents!

Their car and chattels were their’s – even if in those days the pawnbroker was their source of liquidity

But pensions were not their money, they belonged to insurance companies and once the money was gone, it was almost written off. This is one of the reasons we have – according to the PPI – over £20bn of unclaimed pension assets sitting in legacy pensions.

A sense of ownership

In order to own something, you have to physically see it – or know that you have property rights which you can trust. Pensions are not visible, tangible or – until recently – realisable for cash.

The pension freedoms gave people this sense of ownership, though it should never have come to it that to have a political win – Osborne had to destroy the very thing his Treasury had paid so much for – insurance against old age.

A matter of trust

Selling personal pensions in the eighties and nineties, I met many working class people and first generation immigrants with little or no trust for the pension system. The most common source of distrust was that they had no confidence they could get their money back.

This week we learned that the Pensions Minister has felt impelled to write to five pension providers who have been found guilty of taking up to 100 days to send people the money they’ve saved to the place those people have nominated as the new home for the money.

Forget the rights and wrongs, this is not DB to DC, this is not about guarantees or exit penalties or terminal bonuses. This is simply about the execution of a trade that transfers money either from one trust to another or from a trust to someone’s bank account.

Well done to Talya Mistri of New Model Adviser for following up on this story and nailing at least one of the culprits.. You can read her investigation here.

Breaking trust

Willis Towers Watson’s  Lifesight product holds itself out to be innovative and market leading. Fiona Matthews, its CEO and her management team are – as her profile tells us “passionate about good member outcomes”.

But they must accept that one of the outcomes that members consider “good” is an outcome that allows them their money back quickly, accurately and with good grace.

In a statement to NMA, a spokesperson for Willis Towers Watson, one of the five firms that Guy Opperman wrote to , says

‘We have been in correspondence with the pensions minister, and have supplied him with data. The differences between occupational schemes and personal pensions can lead to longer transfer times,’

Frankly this is BS and needs to be called as such. People’s Pension is an occupational pension scheme and has some of the fastest transfer times of any pension provider.

That is because it pays money to other pensions using the Origo Hub, which most of the large insurers subscribe to. I say “subscribe” because the service is not free and the extra cost of paying the money quickly is born by the provider from its margin.

WTW does not subscribe to the Origo Hub and has been called by the Pensions Minister for being a “late payer”. For whatever reason this is, it is not because Lifesight is an occupational scheme.

Why does this matter to Opperman?

Just what the  source of the data the Minister acted on is, we are not told, though it looks remarkably like he’s been scanning the Pension Bee Robin Hood index. 

Many will marvel that Pension Bee, an organisation that didn’t exist five years ago, can be considered influential. But they are – and for their consistent championing the rights of the consumer to have better rights over their property.

It is hardly surprising that Opperman is taking an interest in this. He is looking forward not just to a point where people trust pensions, but that they use a pensions dashboard to find out what they own and how they can get their hands on it.

In breaking people’s trust with regards transferring assets, the naughty 5 are also putting themselves in the invidious position with Opperman and the DWP of being likely laggards in the transfer of data to future dashboards. They are most definitely on the naughty step – not a good thing as they complete their master trust authorisation.

Breaking wind!

The bad odour left by the revelation that at least one major pension consultancy can run a master trust and think it can excuse itself for not giving people their money back for as long as 100 days is not going away anytime soon.

Frankly it suggests an organisation that doesn’t believe itself needing to apologise – even when it has been caught red-handed. We can only attribute this behaviour to arrogance.

Occupational pensions, especially master trusts, operate under trust and if they cannot be trusted to cough up our money on request , then they are breaking our trust. If their spokespeople cannot apologise and accept that they are at fault – they might as well be breaking wind.

the bigger picture