Standard Life IGC report 2019 -defiant and unrepeatable

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Ahab strapped to the whale

Rene Poisson bows out as Standard Life’s IGC Chair with a 99 page blockbuster of a report – half of which is data analysis.

It emerges that not only are Phoenix appointing David Hare and the Phoenix IGC to oversee the entire Phoenix estate but that he will chair the Standard Life IGC as a separate entity.

The covers of the Standard Life 2019 IGC report are black , perhaps indicative of the mood of its chair.

This report bristles with frustration at a job only half done. It’s tone is defiant , it is a great testament to its Chair – it his his Moby Dick, he its Ahab.

The vision that Rene Poisson leaves behind him, is of an IGC community working towards a coherent series of measures established by Standard Life and Redington and more widely adopted by IGCs as a whole.

But this ambitious approach has not been adopted, Aviva report this year that they will not be participating in part 2 of Redington’s benchmarking service. It will be interesting to see if the Standard Life IGCs new chair will choose to adopt or reject the SLA/Redington approach.

As already intimated, I have huge admiration for this report which is both well -written and passionate. Though it is full of facts and figures, it is a very human document, imbued with Rene Poisson’s considerable personality. In tone it get a green – it is massively engaging, it is an epic read.


VFM assessment

The approach Standard Life has adopted is vigorously quantitative.  A long section of the report is devoted to an analysis of Standard Life’s default review

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The experiment with GARS has ended and the absolute return element of the default is being swapped for risk-returning assets. You can feel the sense of personal achievement in this.

Similarly you can feel the frustration that the Chair feels in not being able to report the money element in the VFM equation.

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That “not” is defiant – proxies do not coming naturally to a perfectionist

The VFM assessment concludes with a veiled warning to his successor

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VFM has been achieved with  huge endeavour. Overturn those proposals at your peril!

This level of personal conviction in a VFM methodology is unique and it’s going to be lost. It is rooted in a desire for better outcomes for members  and is quite admirable.

I give the report’s VFM assessment a green – it is a fine thing.


Effective?

Has the IGC achieved in its four years what it set out to achieve.

I suspect that its Chair would be the first to say it hasn’t.

There is a pognant section in the report where the statement talks of how people are drawing down the benefits of Standard Life Workplace Pensions.

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Less than half a percent of money drawn down is actually being taken as a regular income – or what we might call a “pension”.

A note that accompanies the table explaining the split between drawdown and other retirement options , includes annuities – which of course really are pensions .

The note admits that annuities are popular with those who have high average pot sizes because they SL Annuities are guaranteed annuities.

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These numbers testify to the failure of Standard Life to win the hearts and minds of its policyholders to its drawdown product.

Far from being effective as a post retirement tool, Standard life is being abandoned by over 40% of its policyholders with only a quarter of policyholders using Standard Life going forward.

As with the IGC itself, Standard Life has moved on to Phoenix. The great experiment has proved ineffective. Ahab goes down with the whale.

Though I think the report deserves a green for being effective , its intent is not matched by evidence. The job is left undone, the effectiveness rating can only be amber.


In conclusion

Standard Life’s IGC has been the most ambitious in its scope and intention of any. It’s intention to change the way IGCs operated has been stymied and we can expect to see a different style going forwards.

This report is huge, it is a whale of a report and its author signs off with a magnificent flourish.

I will miss Standard Life IGC reports and hope that we have not heard the last or Rene “Ahab” Poisson.

rene poisson

Rene Poisson

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Standard Life IGC report 2019 -defiant and unrepeatable

  1. Pingback: This new year – let’s know what pensions cost. | The Vision of the Pension Playpen

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