Phoenix – an IGC that continues to set standards with another good report


Phoenix IGC chair- David Hare

Phoenix IGC has published its 2019-20 Chair Statement. 

To me this is a most important statement as Phoenix is responsible for administering the savings of most of Britain’s “legacy savings”. Although most of these legacy books don’t have much in the way of workplace savings (Phoenix has less than 100,000 workplace savers), the FCA’s requirement for IGCs to look after the interests of unadvised customers looking to draw their retirement benefits, extends the scope of the IGCs work to potentially millions of Phoenix’s customers.

Phoenix has recently announced it is purchasing the legacy book of ReAssure which itself is purchasing the legacy book of L&G. Consolidation of life office back books is continuing at a pace and is being driven by Phoenix. For a full list of Phoenix legacy books – use the scrolling facility on this link

Phoenix also owns Standard Life and the Phoenix IGC is now identical in composition to the Standard Life IGC. The Standard Life statement is also published and I will be reviewing it separately. Much of the structure and text is common.

Whether the two reports become one in time is up to Phoenix and the IGC, there is a strong argument for keeping the two IGCs separate, as Standard is primarily an open book – still soliciting new business while the Phoenix life books are primarily closed for new business.

Tone and structure

The IGC Chair Statements this year are being published in the midst of the Coronavirus pandemic. The gravity of the situation is recognised in the report both in the member summary and Chair’s introduction.

The Phoenix IGC statement is split between the bit the IGC think members should read and the much longer bit they might like to read, if interested. The bit you really should read is on the link at the top of this article

You have to click through to read the full 2020 Annual Report. using this link to read the detail. I found this approach worked well and meant that I could see the bare bones of the statement  on a single screen with multiple expanding buttons taking me where I wanted to go. This is a big advance.

In his  Chair’s introduction, David Hare focusses on the issue of “getting read” and focusses on the FCA’s new requirement on IGCs to monitor member communications

Screenshot 2020-04-05 at 07.03.02

Hare asks

.. is a document fit for purpose if it is not sufficiently engaging as to encourage readership by a significant proportion of scheme members, even if it contains all the right information?

I am pleased to say that I found the Phoenix IGC’s Chair’s statement encouraged me to read it, it was a rigorous read, often challenging and though-provoking. In terms of tone and structure I was impressed and give it a green – being the best accolade I can give it.



The acid test of a workplace pension is how it treats its customers – all its customers. I have had cause to call out Legal and General for failing its vulnerable customers , the same cannot be said of Phoenix. They continue to offer a level of support to everyone – both through well organised web-pages and through a live telephone help-line.

We appreciate your patience during these exceptional times. We’re following government advice on home working to look after our people so they can continue to give you the best possible service.

Our priority is to ensure we provide a telephony service to our more vulnerable customers and therefore if your need is not essential, we would appreciate it if you would contact us via the online enquiry form.

This is reasonable and validates the IGC’s statement that

We have been very impressed at the speed of planning and implementation of new operational processes, in order that all possible steps are taken to ensure at least the most important needs of customers (particularly the payment of benefits) can be met in even very extreme scenarios of potential Covid-19 impact.

Throughout this report there is evidence of the effectiveness of the Phoenix IGC committee.

  • Abbey Life workplace savers are paying too much in exit penalties – the IGC is challenging
  • The IGC reports a lack of visibility of how ESG considerations impact in-scope members’ funds, despite repeated requests from the IGC.t
  • The IGC notes the need to effect further improvements to annual statements and to extend the number of customers who can access MyPhoenix
  • The IGC used the Redington fund analysis system but found it largely ineffective
  • It highlighted that Phoenix is currently considering appropriate next steps for the Aberdeen property fund, which the IGC notes is also a higher charging fund (my highlight)


Performance reporting ; I found the sections detailing the performance monitoring of legacy funds thorough and the report pulled no punches. However, the performance reporting and analysis of fund charges , can only be a proxy to understand what value legacy savers got on their money.

The most effective way of benchmarking that, is to see what internal rates of return were achieved on individual pots. I will return to this theme in the next section.

Customer Service; I found the sections on member communication , tracing pensions , treating of vulnerable customers and member satisfaction surveys excellent. My own visits to Phoenix and conversations with their customer service people bear out the IGC’s high opinion of what is going on. I sensed the IGCs frustration that things were not moving faster on the production of simplified statements.

Costs and charges; with regards the IGCs ongoing struggle to get complete information, it looks as if Hare and his colleagues are getting there, but significant gaps remain, most particularly in getting the impact of ani-dilution levies. I have been critical of the FCA for what I called their capitulation on some matters of charge disclosure, having followed the process outlined in this document I now withdraw this criticism. I agree with the position adopted by David Hare, that current reporting is by and large proportionate.

ESG;  There is a long explanation of what Phoenix and Standard are doing to implement ESG principles into the management of its money. The report notes that Standard Life get the benefit of this work shown on its website while Phoenix is not reporting to its members. Certainly – looking at the Phoenix website, I can see little evidence of any work.

One caveat for the IGC

Phoenix is likely to be critical to the long-term success of the pension dashboard, since I large number of lost pensions will be in their books. I was pleased to see a section of the report looking at the (improving) picture on lost policies but I fear that though Phoenix generally knows who has what and could properly participate in a dashboard’s pension finding service, much of the information needed for policyholders to take meaningful decisions on legacy policies, is not available digitally.

I’d urge the IGC in 2020-21 to look at “dashboard readiness” as an ongoing project. To be blunt – the sooner all Phoenix policies translate to the Diligentia platform , the better.

Summing up the effectiveness of the Phoenix IGC in 2019- 2020, I give them a green, my highest level of scoring. This is an IGC that continues to set standards


Value for money

Here is the VFM assessment – cut from the Executive Summary

Screenshot 2020-04-05 at 07.24.07

I was pleased to read that the Phoenix IGC are prepared to change their ways of measuring value for money. This is happening already with the qualitative approach previously being adopted by Phoenix being supplemented by the more quantitative approach pioneered by former Standard Life Chair Rene Poisson.

But I am not sure that the current VFM assessment carried out by Phoenix or Standard Life properly passes Hare’s own sniff test.

…is a document fit for purpose if it is not sufficiently engaging as to encourage readership by a significant proportion of scheme members, even if it contains all the right information?

When talking of the IGC’s aims, Hare tells us

We are also keen to do what we can to help increase the level of engagement between customers and their pension

I need no second invitation. Savers want to know how their money has done, they want to know how it has done as their rate of return and they want to know how it has done relative to other people.

While Hare is keen to benchmark other areas of Phoenix’s delivery by way of participation in industry groups, the report does not evidence any work on benchmarking the experienced returns of savers, nor how these returns compare with other groups of savers (even Standard Life).

Until I see evidence of outcomes based testing , I will continue to criticise the VFM assessment of Phoenix as failing to engage customers with their pension and the report for containing all the right information but not getting read.

I give the report an amber for its value for money assessment. Notwithstanding this mediocre rating, I am pleased to see the strong words the report contains for fund managers taking two years to provide the numbers for the cost and charges assessment.

I am also pleased to see that the application of ESG principles makes it into the value for money assessment. Phoenix have clearly got a way to go on this and the relatively low score holds back the whole score from achieving 9/10.

No doubt Hare will be pointing this out to Phoenix management. There is much that a funds platform can do to engage members in the ESG management of underlying funds . I hope that David Hare will make sure that Phoenix incorporates market developments which enable transparent viewing of the underlying investments within funds and encourage member engagement and participation in the enforcement of ESG at stock level.

No doubt I will be pushed to turn that amber into amber with a hint of green but I will resist any such pressure until I see firm evidence that an outcomes based assessment is underway and that members are better engaging with all aspects of the VFM of their savings.

Phoenix Life

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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