When it all began
Back in 2015 , when the IGC chairs first met, I wrote a blog critical of IGC Chairs and their advisers who seemed to be publicly questioning the purpose behind Independent Governance Committees. You can read the blog here
The IGCs had met at Eversheds apparently to work out what their purpose was.
Really good morning at @eversheds IGC conference. A question: who should we write the annual statement for? Members, FCA, someone else?
— Richard Butcher (@RButcherptl) October 28, 2015
I responded that the IGC was writing for the “member”, or more correctly the policyholder of saver.
What followed was an appalling series of tweets from senior lawyers, trustees and IGC members suggesting that IGCs should not challenge providers in IGC reports for fear of putting savers off saving.
Wind forward five years
Some 80 IGC reports later and the FCA report on IGC’s progress so far. Here are some edited highlights of the FCA’s Thematic Review The effectiveness of Independent Governance Committees and Governance AdvisoryArrangements
I have published appraisals of all IGC reports since 2015 and as you can see some IGCs report better than others. If you want to read any of my 82 IGC reviews – just use the search button above, they are all on this site!
As I did, the FCA found a mixed picture when assessing IGC reports. The FCA chose not to mention which IGCs were falling short (to the annoyance of the FT)
but were quite clear that some savers had been short-changed on value for money.
IGCs didn’t find a consistent way of assessing value for money, for all their conferences, savers had no way of comparing one workplace pension with another
Nor did IGCs find a way to escalate concerns to providers or the FCA
Some didn’t even get so far as finding the information they needed to assess VFM
The FCA thematic review is damning, the IGCs aren’t generally doing their job and the FCA make it clear that they are going to have to start bench marking the VFM of their scheme against others .
In a companion blog to this, I will explore how this bench marking is going to work.
Have the IGCs let savers down with impunity?
Whether heads will roll as a result of the IGC review is open to question, Most of the Chair and their boards have been in place five years and natural turnover would be expected. Some of the really bad IGCs have been disbanded as a result of insurance consolidation and I hear of more changes over the summer months.
But for those Chair who remain, it looks like the FCA are going to be a lot tougher, especially in the area of value for money.
The image of the teddy bears picnic that I used to characterized the early days of IGC meetings has never quite been shaken off. I was not surprised that the thematic review was damning.
What matters going forward is not the vilification of IGCs of the past but the improvement in IGCs in the future. I am confident that the FCA have got the bit between its teeth on this . Read my follow up blog for more.