The  2021 L&G IGC  report cover, leaves us in no doubt as to what mattered most in the calendar year to 2020. It seems odd to be reporting on this over 8 months after 2020 ended and hopefully we will be able to look at Covid as a thing of the past by the time we get back to the usual schedule with the 2021 report being due next April.

The L&G report weighs in at a whopping 63 pages and that’s not counting the 48 pages of appendices. So what are we getting from a heavyweight report from an industry heavyweight?

There are a lot of pictures , all of purposeful looking people , presumably enjoying the benefits of an L&G workplace pension. We learn that the IGC split its activities between monitoring the workplace pensions that remain within their remit and shipping out what are called “Mature Savings” to ReAssure which is now part of insurance consolidator Phoenix.

As its name suggests, L&G’s mature book relates to older policyholders who bought into products which are rated inferior on the IGC’s VFM scoring scale. Every picture tells a story but why mature savings should be illustrated by a young girl in a woolly hat is unclear.

I am afraid that a lot of the IGC report is unclear. Why for instance does the mature savings’ European fund cost so much?

To make this clear, what savers think they are paying is an annual management charge for these funds of either 0.75% or  0.5%, but what they are actually paying in charges is 1.29% or 1.04%. These funds are reported on in the appendices without comment.

There are so many words in this report and so many numbers. References are made to the IGC’s investment adviser  but no mention is made of how such a fund can be adding value.

Unclear about Covid

I am an L&G policyholder with a workplace pension. I confirm that much of my pension can be managed online using my workplace work portal. I am far from being a vulnerable customer.

But when I needed to speak to L&G in late March 2020, I found I couldn’t because L&G closed its telephone lines to all policyholders.

The value for money scoring in 2020 remain unchanged other than a minor downgrade in customer service.

The IGC report skates around this alarming fact, alluding to problems but never pointing out that for weeks on end, L&G’s disaster recovery plan absolutely failed those who were frightened by falling markets and had no one to talk to.

This was not picked up in the April 2021 report and it hasn’t been picked up here. The downgrade in the service and administration score is the only evidence that this prolonged outage happened.

Here is my problem with this report.

In a year when L&G announced ownership of the workplace proposition from LGIM to LGAS, where ownership of the service proposition passed from Emma Douglas to Emma Byron and when many of its rivals responded to the FCA’s strong criticism of IGCs, this behemoth of a report leaves us with no clear understanding of what savers can expect for the future.

We are told , as if this is a matter for celebration, that

Looking ahead – members will soon be
able to request retirement lump sums
from their pension accounts online

It is astonishing that we still cannot do this today, having to request our money by phone (when it is answered) or through correspondence.

My problem with the report is that there is no external correlative – no benchmark – no measure of what other savers are getting.

Other savers can expect not just to access their savings online , but to spend them using a debit card.

A rambling behemoth that says very little

I have read a number of very good IGC reports already this year (and I’m only half way through). This is the longest, the least focused and the least easy to read. The only thing to keep the reader going is the vast array of photos.

My frustration is summed up by this statement on the AAF01/06 commissioned by L&G which clearly had a few matters in L&G’s internal controls that needed attention. Here is the IGC’s report

The 2020 audit identified a small number of controls that
have not operated effectively within the period. However,
these areas have proven not to impact significantly on
members and have allowed Legal & General to focus on
strengthening these controls

The language is convoluted but tells us very little. What was the point of informing us about the AAF if it could be dismissed this easily? As with everything else that I wanted to know, the IGC report swept the issue under the table.

Did the audit of internal controls made any mention of the telephony outage in March/April 2020? The answer is no , because the 2020 audit actually covered L&G’s activities in 2019. You can read the audit here (link taken from the ReAssure website).

Conclusions

I cannot give this report more than an orange for style nor can I give it more than an orange for effectiveness. I cannot  give it more than an orange for its value for money assessment. I just don’t know what to think, as I have been bludgeoned into submission by the weight of words and numbers.