Listening to Kim Nash introducing her IGC report on Fidelity International’s workplace pension , I got one key message

I took a screen shot because this statement does not appear anywhere else – either in the summary or the IGC report itself. I’m not sure the assertion is grammatically correct . But listening to the monotone it wasn’t just a preposition that was missing, I missed enthusiasm for the task Kim had given herself. The video, like the report that followed was flat.

The report  uses the 2022  report template, a low-budget affair and is now a stripped down 31 pages the majority of which are simply text. I’m not a great fan of fancy pictures but I’d like to see some concession to design. We start with the theme – balloons which carry the narrative with short and pithy statements

Fairly soon, we start seeing some pretty clumsy captions

Value for Money gets a big balloon

but is this tautological statement a headline?

Pretty soon the bubbles stop saying anything at all

And by page 21 the pages have run out of bubbles.  The final four pages of the report tell us about the people who worked on it  before we are left with a blank page with Fidelity International’s logo on it. It’s as if the IGC are struggling to have anything interesting to say.

Apart from enthusiasm, this report lacks the numbers that allow us to see for ourselves what Kim is talking about. It’s like groping around in a half-lit room, you never quite see the full picture.

The last few pages of the report are pure narrative, the narrative is dull, I felt I was having to read not wanting to read. The whole experience was dull. Kim is normally a very fresh writer but this report is lacklustre in place and I give it an amber for tone and style.

A rather shady episode with the Fidelity default.

A large part of the report is spent discussing the likely improvement to member outcomes that will happen when the impact of the aforementioned “Future Wise TDF strategy” kicks in. This strategy should have been in place early in 2022 but wasn’t.

The IGC rather testily reports that the long heralded new default didn’t arrive on time

As we have noted above, the transition
to the FutureWise Target Date Funds
started in November 2022 and it will finish
in September 2023. This is why our report
focuses on the nature and reasons for
the changes.

November 2022 was not the most propitious of times for pensions,it being the month following the LDI crisis blew over. This means that the transition to Future Wise TDFs would have happened once the damage to Long Dated Gilts had been done.

We are given very little detail about what was sold and purchased. but we are told that the existing default was not good news for those close to retirement as 2022 went on.

We are acutely aware of the impact that
these events have had on the pension
balances of members closer to or in
retirement. We also acknowledge that
the performance of FutureWise for those
close to retirement did not compare
favourably with some other default
schemes during this period.

While the new FutureWise Target Date Funds strategy
(which members started to move to in
late 2022) would not have been affected
to the same extent, we recognise that
the transition had not begun at the time
members saw their pensions fall in value.

The severity of the falls in bond and gilt
values were unexpected in 2022, and
Fidelity took prompt and extensive action
to support members through this difficult
time, but we are disappointed the review
of FutureWise and its implementation did
not happen sooner.

What looks like having happened is the nightmare scenario that faced many occupational pension schemes, gilts were held to a point where they had been slashed in value and were then sold.

The report is very short on investment numbers. The only performance table is very light on what is being measured.

As regular readers will know, losing 12% of the fund in the year before retirement is far from pleasant but it’s made worse by the suspicion that had members been switched to the new default , a lot of money would not have been lost.

But at least Fidelity are telling us a little straight. Another life company had a similar issue and we have no idea of when the transition occurred.

Frankly this transition looks a little bit of a mess and the IGC has every right to be frustrated. Frustration however, does not get the money back. We could do with a bit more of the story.

I don’t get the picture of a fully engaged committee. It’s more a picture of an IGC Committee being delivered reports from consultants and internal research than one that is on top of the issues. The incident with the delayed transition to the new default suggests the IGC aren’t really acting as effectively as they or their policyholders would like. I give Fidelity an amber for its engagement with policyholder issues

Value for money assessment

The report talks a lot about value for money without actually saying that it concludes Fidelity does or doesn’t give it to savers in their workplace pensions.

The narrative of the IGC takes us through the usual areas of costs and charges, investment and quality of service without giving us much insight into what is going on (few numbers and a lot of words).

The concerns focus on details in communications with members , which are uncontentious. The big themes about making money matter, support for members with retirement choices and the ongoing future of contract based workplace plans don’t surface. Fidelity is one of the insurers with both a master trust and contract based workplace pensions.

Kim is chair of the IGC and of the master trust (as Ian Pittaway is for Aegon). This presents a conflict if Fidelity decide to prioritise one product over another. I know there is concern among many consultants over the prioritisation of resource for GPPs when master trusts are being promoted as the flagship product.

I want to know whether the value GPP policyholders get, matches members of the master trust and I certainly would like a lot more comparative information about Fidelity’s performance relative to the rest of the market.

In short, the VFM statement feels like the IGC going through the motions, not asking the difficult questions and rather letting policyholders down. I wonder whether Kim can really wear both hats and whether – after many years as Chair – she might consider handing on the baton before her second five year term comes to an end in 2025. For much of 2022, Dianne Day did indeed step in – while Kim was on maternity leave.

I give the VFM assessment a rather dull amber rating

Overall verdict

This is an ok, but only ok report that scores mediocre with me. Fidelity are a blue-blood investment house and it feels like  personal pensions aren’t their core business.

The IGC feels under loved and under resourced and I hope it gets a new breath of life soon because I’d like Fidelity to be pushing a few boundaries again.