The point that JAFA is making is in  the comments section of Claer Barrett’s recent pension article

As Claer says, his frustration is that he has no way of knowing what his return on his investment is, let alone whether this compares well with what he could have got elsewhere.

Pension Schemes hide behind the mantra “past performance is no guide to the future” but your contribution history does infact reveal a lot about the risks you have taken over the years and whether they have paid off. Comparing your outcome with the outcomes you’d have got with other strategies allows you to see whether you chose wisely (or more likely had good or bad decisions taken on your behalf).

It may sit uncomfortably with pension providers that they can be called to account for their default funds (and for other funds offered on their platform) but if “fiduciary” means anything – it means taking responsibility as a “trustee”.

We are pioneering a system (agewage.com) where savers can access their data and share it with us, we will tell them by means of a score, how their pension has fared against the average pension and we will also give people like JAFA the actual internal rate of return achieved by them (rather than people like them).

But we are meeting a lot of headwinds

1. Most pension providers do not give you online access to your contribution data (L&G do – but you need to be persistent)
2. When you ask for the data in digital format, you rarely get what you ask for , making the cost of the calculation in terms of person-hours, very expensive
3. Many providers simply give up and never provide the information.

So we are making a thumping loss providing this service at a reasonable charge (we charge £5 per score ). We should not have to charge at all.

This information could and should be available on our pension portals but we have had zero interest in using our algorithm , (supported by Hymans Robertson benchmark indices) by providers.  When we put the simple idea of telling people their VFM to Government , the DWP dismissed it on the basis of their being insufficient industry demand.

Like many “innovations”, ours has been supressed and invested money remains “dumb”. So long as the pension industry is in charge we will not get dashboards, online performance and we certainly won’t be able to choose our pot for life.

We have to ask ourselves, how will savers like JAFFA get information about how they have done, as they get in Australia and could get in the UK?

The answer of course is to make it part of the DNA of the consumer duty – to tell people how they have done in a way that makes sense to them. I suspect that it will be the FCA who sit up and listen to people like JAFFA, they haven’t listened to me.

Our idea may be five , or even ten years ahead of its time. But that is only because the pension industry lags other parts of the open finance ecosystem by five or ten years.

There is a flipside to this. Complacency and a lack of transparency is coming back to bite the Post Office and Fujitsu. Keeping people in the dark about their money is not a good long-term strategy. There is a  risk  to doing nothing.

That is that people get so fed up with being shrugged off by the complacent providers , that they take some action. I was interested to read this exchange on twitter this morning which calls for me take arms against the City (more Wat Tyler than the Pension Plowman).

From the weekend @ft

Another disastrous outcome for someone approaching retirement.

Professional financial planners have been warning about this for years – but pension companies ignore it and continue to enrol customers.

Thanks @claerb for highlighting it. pic.twitter.com/tLZ7cEUPzL

— Alan Smith (@AlanJLSmith) January 27, 2024

Agreed – but who will be accountable?

A class action would be justified @henryhtapper

— Alan Smith (@AlanJLSmith) January 27, 2024

Thanks Alan, you are absolutely on the money. If people cannot get action from Government, or answers from their providers, will people will take their pension losses to the courts?