The one thing hapless savers stuck in Prudential’s legacy work-place pension books had going for them was that they had a strong IGC with an effective chair who spoke to policyholders with the authority of someone who was on that side.

Sadly the baton passed from Lawrence Churchill to Bruce Rigby in 2020, who – with the help of John Nestor maintained a standard of reporting that did Prudential credit.

Now Bruce has left and the new IGC chair is Pat Healy. Pat is an actuary and a former President of the Society of Actuaries in Ireland, he has been on the board since 2020 and has a Mercer background (like Bruce Rigby). If this was a good IGC report, I’d be prepared to overlook the lack of UK experience and Pat’s career being generally unconnected with  GPPs, but this is a poor report and I question whether Pat is the person for the job.

A poor report

The IGC is evolving, it is now having to engage with the Government’s VFM framework. This report does not. It is still using the template it established five years ago, the Chair’s report reads like a boiler plate to a trustee chair’s statement. It doesn’t even reference  the VFM framework and continues with Prudential’s bespoke concoction

Having had considerable experience dealing with Prudential in 2023, I would confirm that it was marginally less difficult than the Prudential of 2022 but that does not mean that the customer is getting value for money. Mary Kerrigan’s analysis of Prudential’s principal default Dynamic IV is that it only beats one benchmark, the ABI mixed investment 40/85 shares. There is no question as to whether this is the right benchmark nor any proper comparison of how this default (which only has 50% of the IGG’s customers in it) is right for savers. Performance charts are presented in an uninformative way (to the general reader)

Relative to the funds that savers into rival GPPs get their returns from, Dynamic IV is giving poor value for money. It certainly isn’t achieving the inflation +4% (3% net) benchmark set up by Churchill and what little information we get about the outside world is not shared in tables.

27% of money is invested in self-select funds; the report has little to say about this, how it came to be and what care is being taken to make sure those funds are still suitable.

Across the board, Prudential’s investment funds are simply not doing what they are supposed to

Mary Kerrigan is one of three actuaries on the IGC Board, there appears to be an absence of challenge to the way that the investment section is presented which has led to what looks like an actuarial report to the FCA or the Prudential Board, it make no sense to me or I suspect to less experienced savers.

To understand what these colours mean , we have to turn to the appendices of the report

The time to take action is now. I understand that Prudential has been swapping out Dynamic IV for passive funds run by BlackRock and was doing this over the period of the report. The IGC seems way off the pace.

Service

I had been looking forward to hearing from Paul Bucksey who has been drafted onto the Board this year (while remaining CIO at Smart Pensions). Unfortunately he got a page on communications which said nothing other than Prudential are continuing to push its clients towards self-service on the website. This is presumably because the alternative is to rely on customer service standards which are some of the worst in the idustry

I’m not quite sure how to interpret what I’m reading but if service areas are being told to target 43 days to pay a claim and if an average hold on a call is deemed acceptable at nearly 3 minutes, then there is something wrong.

The actual days/target days don’t seem to have much in common ; the tables tell us little in terms of achievement other than an appreciable number of death claims took 6 months or so to pay and that some claims were taking more than 43 (working?) days to pay.

This really matters. I hear numerous stories of people’s retirements being put on hold because of the tardiness of Prudential’s claims administration. Prudential administer most of the money purchase AVCs in occupational pension land and their service is notorious.

Conclusions

From start to finish, the Prudential IGC report is poor. It is failing to get to grips with the changes in VFM reporting and failing to speak to members or for members. I see no evidence in this report of proactive work by the IGC to make things better and the reporting we get is not of a standard to tell us if things are getting better.

Prudential’s service and investment proposition may have improved but this has been from a very low base. The charges on their workplace pensions are way above the market norm and the best thing that a saver could do , on reading this report, is accept that things aren’t going to get better soon and look for a new home for their money.

The composition of the board is weighted towards actuaries , there seems to be little diversity and frankly the re-use of the same template year after year tells me that this IGC is going through the motions. I give the report a fail, red for its VFM assessment, orange for its ease of reading and red for the lack of effort that seems to be going into improving matters for Prudential’s contract-based customers.

By the look of the numbers below, most of Prudential’s workplace customers have got that message already.