How the FCA entered the fray 18 months ago
I get a lot of requests on social media for help with pensions. Here’s an example from someone I have a lot of time for but who works analysing wealth management.
A correspondent sends a request
I’m just wondering, do you know what entity, if any, regulated government backed pension schemes such as the local government pension scheme and the teachers pensions scheme?
Henry Tapper sent the following messages at 7:28 PM
Correspondent follows on
It seems to me that without regulatory oversight members of these schemes, like members of TPR regulated schemes, have less protection than when they buy cat insurance.
I have been asked to consider starting a petition to get members more protection, ie so they are covered by the Consumer Duty.
With all the changes gov is proposing for schemes, it seems like members could benefit from a bigger voice and more protection. Not someone new, just the FCA or TPR.
Here is my response
There appears to be an assumption that Government is against you when it comes to pensions and that you need to drag in the FCA or TPR to protect people who are vulnerable.
This is a bad state of affairs. The Government is in the business of providing pensions for millions of teachers, local government workers and other public servants. For the most part, the money to pay these later life wages is executed well. A sister in law and a brother of mine are busy converting years of contributing to the teachers pension scheme to an income for the rest of their life. They may be a little confused but they are both very happy.
In both cases there are needs to consider reducing their teaching and a need for an ongoing income – at the very least to meet the inheritance of illiquid but expensive to maintain houses.
Suggesting that my brother or sister in the law needs “consumer duty” or protection from TPR and FCA is to misunderstand these pension schemes. The people who run them are not up for ripping off pensioners, they are here to help and if there is a problem then the people who run these schemes will be keen to hear and anxious to keep current and future beneficiaries of their schemes happy.
One of my heroes – Joanne Donnelly – has been in my mind this week. She is CEO of London Pension Funds. She is the most humble CEO I know, I know one of the people who chose her, he is one of the best people I know. I go to Local Government Pension events. I do not get the impression that there is anything but focus on the importance of members. I don’t always agree with how they are doing things but to suppose we need TPR or FCA involved to protect “consumers” is a mistake.
We need to remember that pensions were not always a means to create wealth for those who manage them. Historically they have been run as a way to make working something you can retire from with a replacement income.
The bureaucracy pensions should involve
“ We need to remember that pensions were not always a means to create wealth for those who manage them.”
Yes, that’s the heart of the issue.
The powerful lobbies have successfully captured and direct pension policy. And all of the agents / consultants/ adviser direct their business models and are incentivised to increasing their market share. None have any sense of responsibility for the growing of the pot.
If only there was some body whose sole focus was to promote and enhance the provision of ‘pensions’ for working people ….
I agree – they were also not designed to create wealth for those who administer and advise those who manage them. Lay trustees were traditionally unpaid and what administration that was necessary to fulfill the employer’s deferred remuneration promise was either done by or paid for by the employer.