It is interesting to see how Australia pressing ahead with what we call Value for money or VFM.

I can see as far as Bac’s contribution page but no further but it’s far enough for the purposes of this blog. Sadly “subscribers only” for her stuff but it appears to be about pre-retirement which suggests a welcome shift in focus from “grow- grow-grow” to something more focussed on “live on and grow” which is where the emphasis must grow as a generation grows old.

It is interesting that consumers are being protected at this stage. As one frustrated Australian puts it

We might say the same for what the regulators are doing in the UK. NOW has remained the dud of all master trusts and the sooner Mercer (who now own NOW) take charge and promise members “Mercer” changer, the better. The problem is probably tougher than just closing NOW down (there are a lot of advisers involved) but we really haven’t heard anything about NOW’s failure in performance, service or breadth of office. They had to be pushed into offering a fund for Muslims when they took over a delivery company with 90% Muslim workers. I don’t suppose they’d have failed an Aussie test – if Alex is right – but I’d be worried if there were independent governance specialists around like Bec Wilson!

Actually the Australians are complaining about “self-investment” outside Super’s (different problem) but we could do with the same dogged perseverance and I thought we’d get it from IGCs.

Whatever happened to Independent Governance Committees in Britain?

The last time that the regulators came to grips with workplace pension regulators in Britain was over 10 years. At this point , two friends of mine who were senior at L&G, Tony Philbin had support up to the CEO to properly represent the consumers interests at L&G

This was through what were to be genuinely independent governance committees making sure punters got a fair deal. You don’t hear much about IGCs, I am still waiting for my first one this year but they don’t get a word in the Pension Schemes Bill or the workplace roadmap.

They have been sidelined as we look for a new regulatory measure which is to be Value for Money.

The impossibility of closing down pensions on poor performance.

The consumer, saver, member, policy holder – call them what they want have no way to properly compare what they have with others – not even with a constructed benchmark called the average fund. This is the case on the way up and on the way down. It is only the annuity which is measurable for results (and that has no measure of security beyond the PRA). I am not saying that annuities are in sticky shape, they’re not in terms of security, it’s just they don’t excite (witness the expression of relief when Osborne mentioned “freedom” in 2014).

What happens to crummy performers is that they get put in the legacy bucket and milked for fees while more acceptable alternatives are made available. Look at the way Royal London has turned round weak offerings from several small insurance companies and delivered a cracking service through advisers. It’s an example of an IGC which did a job (hats off to Peter Dorward and others). But let’s not suppose that “there’s no fatal flaw”.

My suspicion is that the regulator in Stratford (FCA) and the one in Brighton (TPR) are consumer facing in as much as they keep on top of master trusts and insurance companies working commercially in the UK to deliver workplace. But these companies, even NOW (which had good intentions but incompetent execution) and Options (which had nothing good going for it at all but at least is going) are being managed.

This was not how things were before the RDR and while the overseas crooks were raiding reputable UK pensions (starting with tax frauds and culminating in the BSPS fiasco in Port Talbot and Scunthorpe.

We have in this country got to the point where regulators are protecting most people from yesterday’s problems. Meanwhile new scams are here- on our phones all the time and we need to be vigilant.

The Aussie problem is the UK problem

But it does not mean we know a good pension from a bad. This is the problem in the UK as much as it’s the problem for Bec and Alex Dunnin. You can’t in the long-term all win in a commercial environment. People will want consolidation because in something as boring as pensions, people want to be one of a few of virtuous schemes that are as dependable as the State Pension but consistently outperform expectations.

If we only knew it, we’d accept that we have actually got there in accumulation. With the odd exception (NOW and Options) we don’t have much failing workplace accumulators. We have some that fail to attract new business (Scottish Widows Master Trust if you don’t count its parents staff scheme which is on its way), but the reality is that most of the bad stuff went along time ago (do you remember Prudential as a workplace pension provider?).

Regulators do not do anything more than make sure that the providers are behaving according to the rule book (compliance). They do not measure performance, explains who is winning or who isn’t. That is the job of consultants who charge a lot of money, money that is not available to the consumer or the small or medium sized employers. Which is why people like Bec Wilson ++ are shouting from the rooftop for a better way for consumers to make judgements on what to do with their retirement savings.

Frankly, right now DC savings on Aussie’s horizons should be lurking pretty big. With a state pension that decreases as wealth increases, it’s pretty important to the Aussie that the Aussie Super works for them (like this blog says “Making your Money Work as Hard as You Do!).

Bec is coming to the UK for the Pensions UK in October and I look forward giving it to us between our eyes. I hope to be doing something like that for British consumers

We need independent governance in the UK and VFM that is more than just box-ticking compliance, we want value for our money which is greater than the basis on which everything is judged. That benchmark currently seems to be annuities . If  the annuity is value for money  – forgive me – but WTF did we get excited about when Osborne opened his trap about “freedom” in 2014?