Peter Dorward keeps the flame for IGCs alight

Those who have followed this blog will know that I have charted the progress of IGC reports since the 2015 vintage (which were published the April after). At that time the workplace GPP was critical to choice of workplace pensions for those staging auto-enrolment. IGCs were forming strategies to bring together legacy books of business and the first stirrings of publication were afoot that would develop into “value for money”.

Now, ten years later, Royal London are the only workplace pension insurer open for new business without a master trust. People’s Pension may be classed an insurer but they did away with its stakeholder pension and put distance from its insurance roots with BC&E.

The insurers who compete with Royal London, Aegon, Aviva, Legal & General , Scottish Widows and Standard Life have eaten up many others and now champion themselves through their master trusts.

It is good to see Peter Dorward still promoting his IGC’s work and good to see he will have Colin Stewart. taking his place.

But I think we have little left to get excited about. Standard’s stalwart, David Hare – champion of a multitude of IGC reports (and the longest!) has retired and Lawrence Churchill, who has moved from Prudential to Vanguard has not been posting me his IGC as he usually does (now he is Chair of Vanguard’s).

The IGC resulted from a campaign by L&G (Tony Filbin) after the OFT’s damning condemnation of insurance company standards in 2014, to keep his and his peer insurers from further criticism. The OFT wanted employers to be protected…this is from their 2014 report.

The Pension Minister back then was Steve Webb who went on to work for a time at Royal London. Steve was key to establishing a cap on workplace pension charges , which ironically led to charges being so important to VFM, that and the OFT demand for transparency.

At the heart of the OFT’s report back then was reporting on transparency about the costs of pensions.

The world has moved on and value for money is no longer measured by the costs of a pension, although in practice , much marketing of workplace pensions is around the AMC – offered through the workplace pot. Now the interest is much more about the return to saver and the services offered to member beyond the pot. These will increasingly focus on how the pot is paid back as a pension (a retirement income lasting as long as the saver).

I will look at what IGC reports I can and judge them on their ability to promote the value for money (or lack of it) of the insurer they govern. In the 10 years doing the job of looking at the IGC reports I have found only one (Virgin) which pointed out the product was not offering value for money. Ironically in today’s market – it invested 100% of saver’s default money in UK Equities. Ironically, the calls today are for more than the 7% typically invested in the FTSE indices, to be sent there. This week there has been a call for it to be a minimum of 25%! Ironically, most people expect, want and are surprised not to have more of their money invested in assets that historically have given them poor value for money.

But I cannot devote the time to IGCs and their reports  that I have done in previous years because they no longer represent the best way to understand value for money. We are seeing reported returns from Corporate Adviser’s CAPA Index at Capa Data

New surveys are being set up to compare the applications offered by workplace pensions through Behind the login. AgeWage offers a chance to see how you have done net of costs by comparison using a Hymans benchmark

The kind of in depth examination of minutiae such as transaction costs is carried out by Dr Chris Sier’s Clearglass Analytics

It would be difficult to point to the IGCs or the OFT  for the direct inspiration of VFM but without the work put in by the IGC Boards, I don’t think we’d get as far as we have with VFM.

Here I can thank Royal London and its then CEO- Phil Loney who promoted AgeWage in 2018 when we were getting started. He was a fierce advocate of transparency and of VFM for all his policyholders. Here is the first ever Royal London IGC report through my reporting in March 2016.

Royal London may have a place in the history of VFM reporting, it was the first insurer ever to report through an IGC!

Phil Loney