It would be very easy to nod smugly from within the pension bubble where everything we do is out of fiduciary duty. But outside the bubble fiduciary duty is not a phrase that many people understand and certainly not something they associate with the way pensions work.

Patrick Jenkins has bought the mandation of the Mansion House Accord as one of the three thrusts of the Pension Schemes Bill but this is not the case. The Mansion House Accord is a voluntary agreement set up by a Conservative Government with the asset management industry to get a small amount of the trillions in funded pensions into under-funded parts of the UK economy.

But unlike its predecessor, the Labour Government has no trust in commercial pension schemes to play ball. What once may have been called fiduciary , is now commercial. We no longer have the majority of our pension money invested for growth. Pension schemes no longer invest in the businesses that they were their sponsors were listed with on British stock markets. Instead our pension schemes are owned by insurance companies, or consultants who themselves are generally owned by American private equity.

If I was in Government or advising those who were, I would say “pay no hide to the myth of fiduciary duty”, the primary duty of the trustees in “the new world” is to comply with the Regulator, act for the sponsor if DB or the provider of commercial DC schemes.

So when I read Patrick Jenkins homily to fiduciary duty, I would have him take a look at the pensions industry.

But it is the third big change in the rules — the mandatory allocation of pension investments into private assets, half of them in the UK — that is most contentious. Opposition, from the pensions industry and sceptical parliamentarians, dispersed after the government watered down the details. But the core targets remain: 10 per cent of a DC pension fund’s assets must be put into private assets, including 5 per cent into British private assets — as much as five times the current tallies, according to pensions experts.

These are what was agreed by the commercial leaders of the commercial DC pension schemes and Government. They have yet to move to fulfil the promises in full and that’s because to do so would require a reduction in the margin they can make on money invested for our retirement income. Investing in private assets is an expensive business relative to buying through funds that are passive and invest in easily tradeable listed stocks. Infact it is possible to use these funds at no cost to you at all, so long as the fund manager gets the rights to lend your stock to others and keep the fees.

To suppose that commercial financial service companies (the consultants and insurers who run our DC workplace schemes) are going to swap super-cheap index funds for difficult decisions to invest as the Mansion House Accord would have it is naive. Naive at best, for the most part the whinging about having to implement the Mansion House Accord has been out of commercial not fiduciary duty and the counterpart is not the member but the shareholder.

As I have written before, directing or influencing asset allocation can be done effectively via tax incentives. But to do so through mandation — even if Treasury minister and pensions expert Torsten Bell stresses it is only a “reserve power” — is putting this new law into conflict with the longstanding and crucial principles of trustees’ fiduciary duty.

This is a complete misunderstanding of how DC pension schemes make money to pay bills to those work for them, advise them and own them (where there are shareholders).

The most that a pension scheme can take out of member’s pots is 0.75% of what’s in there. If there’s a pay-away of 0.75% pa to a fund manager , then there is no money to pay anyone, so fund management costs must be way below 0.75%. But there’s plenty of money to pay everybody if the amount paid to passive managers verges on 0.0%.

Infact there has been a race to the bottom to get as much consolidation coming each commercial provider’s way as possible. The price war has been refereed by consultants who have done little till recently to argue for value for money. Right now VFM is being touted as the way to reverse the downward spiral to 0% asset management fees.

Bell and others have argued that aspects of fiduciary duty are already not being properly observed, because of an obsessive focus on cost, rather than value-for-money performance.

The 0.75% price cap on workplace pensions was implemented by Steve Webb, then a pensions minister like Bell and it was a very powerful curb on  excess. But that excess was not from trustees but from the owners of commercial DC schemes. Now we are at the other extreme. Either way the Government is having to interfere because workplace pensions are hard to regulate in favour of members and the country they pay tax in.