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Can IGCs stand the test of
time?
1. The story so far
2. Defining “value for money”
3. Engaging with their audience
4. Empo...
The story so far
Lexis Nexis reports on IGCS 10/2015
Insurer Number of meetings so far Terms of Reference (downloadable
Aegon 3 NO
Aviva 2 ...
My unaudited assessments
Provider Effectiveness Tone Value For Money work
Mainstream insurers
Royal London
Prudential
Lega...
Defining Value for money
It seems easy enough!
The overall Value for Money offered by a Pension Policy can be assessed by
comparing the cost with t...
How have IGCs decided to measure it?
Performance
• Prudential
DIY Formulation
• L&G
• consensus
Consumer research
• Aegon
...
The balanced scorecard approach
Services
• What services
do members
receive?
How important
are the services?
• Weightings
...
How this can work in practice
Measuring “Money”
How Novarca use indices to measure VFM
Measuring trust -IBI Transparency Index tm
Show whether all asset management costs have been disclosed
Engaging with your audience
Are IGCs too conflicted to fully engage?
LEGAL&GENERALGROUPPLC
15
Pension Savings as “Slow Money” for
Infrastructure
Media City, Salford, and L&G Investment
• Indi...
LEGAL&GENERALGROUPPLC
16
Pensions Auto-Enrolment: Basis for Beveridge 2.0?
• “Europe accounts for just over 7% of
the worl...
LEGAL&GENERALGROUPPLC
17
L&G: Long term direct investments
•We continue to drive risk-
adjusted returns upwards
through di...
Empowering change
Top down- getting IGC’s to work
http://www.thepensionsregulator.gov.uk/foi/how-to-join-or-leave-the-group-
personal-pensio...
Bottom up – getting IGCs to work
– Football Supporters’ Trusts
• D Formal, democratic and not for profit
For fans to stren...
Can IGCs Stand the Test of Time
We’ve covered
• the challenges that IGCs face from:
• defining value for money,
• creating...
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Can IGCs stand the test of time?

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A presentation given to the Professional Pensions DC conference on September 7th 2016

Published in: Economy & Finance
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Can IGCs stand the test of time?

  1. 1. Can IGCs stand the test of time? 1. The story so far 2. Defining “value for money” 3. Engaging with their audience 4. Empowering change. Henry Tapper Director First Actuarial Founder Pension PlayPen
  2. 2. The story so far
  3. 3. Lexis Nexis reports on IGCS 10/2015 Insurer Number of meetings so far Terms of Reference (downloadable Aegon 3 NO Aviva 2 YES BlackRock 3 YES Fidelity NOT KNOWN NO Friends Life 5 NO Legal & General NOT KNOWN NO On request Phoenix 4 NO On request Prudential 5 YES Royal London 3 YES Scottish Widows 8 NO On request Standard Life 6 YES Zurich “numerous” YES Source Lexis Nexis Occupational Pensions October 2015
  4. 4. My unaudited assessments Provider Effectiveness Tone Value For Money work Mainstream insurers Royal London Prudential Legal & General Prudential Scottish Widows Aviva Friends Life Aegon Zurich Assurance Standard Life Asset Managers Fidelity BlackRock Legacy providers Old Mutual Abbey Life ReAssure Virgin Money Phoenix New breed SIPPs Hargreaves Lansdowne True Potential (due next week) Intelligent Money (promised)
  5. 5. Defining Value for money
  6. 6. It seems easy enough! The overall Value for Money offered by a Pension Policy can be assessed by comparing the cost with the benefit to the policyholder. Total benefits of Policy Total costs of Policy But-No consensus as to how to measure or benchmark
  7. 7. How have IGCs decided to measure it? Performance • Prudential DIY Formulation • L&G • consensus Consumer research • Aegon • Zurich
  8. 8. The balanced scorecard approach Services • What services do members receive? How important are the services? • Weightings applied VFM comparison Score
  9. 9. How this can work in practice
  10. 10. Measuring “Money”
  11. 11. How Novarca use indices to measure VFM
  12. 12. Measuring trust -IBI Transparency Index tm Show whether all asset management costs have been disclosed
  13. 13. Engaging with your audience
  14. 14. Are IGCs too conflicted to fully engage?
  15. 15. LEGAL&GENERALGROUPPLC 15 Pension Savings as “Slow Money” for Infrastructure Media City, Salford, and L&G Investment • Individual Savings are the basis of all institutional investment • Recognised by Commissioner Hill’s Capital Markets Union… • …and by George Osborne’s LGPS proposals • Digital and Data can pinpoint where a saver’s assets are invested… • ..for yield enhancement, local jobs and growth
  16. 16. LEGAL&GENERALGROUPPLC 16 Pensions Auto-Enrolment: Basis for Beveridge 2.0? • “Europe accounts for just over 7% of the world’s population, produces around 25% of global GDP and has to finance c.50% of global social spending... It’s obvious it will have to work very hard to maintain its prosperity and way of life” • Angela Merkel, German Chancellor *The Economist 1 June 2013. From the print edition Polling shows 18-24 year-olds are increasingly likely to see welfare as a personal, not a State, responsibility. Public-private risk-sharing offers a solution.
  17. 17. LEGAL&GENERALGROUPPLC 17 L&G: Long term direct investments •We continue to drive risk- adjusted returns upwards through direct investments in long dated real assets where the banks have left behind ‘white space’. Investment in housing and regeneration are economically useful for us, for the broader economy and socially useful too.” £15bn Placesforpeople: £252m,acquiring4,000homes, building7,000houses,50 year lease ThamesValleyHousing: £40m,25 yearfacilityenabling 500 affordablehomes Royal LiverpoolUniversityHospital: £429m rebuild EnglishCitiesFund schemesinLiverpool, Plymouth,CanningTown, SalfordandWakefield: over5.4msqftof mixed-use space,brownfieldland Transportand Logistics:£320m, maturitiesto30years Aberdeen international business park: £127m investment, 335,000sq ft office space CALAHomes: £210m investment(47%stake),further £200m forBanner Homes HydeHousingGroup: £102m investment 15 yearfacility Sentinel Housing: private placement (registered social housing provider in Hampshire) Universityof Southampton: £93m,1,104 beds,40 yearsincome MethodistCareHomes: £70m investment,30 yearlease MediaCity,SalfordQuays: £503m investment. 50% ownership PRSInvestment– 100s of newhomes £162m Leeds regeneration project:200acremixeduse site withpotentialfor7,000 homes £400m Cardiffcitycentre redevelopmentjointventure £200m Bracknell regenerationpartnership withSchroders
  18. 18. Empowering change
  19. 19. Top down- getting IGC’s to work http://www.thepensionsregulator.gov.uk/foi/how-to-join-or-leave-the-group- personal-pension-list.aspx your independent governance committee (IGC) or governance advisory arrangement (GAA) has assessed the GPP (or relevant GPP product series) under offer in year two, we expect the IGC/GAA report to include a statement relating to the value for savers in respect of the relevant GPP product series which confirms that it does not offer 'poor value‘ employers considering whether to use the GPP can easily obtain the most recent IGC/GAA statements
  20. 20. Bottom up – getting IGCs to work – Football Supporters’ Trusts • D Formal, democratic and not for profit For fans to strengthen influence over club With Government support (Industrial and Provident Societies) Responding to crisis threatening team’s future 140 supporters trusts in UK 100 supporters’ trusts own equity in club 40 supporters’ trusts have place on board
  21. 21. Can IGCs Stand the Test of Time We’ve covered • the challenges that IGCs face from: • defining value for money, • creating appropriate benchmarks, • improving their grasps of transaction costs • and boosting interaction between members and IGCs. Let’s put it to the vote – can IGC’s stand the test of time?

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