Pension grumbles are a perennial
There are complaints about the complexity of pensions throughout working life as people strive to make provision for the unforeseen years ahead and possibility of enforced retirement or semi-retirement when no income is available to the household. While employment has been a steady fact of life for many, the benefits of work pensions have only been recently appreciated and promoted as a ‘necessity’ for modern working practices. While the government realises it cannot force people to save towards a pension, they can expect those with a moderately healthy income to take care of their own needs and expectations at the end of their lives. For a huge number of workers this is simply not an option, given the paucity of their incomes and the expense of everyday living. There is now something like 8000 companies providing employers across Britain with pension schemes for their work force. Not all have kept faith with their trustees and delivered the promised plans. Public and Government concern to regulate pensions and shelter these valued savings has led to the creation of new regulatory bodies. For example, the Pensions Advisory Service was formed early this decade to manage the concerns of ordinary individuals about their pension options, and the Pension Protection Fund established specifically to deal with compensation for pension scheme members in the event their existing or former employers becoming insolvent.
The UK Government has also established a complaints forum giving direct advice to members of the public through the pages of their direct.gov website. So while the efforts of the government and community stretch with empathy towards a public now made more insecure than ever before by the loss of confidence in bank and financial institutions, the private pension has again become a topic of contention. The fact is that not a lot can be done to alleviate the pain of finding your savings dissolving before your eyes except to promote better practice in the future and promote realistic targets. It is hoped reforms will bring the whole work pension offerings in line with the reality of today’s economy and the expectations of the working community. It seems the UK citizens and their financial representatives have been duped into believing that the economy was unbreakable and fundamentally secure. It may take some time to win back public confidence since it seems shady and ill-funded securities have formed the basis of lending and saving for the last couple of decades and the savings regulators were no more privy to this reality than Joe Bloggs down the road.
Those who run pension schemes are legally obliged to follow strict guidance laid down by the very regulatory bodies that are now accused of not looking after the interests of the honest working public. Where do the public go to for help if those in charge of making the rules are seen to lack competence? Do they go to their government and demand change? Yes, it is the only current way to protect against future disappointment and the fraudsters. Anyone concerned that something is wrong with their pension or the way it is being handled should go straight to the government website or if they lack web access, go to their local Citizens Advice Bureau to straighten their issues and protect their interests.
Current law states that anyone selling pensions or giving pension advice must be trustworthy and must be authorised by the Financial Services Authority. The problem is that the FSA itself has come under attack in the not too distant past for overburdening banks and finance companies with regulatory bureaucracy. The same complaint levelled at the Police, the Social Services and the Health Authorities. We seem to be screaming for help and being offered not much more than the band aid. The threat of legal procedures has brought about stringent working practices designed to protect these institutions from bad press and the law courts, rather than focusing on our ability to deliver good and honest services to those who want help. It seems to be a sort of institutionalised paranoia. We appear to be diminishing our efforts at being morally competent by giving each public institution the heavy burden of self-monitoring through impractical and bureaucratic processes and procedures. Only in the last couple of weeks there have been moves by the Chairman of the FSA, Lord Adair Turner to reform the way banks view their capital resources, demanding a new view of capital assets behind risk investment. The press has called this a lightning attack on the City, but what Turner is promoting is a far broader ‘macro-prudential’ view to regulation, taking focus off regulating what happens from institution to institution and onto the much wider picture of the realities behind hazardous investment. At last a visionary has suggested a plausible way forward.
A failure to deliver on promises will in future no longer be treated as ‘unfortunate’ or a consequence merely of unrealistic expectations. It is believed now that failed bankers or company executives will be prevented from securing any other work within the finance industry. Our finance industries are under heavy review and with the public braying for blood, or at least compensation for their losses, these new strict controls have drawn the bottom line for most pension investors and savers. Banks and other financial firms are going to be facing fines and public censure by the FSA if they are seen to be failing to comply with new rules on pay structures, pensions, and bonuses. As Turner made a tough assessment of the shortcomings of the current regulatory system because they allowed the collapse of Northern Rock, Bradford & Bingley, HBOS and the Royal Bank of Scotland, the FSA chairman said too it might also want to oversee the pay practices of all the companies it currently regulates. The ten new principles set down concerning pay packages require firms to agree to keep, practice and maintain remuneration that is consistent with the promotion of effective risk management. So it seems the risk management that is so sought after and frankly expected to exist behind our savings and pension funds has to be put in place at the finance institutions themselves before there’s any hope these good practices will trickle down to public investors.
schemes are legally obliged to follow strict guidance laid down by the very regulatory bodies that are now accused of not looking after the interests of the honest working public. Where do the public go to for help if those in charge of making the rules are seen to lack competence? Do they go to their government and demand change? Yes, it is the only current way to protect against future disappointment and the fraudsters. Anyone concerned that something is wrong with their pension or the way it is being handled should go straight to the government website or if they lack web access, go to their local Citizens Advice Bureau to straighten their issues and protect their interests.
Current law states that anyone selling pensions or giving pension advice must be trustworthy and must be authorised by the Financial Services Authority. The problem is that the FSA itself has come under attack in the not too distant past for overburdening banks and finance companies with regulatory bureaucracy. The same complaint levelled at the Police, the Social Services and the Health Authorities. We seem to be screaming for help and being offered not much more than the band aid. The threat of legal procedures has brought about stringent working practices designed to protect these institutions from bad press and the law courts, rather than focusing on our ability to deliver good and honest services to those who want help. It seems to be a sort of institutionalised paranoia. We appear to be diminishing our efforts at being morally competent by giving each public institution the heavy burden of self-monitoring through impractical and bureaucratic processes and procedures. Only in the last couple of weeks there have been moves by the Chairman of the FSA, Lord Adair Turner to reform the way banks view their capital resources, demanding a new view of capital assets behind risk investment. The press has called this a lightning attack on the City, but what Turner is promoting is a far broader ‘macro-prudential’ view to regulation, taking focus off regulating what happens from institution to institution and onto the much wider picture of the realities behind hazardous investment. At last a visionary has suggested a plausible way forward.
A failure to deliver on promises will in future no longer be treated as ‘unfortunate’ or a consequence merely of unrealistic expectations. It is believed now that failed bankers or company executives will be prevented from securing any other work within the finance industry. Our finance industries are under heavy review and with the public braying for blood, or at least compensation for their losses, these new strict controls have drawn the bottom line for most pension investors and savers. Banks and other financial firms are going to be facing fines and public censure by the FSA if they are seen to be failing to comply with new rules on pay structures, pensions, and bonuses. As Turner made a tough assessment of the shortcomings of the current regulatory system because they allowed the collapse of Northern Rock, Bradford & Bingley, HBOS and the Royal Bank of Scotland, the FSA chairman said too it might also want to oversee the pay practices of all the companies it currently regulates. The ten new principles set down concerning pay packages require firms to agree to keep, practice and maintain remuneration that is consistent with the promotion of effective risk management. So it seems the risk management that is so sought after and frankly expected to exist behind our savings and pension funds has to be put in place at the finance institutions themselves before there’s any hope these good practices will trickle down to public investors.
Tags: private pension | private pension | pension advice | pension advice | work pensions | work pensions | pensions