It now seems probable that more than 500,000 people were improperly persuaded to opt out of employers' pension schemes or urged not to join them in the first place. Instead they were conned by unscrupulous financial salesmen into buying a personal pension.
The cost is anyone's guess, but it will certainly be north of pounds 1bn, possibly pounds 3bn. As a financial scandal the affair dwarfs Barlow Clowes, Maxwell and Levitt added together and will probably match BCCI in scale.
The Securities and Investments Board, the senior City regulator, announced last week its plans to identify and compensate the victims (see our nuts and bolts guide on page 3). Quite correctly, SIB's priority has been to ensure that the wrongs are put right. But in doing so, it seems to have abrogated all responsibility for fingering the guilty and bringing them to book.
All its efforts have gone into designing a workable compensation plan. No thought has been given to how this extraordinary affair could have taken place under the noses of regulators, and identifying who was responsible.
This was not just a series of rogue incidents, a few bad apples giving the financial services industry a bad name. It was a systematic programme to fleece the unwary, sanctioned by very senior people. Some of the biggest and best- known companies in life assurance were at it. Whole professions and occupations were targeted, from teachers to nurses. Take the coal industry: 60,000 miners were persuaded to transfer from occupational schemes to private pensions; pounds 900m of their benefits were transferred. Typically, when a colliery closed, teams of salesmen descended on the pit village.
Rooms were hired, union officials recruited, special promotions devised.
It's hard to see how very senior management in life assurance companies could not have known what was going on. The logistics mean the marketing programmes must have been approved at the highest level. And the volume of highly lucrative business would have been inescapable to the most wilfully obtuse manager.
At best, senior managers turned a blind eye to what was going on. More likely, they helped orchestrate it, aided and abetted by ill-trained salesmen, hungry for commissions. As a result, hundreds of thousands of people have suffered needless anxiety. Some have had to make do with a smaller pension. Some have gone to their graves fearing that their dependants will not be properly looked after. Yet no heads have rolled. No organisation has been punished specifically for the mis-selling of pensions.
The worst any has suffered is a fine of a few hundred thousand pounds for non-compliance with the Financial Services Act - flea-bites to organisations whose reserves are measured in nine figures.
It's hard to find anyone in the industry prepared to express regret, let alone apologise. The statement put out by Allan Bridgewater, group chief executive of Norwich Union and chairman of the Association of British Insurers, in response to the SIB plan, was a masterpiece of buck-passing and complacency.
The rules on pension selling have now been tightened up. Systems have been changed. And new regulations on disclosure from 1 January should make things clearer to customers. But the fact remains that many of the ethically challenged people who allowed this scandal to take place are still in senior positions in our biggest financial institutions. That's the big sleaze story of the week.