Minister keeps heat on pension firms

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The Independent Online
In a stinging letter to the heads of the worst-offending companies in the pensions mis-selling scandal, new Treasury Minister Helen Liddell has reinforced the tough message she handed out to assembled bosses earlier this week.

The letter, dated 14 May, sets a series of deadlines for companies to meet. The first is 16 June, when she expects the chief executives of the 28 worst-performing companies to provide a detailed policy statement. "I want a statement that clearly sets out the policy you have adopted (including the resources allocated) in order to complete the reviews, and better the PIA targets."

Thereafter, she requests regular monthly progress reports. These will show how quickly the companies are moving to meet new deadlines set down by the Securities and Investments Board, the overall industry regulator, on Tuesday.

The monthly updates will, she says, be published "in the spirit of open government". The "name and shame'' policy is seen as a further measure to kick- start the derailed compensation process, which has been dogged by delays since it was introduced 18 months ago.

The SIB has given each company a new deadline, which in the most delayed cases extends to the end of 1998.

Most companies have said they are happy with the new timetable. The introduction of so-called guarantees was seen as a crucial element to allow, as one participant said, "a more broad-brush approach to the problem".

But Mrs Liddell's get-tough measures may yet backfire. The meeting on Wednesday was attended by chief executives from companies such as the Prudential, Pearl Assurance, and Legal & General. Many were annoyed at what one source said was "a new junior minister, with no experience of the industry, talking down to a group of senior executives". Her antagonistic approach may work against her in the long term, he warned.

David Prosser, chief executive of Legal & General, did reply to Mrs Liddell's 20-minute talk. He is reported to have said the issue was not the money, which had already been reserved by the insurance companies, but how it should be distributed.

The pensions scandal has seen 446,000 individuals identified as priority cases.

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