Letter: Complacency in the pensions industry

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Sir: As a response to the Maxwell pensions scandal and prompted by the highly critical report of the House of Commons Select Committee, the Government has set up a committee under the chairmanship of Professor Roy Goode, QC, to review the law relating to occupational pension schemes. That the Maxwell scandal occurred is an indictment of the system of law and voluntary regulation under which occupational pension schemes now operate; a system about which most professionals in the pensions industry have been complacent for too long.

The people who have suffered from the Maxwell and similar pension fund scandals are not the professionals who make their livings from running, investing and advising pension schemes, but the ordinary members of those schemes who have contributed from their pay, until very recently on a compulsory basis, in the expectation of a secure income in retirement.

It is ironic, therefore, that the make-up of Professor Goode's committee should be heavy with pension professionals and advisers and light on lay representatives of pension scheme members and pensioners. The committee as announced comprises two academics, a solicitor, an accountant, an actuary, an investment strategist, a Life Office chief executive, a retired investment manager, an industrialist and a freelance journalist.

While I have no doubt that all the individuals named are people of integrity and intelligence, they do seem, on the face of it, to be more representative of the hitherto complacent pensions establishment than the membership of pension schemes whose interests pensions law should protect. Noticeably absent is any representative from a trade union or pensioners' organisation who might be expected to have an understanding of the needs, requirements and expectations that ordinary members and pensioners have of the pensions schemes to which they belong but no professional position to protect.

What we cannot afford is for this review committee to close professional ranks and to come to the same conclusion as the Occupational Pensions Board did on its last previous consideration of this subject in 1989. At that time, the board, with the support of most of the pensions establishment, concluded that there was no case for reform. How wrong they were and how wrong will be the current committee if it comes to the same conclusion.

Yours sincerely,


Osborne Clarke

Solicitors & Notaries