Ros Altmann (born 1956) is a UK pensions expert and campaigner. She led a long campaign on behalf of 140,000 Allied Steel and Wire employees and their families whose company pensions were jeopardised when the company went into receivership. She has also supported a campaign for people whose pensions were placed in peril by Equitable Life. Although best known for her pensions work, she is also a familiar figure on UK TV and radio and has written for most major newspapers on a range of financial and economic issues, and has twice been the recipient of the Pensions Personality of the Year Award. She is a governor and non-executive director of the London School of Economics. She was appointed as Director General of The Saga Group in October 2010. In 2011 her work as the "leading commentator on pensions and other matters affecting the lives of the nation's over 50s" was recognised when she was presented with the Public Affairs Achiever of the Year award.
Altmann attended the Henrietta Barnett School winning the Dame Henrietta Barnet memorial prize for sixth form achievements. She was awarded a first class honours degree from the University of London and a Kennedy Scholarship to Harvard University where she met both Mervyn King and Larry Summers. She received a Ph. D from the London School of Economics for research into poverty in elderly people.
A senior investment management role at Chase Manhattan, running the Bank's international equity department in London, was followed by directorships at Rothschild International Asset Management and NatWest. Her work included advising on strategy for UK pension funds and funds established under the US ERISA rules, plus advice to central banks. A full-time job gave her insufficient time with her young family so in 1993 she became an independent investment consultant with clients including 3i group, BT, HM Treasury, Standard Life, the BBC, Sky and Channel 4.
In July 2004 Altmann was appointed by Lord Falconer, Secretary of State for Constitutional Affairs, to the Strategic Investment Board for a three-year term. The announcement cited Altmann's work on the Myners' review and her then current job as non-executive policy adviser to the Policy Unit at 10 Downing Street on investment, pensions, savings and annuity policies".
The campaign which "propelled her into the media spotlight" began in July 2002 when Allied Steel and Wire, part of the former UK nationalised steel industry with plant in Sheerness and Cardiff went into receivership. Although their pension scheme was “fully funded” according to the prescribed UK government Minimum Funding Requirement formula, this level of funding was only sufficient to pay those already retired. The existing workforce, many of whom had very long service, would receive only their Guaranteed Minimum Pension, on average, about 40% of what they had expected. The BBC Panorama program asked Altmann to go to Cardiff to explain to the workers what had happened to their pensions. Altmann was the obvious choice. “She has vast experience in the field, having managed institutional investment portfolios for 15 years, including pension funds, insurance funds and unit trusts.” Believing that once the facts were established, the government would recognise its mistake and provide rapid compensation, Altmann set up the Pensionstheft Action Group encouraging members to lobby their MPs for compensation and write to local newspapers. She used her political and press contacts to ensure PAG appeared regularly in news bulletins and newspapers with the banner “Stripped of our pensions”.
In 2004, threatened by a back bench rebellion, the government set up the Pension Protection Fund to help schemes which failed in future. It also offered limited retrospective compensation via the Financial Assistance Scheme to those within three years of retirement, but the majority got nothing. The pensioners had expected much more and Altmann took four representative complaints to the Parliamentary Ombudsman, Ann Abraham. In March 2006, Abraham, published a report "Trusting in the pension promise" which found official information "inaccurate, incomplete, unclear and inconsistent". She recommended the government consider offering compensation for lost pensions and the suffering and distress caused. It was immediately rejected by Tony Blair.
In accordance with Parliamentary procedure when the Ombudsman’s recommendations are rejected, the Public Administration Select Committee examined the evidence. In July 2006 they published a report broadly agreeing with her conclusions. It was also rejected and Altmann took their case to solicitors Bindman & Partners. With Altmann's help, John Halford of Bindman's and barristers, Dinah Rose QC and Tom Hickman from Blackstone Chambers, all working on a no win no fee basis, prepared a Judicial Review. In February 2007 a High Court judge, Mr Justice Bean, found for the pensioners. He ruled that rejection of the Ombudsman's report was unlawful and irrational, and described the reasons for the omissions in the DWP leaflets as “minute textual analysis” of a kind that: “can in my view only give comfort to those who consider that it is unwise to believe anything one reads in a government publication. It is particularly ironic when applied to a leaflet whose back cover boasts that it has been awarded a Crystal Mark for clarity by the Plain English Campaign. PEC 3, especially page 15, gives the clear impression that following the enactment of the new law scheme members can be reassured that their pensions are safe whatever happens. I have no doubt that this is what it was designed to do. I agree with the Ombudsman that it was inaccurate and misleading.” The government appealed, and the case was heard by three Appeal Court judges in late July 2007.
Meanwhile, in the March 2007 budget the Chancellor of the Exchequer announced additional compensation for the Financial Assistance Scheme and a review to be carried out by Andrew Young to find the most efficient method of using existing scheme funds and any other appropriate finance. This reported in December 2007 after a delay but it eventually provided a level of compensation most commentators and pensioners thought was fair.
In February 2008, much later than expected, the Appeal Court delivered its verdict: the government was once again found guilty of misleading the pensioners and the constitutional position of the ombudsman was clarified. The government can reject the PO findings but must provide “cogent reasons” for doing so to Parliament, a simple difference of opinion would not suffice. The government announced it was considering appealing directly to the House of Lords, but in March 2008 it decided to accept the Appeal Court verdict. The campaign had taken over 5 years of continuous effort for which Altmann received no payment.
Equitable Life Campaign
Altmann has also supported the 1,500,000 the Equitable Life policy holders in their fight for compensation following pension losses blamed on inadequate government regulation of the company. Newspapers began questioning the adequacy of the company’s reserves in 1998 but the “Equitable Life scandal” became major news in 2000 when the House of Lords decided that the company had to honour its Guaranteed Annuity Rate promises. In 2001, close to collapse and now facing an additional £1.5bn shortfall met by raiding the with-profits fund, it put itself up for sale and stopped taking new business.
The Penrose report, commissioned by the Treasury in 2001, was finally published in 2004 after delays due to vetting by Treasury lawyers.
The report said that for a decade the company had promised its policy holders more than it could deliver. By 2000, the discrepancy had reached £3bn rising to £4.4bn following the House of Lords decision and included future profits which might not materialise. The non-executive directors depended on the Chief Executive and Actuary and were incapable of exercising influence. The Government Actuary department had failed to understand Equitable's returns throughout the 1990s. There was a lack of co-ordination between the DTI and the Securities and Investment Board. Whilst the DTI didn’t know how to assess Equitable, most of the blame lay on the company for failures going back to the 1980s. Penrose deemed the regulatory failures were secondary and the public expected too much of the regulators. The European Parliament also said the government had failed to regulate Equitable Life.
In July 2008 the Parliamentary Ombudsman published her report after a four-year investigation. Altmann questioned "whether the holes in our regulatory regime are due to a system driven too much by the interests of the industries being regulated, rather than the ordinary people who need to be protected". She also expressed her "fear that the Government could try to resist any calls for Equitable Life compensation in the same way that it continuously refused to properly remedy the occupational pensions scandal over the last 10 years".
The Ombudsman's report had been due at the end of 2005. Altmann, blaming delays on the investigated departments accused the government of deliberately acting slowly, and called for prompt compensation. In January 2009 the government announced “a paltry compensation scheme” to be paid to those “disproportionately affected” as determined in a report to be produced by Sir John Chadwick. Compensation is expected to be only a fraction of what was lost.
In May 2009, as the Parliamentary Ombudsman issued a "special report on unremedied injustice", Altmann asked "What is the point of Parliament appointing an independent adjudicator if ministers can simply keep on ignoring her decisions?” In July 2009, as Equitable Life victims threatened legal action naming the DTI, the Government Actuary Department and the FSA, Altmann again urged the government to pay up promptly.
An estimated 30,000 of the policyholders have so far died without compensation.
Money Back Guarantees
In the UK, the purchase of an annuity for those with private pension funds is compulsory. Wealthier people, i.e. those with a fund worth at least £100,000, can delay the purchase until age 75 using Income Drawdown to provide income. If they die early, their estate can keep the residue, subject to 55% tax. Altmann has campaigned for capital protection since 2002, arguing that drawdown provides refund guarantees that poorer people are denied. She believes that providing an immediate cash return, less tax, for everyone would enhance the reputation of annuities and encourage more people to take out private pensions. An additional benefit would be that those opting for drawdown purely for capital protection would have no need to take the higher risk.
Fees and charges
Altmann described the December 2013 Financial Services Consumer Panel (FSCP) report on Annuities as the “most damning indictment” of the annuity market she had seen. She added “It is failing a generation of pensioners. I have been calling for years for this to happen and I can only pray that now, regulators will be shamed into taking the action so badly needed in one of the last areas of financial services where rip off charges are still condoned.”
2008 Pensions Act and automatic enrolement
Altmann is highly critical of the UK's pension savings scheme, National Employment Savings Trust or NEST. She fears the advice will be inadequate and many lower-paid workers will be automatically enrolled into a scheme which will provide less than the means-tested benefits they would receive anyway. She doesn't think most people can save enough and says those entering retirement should be encouraged to work part-time so their pensions top up their earnings.
In her report "Pensions – Time for change" in October 2013, Altmann warned that the Act -under which employers started automatic enrollment in October 2012 -could expose workers to "risky, hard-to-understand and outdated retirement saving schemes." Workers with a defined benefit (DB) scheme were obliged to choose an annuity on retirement and "the risk of buying at the wrong time, choosing the wrong annuity or failing to find the right rate could increase the number of poorer pensioners by many millions." She said that the Government's reforms "require people "to be able to cope with risks that they do not really understand." Her views were followed the next day by a call from Prince Charles for a pensions industry 'fit for 21st Century'
Views on Coalition Government reforms
On her website (in May 2011), Altmann stated that whilst most of the "barrage of reforms" of the Coalition government are long overdue and heading in the right direction, some are hugely unpopular. In particular she queries whether some of the changes to public sector pension reform are fast enough given there will be strikes whatever the Government does.
Altmann has criticized changes to inflation protection on state pensions. In 2010 the coalition changed the basis from retail prices index (RPI) to the historically lower Consumer Prices Index (CPI) but introduced the "triple lock guarantee." This fixes the pension increase for the following April at the higher of either price or wage inflation if either exceeds 2.5%. Despite this triggering a 2.7% rise for 2014, Altmann pointed out that RPI had risen by around 3% so the old measure would have still been more beneficial.
Altmann is married with three children and lives in north London.
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