Is the Times right to be rude about the NAPF?
Patrick Hosking is very rude about the National Association of Pension Funds in the Times today. He makes two charges. First:
Few have more reason to complain about the reckless greed of bankers, yet there has been barely a peep from the sector. The National Association of Pension Funds (NAPF), the body with the authority, credibility and firepower to make its voice heard, has stayed schtum.
This seems to me to be fair comment, and indeed we have already said roughly the same if more politely. But his second charge is wrong.
“it has conspired to water down the benefits of pension fund members. It successfully lobbied the Government to alter the law on inflation-proofing of deferred pension promises. This saves sponsoring companies money. But if Britain were to face even the mildest inflation at some point in the future, then millions of Britons would face a poorer retirement and would have the NAPF to thank for it.
The NAPF board includes representatives from the industry, but there is no director who could be described as purely representing pension fund members.With the vast majority of defined benefit (DB) pension schemes now deeply in deficit, there is a growing divergence between the interests of pension fund members and sponsoring employers. With defined contribution schemes rapidly replacing DB schemes, there is even more need for someone to fight on behalf of members, because employers no longer have very much interest in maximising returns and minimising costs.
But it is not the job of the NAPF to fight for the interests of pension scheme members in this way. That’s the job of organisations who represent scheme members. This may be news to Mr Hosking, but they exist. They are called trade unions.
But the Times is hardly going to argues for stronger trade unions – even if it is now clear that about the best way of saving a DB pension is through strong union organisation.