Fresh off of pension funds in the UK turning in their worst annual performance since 1974 (See UK Pensions Dip Deep Down in 2002 ),PWC’s John Shuttleworth said the “roll-call of indictments is a long one,” as he rattled off a laundry list of perpetrators, which includes corporate management, actuaries, accountants, the financial services industry, trustees, parliament, the government, the regulators, pensions industry bodies, investment consultants and the media, according to a report by Investment & Pensions Europe.
“Everybody is partly to blame – although nobody is honest enough to raise their hand,” said Shuttleworth as he further elaborated on each responsible party’s misdeeds. For example, Shuttleworth says corporate management made a “truly reckless” concentration in a single asset class – equities. “Why was there so little investment in, for example, property? Indeed, why no insurance?”
Further, he launched accusations at actuaries for not understanding how to allow for the “time value of money,” asking “in what sort of fantasy world is it possible that the riskier the trustees’ investments, the lower their liabilities, the smaller the contributions that can be paid, and the smaller the investments that are needed?” Similar accusations were thrown in the trustees’ directions, saying they lacked self-awareness by not knowing the limits of their own knowledge.
Most unusual to find themselves in the pension funding cross hairs was the media, an entity Shuttleworth blamed for merely regurgitating the pension industry’s propaganda.