GEORGE Lee is back with a bang. Last Monday, the man who might today be Finance Minister — if he had only stayed with Fine Gael — threw down the gauntlet to the new pretender, Michael Noonan.
George presented Pensions Shock! — a gem of a programme on RTE.
After a period of political decontamination out at Montrose, George was set free. George socked it to the establishment, exposing Ireland’s rotten pensions industry. He asked the question why this cesspit of high charges, low performance and dreaded deficits had been allowed to continue unchecked by successive governments.
The Government has not detained the highwaymen pillaging Ireland’s pensions treasure trove. It has joined them. If insiders can pillage the pot, surely the hard-pressed Fine Gael/Labour regime is entitled to have its hand in the till, too?
George hardly mentioned the punitive 0.6 per cent pensions levy extracted from pension fund savers by the Government. He targeted dismal investment performance, high charges, hidden fees and pension deficits. The pension picture emerged as one of undiluted gloom. For everyone, except for a very few, very bloated, very happy pigs who have been feeding out of the pensions trough for decades.
Pension fund savers are the softest touch since innocent borrowers were fleeced by their friendly banks.
If the Government is not going to protect people’s pensions, then who is?
Thank God we have a Pensions Board. Last week, I rang the pensions quango to ask who protects Ireland’s pension fund members.
The spokesman was unequivocal. “We represent the members,” he insisted.
It was the only unequivocal response of the dialogue. After that, it was all downhill.
“So did you guys oppose the levy?” I asked.
“We were concerned.”
Indeed they were. They dispatched a mealy-mouthed letter with reservations to Social Protection Minister Joan Burton.
“What did you say to the Government?”
“I’d have to look at that.”
“So you were against it?”
“It’s not our place as a board to have that view. We would have to look at it in the context of the financial state of the nation.”
Mother of God. What high-minded guys these gents are. The nation first, the savers second. Their letter was disregarded. Indeed, Michael Noonan did not even bother to consult formally with them before imposing the levy.
Next, I asked if they had received a request to do an interview for George’s programme.
Well, actually they had. And, actually they had refused. Refused? Surely the protectors of the victims of the State’s raid wanted to voice their views?
The reason offered for their reticence was peculiar. The Pensions Board spokesman pleaded that the interviews were filmed in August, but the programme was not to be broadcast for six weeks. So it would be out of date.
A complete non-sequitur. I wondered what they had to hide.
Plenty, I fear. I had forgotten about all the skeletons lurking in the Pensions Board’s cupboard. I had forgotten what a sanctuary it had offered to ex- bankers, social partners and political favourites.
The Pensions Board should have resigned en masse when the pensions levy was announced. Instead they sat tight, offered advice (which was ignored) and continued to collect their fees.
I had forgotten, too, that the protectors of pensions are joined at the hip to the banks. Suddenly I recalled the identity of the man who was the last chairman of the Pensions Board. None other than Tiarnan O’Mahoney, Sean FitzPatrick’s heir apparent at Anglo Irish Bank.
When Tiarnan’s appointment was announced by the late Seamus Brennan, the press release eulogised him as having “spent almost 20 years at Anglo where, as a director and chief operating officer, he was instrumental in the considerable success enjoyed by the bank over that period and was responsible for building a funding base…”
We all know what happened to Anglo’s “funding base”. It evaporated even more quickly than Irish pension funds. After Tiarnan lost the battle to succeed FitzPatrick he went on to even greater things when he founded International Securities Trading Corporation (ISTC). His new outfit went belly-up, losing €865m — the largest loss in Irish corporate history. Nevertheless, he held on to his position as the guardian of Ireland’s pension funds until last year, long after the ISTC debacle. Were our savings in a safe pair of hands?
Similarly the last Pensions Board CEO, Ann Maher, retired in 2006 — only to pop up on the board of AIB. Ann was a director of AIB at the time of the bank guarantee.
Last year, Tiarnan handed over to Jane Williams, a far lower-profile operator; but a little research reveals that Jane has enough quangos in her cupboard to make presidential candidate Mary Davis blush.
Jane served as a member of the Forfas board for eight years, before being appointed CEO of the quango at a package approaching €200,000 a year. She was made a board member of Eirgrid, the State-owned electricity distributor (€12,000 a year) by Fianna Fail’s Noel Dempsey, and has served at different times as a director of the National Competitiveness Council, the Irish Universities Quality Board, the Tourism Council and various other private- and public-sector bodies.
Amid all those quangos, Jane fulfils the normal requirements. Jane is a member of the Institute of Bankers. She did a two-year stint working for BNP. She has no obvious technical qualifications to chair the Pensions Board, but nor did Tiarnan.
Jane chairs a 16-member board. It is one of the most absurd, top-heavy of all quangos. It is stuffed with political nominees, mandarins and social partners. Both Ibec and Ictu have places reserved for them. It includes a member of Friends of the Earth, appointed by the Fianna Fail/Green government. Many of the directors represent vested interests, which draw from the juicy pensions pot.
It is extraordinary that the Pensions Board did not offer Jane Williams or another board member to George Lee. They could have explained why pensioners were in such deep doo-doo.
They could have reassured the public on overcharging and underperformance. There is a nasty truth out there (dismissed by pension fund managers) that Ireland’s pension savers are being crucified by high charges and bad investments. George found that exorbitant management fees of 2.2 per cent could be the norm. Jane or her chief executive, Brendan Kennedy, could have punctured that myth in the programme.
They could have reassured us that our pension fund managers’ annual losses of more than 3 per cent over the last five years were an aberration. They could have told us why we should continue to shove savings into the hands of experts who have enriched themselves and impoverished us. Or could they?
Sometimes it is better to sit tight than to try to explain.
The Pensions Board has a lot of explaining to do. Like every other party in the pensions industry, it has its paws in the pot. It milks every pension saver for €8.80 a year to pay its overheads and its directors. Just like the Government. Just another levy. The fees of Tiarnan O’Mahoney, Ann Maher, Jane Williams and others have been paid by those marooned in the funds.
What a pity they refused to talk to George.