Every good rugby team needs a full-back to watch for holes in the defensive line and, where breaches are made, to plug that gap – because breaches are inevitably made, even in the top teams.
This week our big story is about how Aon Hewitt has been working to correct problems in one of its defined contribution administration offices that have left thousands of scheme members off-track with their decumulation strategies.
For the company it is hardly good press. But it is encouraging that it has been open about the steps being taken to put these mistakes right, and to make sure no pension scheme members have been adversely affected financially.
Aon’s blushes may even have been spared by years of decent equity market performance.
Indeed, this work may show up how a mechanistic derisking process can hit the performance of DC savers’ pension pots in the run-up to retirement.
In each case, the company will need to work out where the saver would have been if their pension pot had been correctly derisked.
Illustration by Ben Jennings
That will provide an interesting counterpoint for how the more aggressive, if unintentional, lifestyle strategy has played out.
As Aon’s own 2014 research shows, six in 10 schemes have just one lifestyle strategy, but the rest have at least a couple of options to suit different risk tolerances.
This is all beside the point for the schemes affected, of course.
The Financial Conduct Authority has released the details of its own second line of defence, this time to stop people making poor retirement choices.
The first step is for the scheme provider to determine if the saver has received guidance or regulated advice, and the second step is to identify risk factors such as the effect of inflation, the saver’s state of health, any debt they have and the risk of scams.
What is going to be crucial is whether the regulator has the strength to enforce these steps and stamp down on any foul, or simply lacklustre play.
Ian Smith is editor of Pensions Expert. You can follow him on Twitter @iankmsmith and the team @pensions_expert.