Ros Altmann
Encyclopedia
Dr 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.
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.
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.
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 and expected in 2002 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 had correctly anticipated that the Parliamentary Ombudsman would blame the regulators and 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.
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 35% 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.
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.
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.
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
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
. She was appointed as Director General of The Saga Group
Saga Group
Saga is a British company focused on serving the needs of those aged 50 and over. It has 2.7 million customers. The company has five call centres. All are in the UK, three in Folkestone, Kent at Middelburg Square, Enbrook Park and Cheriton Park; the fourth at the Eurokent Business park in...
in October 2010.
Education
Altmann attended the Henrietta Barnett SchoolHenrietta Barnett School
The Henrietta Barnett School is a voluntary-aided grammar school for girls in Hampstead Garden Suburb in London The Good Schools Guide called the school "One of the best academic state schools in the country, providing a gentle, inspiring education in a wonderful setting for very clever...
winning the Dame Henrietta Barnet memorial prize for sixth form achievements. She was awarded a first class honours degree from the University of London
University of London
-20th century:Shortly after 6 Burlington Gardens was vacated, the University went through a period of rapid expansion. Bedford College, Royal Holloway and the London School of Economics all joined in 1900, Regent's Park College, which had affiliated in 1841 became an official divinity school of the...
and a Kennedy Scholarship
Kennedy Scholarship
Kennedy Scholarships provide full funding for six to eight British post-graduate students to study at either Harvard University or the Massachusetts Institute of Technology...
to Harvard University
Harvard University
Harvard University is a private Ivy League university located in Cambridge, Massachusetts, United States, established in 1636 by the Massachusetts legislature. Harvard is the oldest institution of higher learning in the United States and the first corporation chartered in the country...
where she met both Mervyn King
Mervyn King (economist)
An ex-officio member of the Bank's interest-rate setting Monetary Policy Committee since its inception in 1997, Sir Mervyn is the only person to have taken part in every one of its monthly meetings to date. His voting style is often seen as "hawkish", a perspective that emphasises the dangers of...
and Larry Summers. She received a Ph. D from the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...
for research into poverty in elderly people.
Business career
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 ERISAEmployee Retirement Income Security Act
The Employee Retirement Income Security Act of 1974 is an American federal statute that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans...
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
BT Global Services
BT Global Services is a division of United Kingdom Telecommunications operator BT Group. It delivers a combination of communications and IT services to over 10,000 organisations and governments worldwide. Its customers include over 25% of the global Fortune 500 and it is the largest supplier of...
, HM Treasury
HM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
,
Standard Life
Standard Life
Standard Life plc is a long term savings and investment business, with headquarters in Edinburgh and operations across the globe. It has 1.5 million shareholders in more than 50 countries and over 6 million customers.-History:...
, the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
, Sky
Sky
The sky is the part of the atmosphere or outer space visible from the surface of any astronomical object. It is difficult to define precisely for several reasons. During daylight, the sky of Earth has the appearance of a pale blue surface because the air scatters the sunlight. The sky is sometimes...
and Channel 4
Channel 4
Channel 4 is a British public-service television broadcaster which began working on 2 November 1982. Although largely commercially self-funded, it is ultimately publicly owned; originally a subsidiary of the Independent Broadcasting Authority , the station is now owned and operated by the Channel...
.
In July 2004 Altmann was appointed by Lord Falconer
Charles Falconer, Baron Falconer of Thoroton
Charles Leslie Falconer, Baron Falconer of Thoroton, PC is a British Labour politician, who became the Lord Chancellor and the first Secretary of State for Constitutional Affairs in 2003...
, 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
Number 10 Policy Unit
The Number 10 Policy Unit is a body of policymakers in 10 Downing Street in the British government. Originally set up to support Harold Wilson in 1974, it has gone through a series of guises to suit the needs of successive Prime Ministers, staffed variously by political advisers, civil servants or...
on investment, pensions, savings and annuity policies".
Pensionstheft Campaign
Minimum funding requirement
The Minimum Funding Requirement was a part of United Kingdom legislation in the Pensions Act 1995, and was introduced on 6 April 1997. The Pensions Act 2004 abolishes the MFR replaces it with new "statutory funding objective"; this came into force on 30 December 2005 for all pension schemes with...
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
Guaranteed Minimum Pension
The Guaranteed Minimum Pension is the minimum pension which a United Kingdom occupational pension scheme has to provide for those employees who were contracted out of the State Earnings-Related Pension Scheme between 6 April 1978 and 5 April 1997...
, on average, about 40% of what they had expected. The BBC Panorama
Panorama (TV series)
Panorama is a BBC Television current affairs documentary programme, which was first broadcast in 1953, and is the longest-running public affairs television programme in the world. Panorama has been presented by many well known BBC presenters, including Richard Dimbleby, Robin Day, David Dimbleby...
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
Pension Protection Fund
The Board of the Pension Protection Fund is a Statutory Fund in the United Kingdom. It was created under the Pensions Act 2004. The Board of the PPF is a Statutory Corporation responsible for managing the Fund and for making payments to members....
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
Parliamentary and Health Service Ombudsman
The Parliamentary and Health Service Ombudsman comprises the offices of the Parliamentary Commissioner for Administration and the Health Service Commissioner for England...
, 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
Tony Blair
Anthony Charles Lynton Blair is a former British Labour Party politician who served as the Prime Minister of the United Kingdom from 2 May 1997 to 27 June 2007. He was the Member of Parliament for Sedgefield from 1983 to 2007 and Leader of the Labour Party from 1994 to 2007...
.
In accordance with Parliamentary procedure when the Ombudsman’s recommendations are rejected, the Public Administration Select Committee
Public Administration Select Committee
The Public Administration Select Committee is a Select Committee appointed by the British House of Commons to examine the reports of the Parliamentary and Health Service Ombudsman and to consider matters relating to the quality and standards of administration provided by civil service departments,...
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
Geoffrey Bindman
Professor Sir Geoffrey Lionel Bindman QC is a British solicitor specialising in human rights law, and founder of the human rights law firm Bindmans LLP, described by The Times as "never far from the headlines." He has been Chair of the British Institute of Human Rights since 2005...
.
With Altmann's help, John Halford of Bindman's and barristers, Dinah Rose QC and Tom Hickman from Blackstone Chambers
Blackstone Chambers
Blackstone Chambers is a leading set of barristers chambers in the Temple district of central London. Established in the 1950s, it has 85 tenants, of whom 34 are Silks...
, all working on a no win no fee basis, prepared a Judicial Review
Judicial review
Judicial review is the doctrine under which legislative and executive actions are subject to review by the judiciary. Specific courts with judicial review power must annul the acts of the state when it finds them incompatible with a higher authority...
.
In February 2007 a High Court
High Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
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
Courts of England and Wales
Her Majesty's Courts of Justice of England and Wales are the civil and criminal courts responsible for the administration of justice in England and Wales; they apply the law of England and Wales and are established under Acts of the Parliament of the United Kingdom.The United Kingdom does not have...
judges in late July 2007.
Meanwhile, in the March 2007 budget the Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
announced additional compensation
for the Financial Assistance Scheme and a review to be carried out by Andrew Young
Andrew Young
Andrew Jackson Young is an American politician, diplomat, activist and pastor from Georgia. He has served as Mayor of Atlanta, a Congressman from the 5th district, and United States Ambassador to the United Nations...
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
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
,
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, the “indefatigable campaigner for justice”,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 and expected in 2002 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 had correctly anticipated that the Parliamentary Ombudsman would blame the regulators and 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' for Annuities
In the UK, the purchase of an annuityLife annuity
A life annuity is a financial contract in the form of an insurance product according to which a seller — typically a financial institution such as a life insurance company — makes a series of future payments to a buyer in exchange for the immediate payment of a lump sum or a series...
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 35% 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.
2008 Pensions Act
Altmann is highly critical of the UK's new 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.
Views on Coalition Government reforms
On her website, Altmann has stated that whilst most of the "barrage of reforms" of the Coalition governmentUnited Kingdom coalition government (2010–present)
The ConservativeLiberal Democrat coalition is the present Government of the United Kingdom, formed after the 2010 general election. The Conservative Party and the Liberal Democrats entered into discussions which culminated in the 2010 coalition agreement, setting out a programme for 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.