NOW that the post is back in business — just about — Irish Nationwide customers are being alerted by the society’s self-appointed watchdog Brendan Burgess to keep an eye on whether they receive a notice of the upcoming annual general meeting.
Burgess has been critical of the way the society has operated as well as the remuneration paid to the chief executive, Michael Fingleton.
He says there is a lot of confusion about who is and who is not a qualifying member of the society — a status that will determine who will be entitled to a windfall when the Irish Nationwide is demutualised.
“If people got notice of the annual meeting last week,” says Burgess, “they are considered by the Irish Nationwide to be members. If they did not get the notice, the Irish Nationwide does not consider them members and they should take it up with the society immediately.”
Burgess predicts there will be “a stampede” of queries when the demutualisation is announced, and “people should do something about it now”. Members who are unhappy with the response may have the wrong kind of savings or investment account, or may not have sufficient funds in their account for long enough to qualify. A query to the ombudsman should sort that out.
Hopefully, the flotation, sale or takeover of the Irish Nationwide (probably next year) will go smoothly and there will be no controversy. Given its track record however, which has been less than sterling in terms of openness and transparency, members who think they may be entitled to a share of the impending windfall would be well advised not to leave it to the last moment.
Carpetbaggers to lose out this time
Meanwhile, demutualisation plans now afoot at Standard Life are causing considerable bitterness. Four years ago the company successfully opposed efforts by so-called carpetbaggers and their supporters to force it to privatise. Now, with the business required to raise fresh funds, that is exactly the step it plans to take at its 2006 annual meeting. In the meantime, costs will be cut by 20% and 1,000 jobs will go. What isn’t going to happen this time is a big payout to members, of whom there are about 130,000 in Ireland, 90,000 of whom would qualify for a windfall.
Analysts reckon that instead of the £6,000 (€9,120) payout that might have been paid had the company privatised in 2000, qualifying members shouldn’t count on much more than £1,000 to £1,700. The reason for the decrease is the sharp fall in the value of the with-profits fund in the past four years. Only with-profits policyholders are expected to qualify for the windfall: tough luck if you’ve had a long-standing unitised savings policy or pension, or life insurance policy.
The Standard Life announcement confirms two things: carpetbagging is not always rewarded, though the investment in the with-profits fund doesn’t have to be particularly high; and the glory days of life assurance company privatisations is well and truly gone. Here in Ireland the only two demutualisations that look set to make any kind of generous payment to members will be Irish Nationwide and the EBS, though its managers — like Standard Life four years ago — insist that it has no intention whatsoever of going public and that mutuality is far better for the company than being beholden to shareholders.
Roman holiday brings benefits
Italians who visit this country tend to gasp in horror at the price of a latte and a pizza, and I now know why after spending a glorious five days in Rome. At just €1.80 for the former and €6 for the latter in a little neighbourhood restaurant near our hotel in the Aventine, we were amazed and delighted at what good value Rome was compared to Dublin.
Despite the endless stream of cars and mopeds, there is an efficient bus and tram system which costs just 70c per ride and a metro that brings thousands of commuters in and out of Rome every day for a flat fare of €1.
A Roman friend was horrified to hear that the Luas is likely to cost over €2 a ride, suggesting the only reason so many Romans use public transport is because it is cheap and plentiful. “If you have to wait, you take your car.” Simple really, but a message that will no doubt be lost on Dublin’s traffic bosses who already think it is unnatural to run more than one bus at a time outside of rush hour and even then would prefer to see them move in convoy.
One group that took advantage of the cheap fares into Rome while we were there were thousands of pensioners who clogged up the city centre with a demonstration against the pension reforms that the government is trying to introduce. With the Italian birth rate the lowest in Europe, the Italian government has no choice but to introduce reforms which include raising the retirement age from 55 and cutting certain benefits.
With no widespread tradition of occupational or private pensions and the population set to drop by 30% by 2050 unless the birth rate or immigration soars, Italy’s pensions time bomb is going to go off sooner rather than later. We may not have the cheap food, transport or the good weather that the Italians enjoy, but it is some small consolation, I suppose, that our retirement prospects are not quite as bleak as theirs.
