11 DECEMBER 1993, Page 30

The milking herds

CLEARING ITS throat on a raw Decem- ber day, the Securities and Investments Board prepared to tell us what it would do for the latest victims of financial advice milked on their way out of pension funds into personal pensions. The SIB then coughed and fell silent. While it broods, it should widen its attentions, and tell us what it will do for those in pension funds who get milked while they stay where they are. Some will find that they have paid for other people's pensions, such as the directors' for where pensions are linked to final salaries, the scheme works by cross-subsidy, and the better paid get the better of it. (Directors have the advantage of being able to set each others' final salaries so to make the most of the scheme.) Some will find that their employer has economised on contributions. Some will find that they have propped him up — their fund is his land- lord, or has bought his shares, or has lent him money. (All perfectly legal — no need for the Maxwell touch.) Some just pay the price of changing jobs, or losing them. They might reckon, when it was too late, that they would have been better off with a per- sonal pension — even running all the risks that go with ownership. They have to choose between risks. I hope that the SIB, which is there to watch over them, will say so.