A welcome first shot
UNFE slapped the fund with a zl. 100,000 fine for "using unacceptable ways of marketing its product." It also said it was looking into doubts it had concerning the legitimacy of advertising and marketing campaigns related to nine of the 16 licensed funds.
The Commercial Union fund's offense was the most blatant, though. It allegedly sent letters to mid- and top-level managers in companies, promising them zl. 100 for every worker they managed to recruit for the fund.
Such a proposal is so crudely corrupt you would think it would fall under the common-sense dictum of just don't do it. Luckily, those crafting pension fund laws felt there just may be someone dumb, or immoral, enough to try it, so they made it illegal for a fund's marketing campaign to create a situation in which the choice of the fund could be influenced by a job-power-based relationship.
The reasoning behind such a prohibition is quite simple. It is easy for a manager, who has the power to hire, fire, set raises, give poor performance reviews, etc., to unduly influence an employee over which pension fund he or she chooses.
Most amazing, though, is that the fund has not issued a comment on the fine and the offense. If the letters were not sent out by the fund, say so and put up a defense. In the absence of such a statement, one can only for now deduce that the fund did send them.
Instead, the fund has said it needs to sit down and "explain the situation" to UNFE. Forgive us for being a tad simplistic here, but either the fund tried to create a financial incentive for managers to unduly influence employees' fund choice or it didn't.
The fund's actions and lacking public response are especially surprising given its backers. In addition to Commercial Union, BPH has Bayerische Hypo- und Vereinsbank as a strategic investor and WBK is controlled by Allied Irish Bank (AIB). If any of these foreign companies tried such shenanigans in their home countries there would be a public outcry and a call for someone's head.
The bright side to this situation is that many managers contacted by the Commercial Union fund with this tawdry proposal went straight to UNFE and cried foul. These managers are to be commended for acting in the best interests of their employees and companies. Second is the fact that UNFE acted quickly and pulled no punches. The office is going to have to do so repeatedly to show that it is a serious regulator. If it fails to do so, the whole pension reform could come crumbling down. So far, though, it's off to a good start and is showing that it means business.
The Commercial Union fund's offense was the most blatant, though. It allegedly sent letters to mid- and top-level managers in companies, promising them zl. 100 for every worker they managed to recruit for the fund.
Such a proposal is so crudely corrupt you would think it would fall under the common-sense dictum of just don't do it. Luckily, those crafting pension fund laws felt there just may be someone dumb, or immoral, enough to try it, so they made it illegal for a fund's marketing campaign to create a situation in which the choice of the fund could be influenced by a job-power-based relationship.
The reasoning behind such a prohibition is quite simple. It is easy for a manager, who has the power to hire, fire, set raises, give poor performance reviews, etc., to unduly influence an employee over which pension fund he or she chooses.
Most amazing, though, is that the fund has not issued a comment on the fine and the offense. If the letters were not sent out by the fund, say so and put up a defense. In the absence of such a statement, one can only for now deduce that the fund did send them.
Instead, the fund has said it needs to sit down and "explain the situation" to UNFE. Forgive us for being a tad simplistic here, but either the fund tried to create a financial incentive for managers to unduly influence employees' fund choice or it didn't.
The fund's actions and lacking public response are especially surprising given its backers. In addition to Commercial Union, BPH has Bayerische Hypo- und Vereinsbank as a strategic investor and WBK is controlled by Allied Irish Bank (AIB). If any of these foreign companies tried such shenanigans in their home countries there would be a public outcry and a call for someone's head.
The bright side to this situation is that many managers contacted by the Commercial Union fund with this tawdry proposal went straight to UNFE and cried foul. These managers are to be commended for acting in the best interests of their employees and companies. Second is the fact that UNFE acted quickly and pulled no punches. The office is going to have to do so repeatedly to show that it is a serious regulator. If it fails to do so, the whole pension reform could come crumbling down. So far, though, it's off to a good start and is showing that it means business.
