Mega-sensations are not as important as reporting what's happening to pensions

The credit crunch raises some profound questions about the nature of financial journalism; the types of story we write and how we write them. Over the past 30 years, there has been an expansion of financial coverage mirroring the liberalisation of markets. The credit crunch has itself created some unlikely new media stars: the BBC's business editor, Robert Peston, has gained a cult following for his dark-haired good looks and drawling delivery as much as for his scoops on Northern Rock.

Too much of the reporting, though, has been caught up with the drama of the mega-bid, the mega-bonus, or the mega-bust. Too little attention has been paid to the broader picture.

Business journalism in its current form was born in the 1980s when Margaret Thatcher embarked on her projects to open up the City through the Big Bang. She conducted parallel missions to expand home ownership by breaking up the old building society cartel, to widen pension provision and to democratise share ownership by selling off nationalised industries. Her over-arching belief in freeing individuals from the "dead hand" of the state spawned countless personal finance and property supplements.

Plenty of financial journalism tapped either into aspiration – how the readers, too, could become wealthy – or resentment, as the first fat cat pay packages, such as Cedric Brown's at British Gas, emerged in the 1990s. In tandem with the burgeoning business media, the City PR industry grew massively in the 1980s and 1990s, while older reporting beats such as industrial correspondent declined in importance along with the trades unions.

The dotcom boom of the early Noughties was a fresh seam of excitement for financial hacks. Some lost their critical faculties as they watched young entrepreneurs – including some of their own former colleagues – make millions. Reporters and editors were fixated by the big deals, preferably involving big personalities, such as Sir Philip Green's unsuccessful attempt to take over Marks & Spencer. Deals were and are typically reported in terms of high drama; issues such as likely job losses, the effect on regional economies and the long-term strategic interests of the UK generally took a back seat.

Large swathes of the financial universe were under-reported. Blue-chip companies quoted on the stock market received a big share of attention, partly because they are obliged to reveal information about their profits and trading on a regular basis. As private equity took over household names such as Alliance Boots and the AA, it became apparent that disclosure in that area urgently needed to improve. The state of company pension funds, on which millions of people rely for a retirement income, was and is insufficiently scrutinised – again, partly because of a lack of timely information. Although companies do report information in their annual accounts, actuarial valuations are only carried out once every three years. This gap is worrying, especially in the case of companies such as British Airways, which has essentially become a big pension fund with a little airline on the side.

There are huge questions for financial writers to address in these chastened times, including how an average person, with limited assets and financial knowledge, can be expected to navigate through the hazards of a liberalised financial system. Beyond the credit crunch there is the threat of the pensions crisis and how – or even whether – tomorrow's old people will ever be able to retire.

There are also important questions about companies' responsibility towards communities and the planet, as opposed to just serving the narrow interests of their shareholders. Issues such as dealing with the deficits have become highly politicised and will be a huge factor in the general election; more than ever, well-informed and lucid financial journalism is necessary for democracy to function properly.

This comes as the old media model is under threat from the internet. Money is tight at conventional media groups, with little cash to spare for investigations and reporters under pressure to produce instant news coverage to feed websites, and even less time to stand back and analyse.

But the picture is not all gloom; the internet has opened up access to customers and employees and could democratise financial journalism, lessening the influence of the PR machine. But whatever form it takes, the need for top-quality, independent financial journalism has never been greater.

Changing pension provider caused me huge problems

I was contacted last year by the human resources consultant Mercer, which told me that, as I had left my job, I had to leave the company's pension scheme. I had the choice of a refund cheque, which meant I would lose my employer's contributions, or transferring into another scheme. To confuse matters, I had recently moved temporarily from the UK to Luxembourg. I decided to switch to a new pension.

The deadline to leave the scheme was close and I asked a financial adviser, the Spectrum Partnership, to help with the process. It asked me to a meeting in London.

On 28 September, Spectrum said it had submitted the application to transfer my pension to Aegon. Mercer had granted me several extensions to the deadline, finally to 8 October, so I assumed all was fine.

On 29 October, Mercer sent me a cheque for £3,898 saying it had not received the relevant documentation so it was issuing a refund. I had to pay tax on it and have lost my employer's contributions. SF, Luxembourg

Spectrum said you missed the deadline because Aegon lost your documents for two weeks. By the time Aegon sent in the transfer request, Mercer had already started the refund process.

Aegon points out that sending paperwork on 28 September to be completed by 8 October was extremely tight but adds that it was not told there was a deadline. If it had known, it would have requested a further extension.

It does admit, though, that it was responsible for a delay in requesting the money from Mercer.

Because of that, it has agreed to restore the employer's contributions you lost. If it had met the deadline, you would have received £11,523 instead of £3,898. You can choose to have £7,625 credited to your bank account or added to your new pension policy.

There is another element to this business that you were unaware of: whether Spectrum Partnership should have dealt with someone living outside the UK. To comply with EU legislation, UK advisers must be authorised in the overseas country, or obtain a "passport" from the Financial Services Authority. The Spectrum Partnership does not have this.

The firm is fully aware of the regulations and discussed your situation with its compliance adviser before accepting you as a client. It believes that it complied, as you met up in London and still have a UK address.

It also asked you to sign a letter saying you were not seeking advice but just asking the firm to transfer your pension. Spectrum then communicated with you by email which, it says, is the same as speaking to someone on the phone and complied with the regulations. But the FSA says that, if a firm arranges a transaction by telephone or internet from another EEA country, it should have a passport. That is for them to sort out.

Spectrum reduced its fee from £300 to £250 because it had earned higher than expected commission from Aegon. For this sort of work, it expects to receive up to £1,000 in total but has agreed to cancel completely the fee it was charging you.

• Email Margaret Dibben at your.problems@observer.co.uk or write to Margaret Dibben, Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.

Changing pension provider caused me huge problems

I was contacted last year by the human resources consultant Mercer, which told me that, as I had left my job, I had to leave the company's pension scheme. I had the choice of a refund cheque, which meant I would lose my employer's contributions, or transferring into another scheme. To confuse matters, I had recently moved temporarily from the UK to Luxembourg. I decided to switch to a new pension.

The deadline to leave the scheme was close and I asked a financial adviser, the Spectrum Partnership, to help with the process. It asked me to a meeting in London.

On 28 September, Spectrum said it had submitted the application to transfer my pension to Aegon. Mercer had granted me several extensions to the deadline, finally to 8 October, so I assumed all was fine.

On 29 October, Mercer sent me a cheque for £3,898 saying it had not received the relevant documentation so it was issuing a refund. I had to pay tax on it and have lost my employer's contributions. SF, Luxembourg

Spectrum said you missed the deadline because Aegon lost your documents for two weeks. By the time Aegon sent in the transfer request, Mercer had already started the refund process.

Aegon points out that sending paperwork on 28 September to be completed by 8 October was extremely tight but adds that it was not told there was a deadline. If it had known, it would have requested a further extension.

It does admit, though, that it was responsible for a delay in requesting the money from Mercer.

Because of that, it has agreed to restore the employer's contributions you lost. If it had met the deadline, you would have received £11,523 instead of £3,898. You can choose to have £7,625 credited to your bank account or added to your new pension policy.

There is another element to this business that you were unaware of: whether Spectrum Partnership should have dealt with someone living outside the UK. To comply with EU legislation, UK advisers must be authorised in the overseas country, or obtain a "passport" from the Financial Services Authority. The Spectrum Partnership does not have this.

The firm is fully aware of the regulations and discussed your situation with its compliance adviser before accepting you as a client. It believes that it complied, as you met up in London and still have a UK address.

It also asked you to sign a letter saying you were not seeking advice but just asking the firm to transfer your pension. Spectrum then communicated with you by email which, it says, is the same as speaking to someone on the phone and complied with the regulations. But the FSA says that, if a firm arranges a transaction by telephone or internet from another EEA country, it should have a passport. That is for them to sort out.

Spectrum reduced its fee from £300 to £250 because it had earned higher than expected commission from Aegon. For this sort of work, it expects to receive up to £1,000 in total but has agreed to cancel completely the fee it was charging you.

• Email Margaret Dibben at your.problems@observer.co.uk or write to Margaret Dibben, Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.

My mother was told £10,000 had been paid into her pension 'by mistake'

My mother-in-law worked as a domestic in Edinburgh for 20 years and had a pension with NPI. Prior to her 65th birthday, she received an annuity quote from Standard Life which she felt gave her enough money to enjoy her remaining years. She opted to commute the maximum sum, £7,000, and would receive about £1,000 a year.

Four months later she received a letter from NPI claiming that one of its employees had, by mistake, placed £10,000 too much in her pension fund when it sent the money to Standard Life, giving her one-third more than she was entitled to. The letter was curt and simply asked her to sign a slip at the bottom authorising Standard Life to return the money within a few weeks otherwise they would "look at other avenues to recover the money". This letter has totally devastated her. She would not have retired if she had known she had so much less to live on. I wrote to NPI which said it would investigate the mistake and reply within four weeks. But, instead, another letter arrived a month later saying a senior person was involved but couldn't find out how the error had occurred. Four weeks after that, a similar letter arrived. There is still no sign of a resolution. AM, Edinburgh

Clearly no one at NPI gave a moment's thought to the impact such a mistake would have on your mother-in-law. It was bad enough delivering news of this sizeable overpayment in a threatening letter, but even worse to leave her, month after month, worrying whether she was going to be left with enough money to live on.

At least it has now found out what went wrong. A member of staff muddled your mother-in-law's pension with that of another employee at the same firm who had a similar name and then sent the other woman's pension fund to Standard Life. It accepts it made an error and has agreed to allow your mother-in-law to keep the extra £10,000. To apologise for the distress caused, NPI is also sending her £250.

• Email Margaret Dibben at your.problems@observer.co.uk or write to Margaret Dibben, Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.

• Nine out of 10 final salary schemes closed to new members
• Employers concerned about costs of personal accounts

Nine out of 10 final salary pension schemes are closed to new members, and one in five will not accept any more contributions, according to a report which has found that the vast majority of employers believe government policy on pensions is failing.

The Association of Consulting Actuaries (ACA), which published its 2009 Pensions Trend survey today, found that only 6% of employers believed the government's policy of supporting quality workplace pension schemes was working, down from 32% in 2008.

The survey, which questioned 309 employers of all sizes, found they were particularly concerned about the cost of automatically enrolling staff into company pension schemes from 2012.

Firms that wish to be exempted from offering personal accounts (a new pension scheme targeted at low income employees without any pension provision) will have to auto-enrol all employees aged over 22 and under state pension age into a pension scheme that meets minimum contribution or benefit standards.

The forthcoming changes have resulted in 59% of employers saying they intended to review their existing pension scheme arrangements, with 25% considering benefit reductions to offset the cost of increased membership and 15% thinking of closing their schemes altogether. Only 32% of employers said they had budgeted for the costs of auto-enrolment.

The ACA said that with taxes on business and individuals likely to rise over the next few years, it was difficult to see anything other than a deteriorating climate for pensions savings unless there was a radical change of approach. It added this was a "real crisis which the next government needs to tackle as one of its top priorities after the general election".

Grim future

The demise of final salary or defined benefit schemes will have a grim effect on future pensioners' finances. According to the ACA, employers funding defined benefit schemes contribute an average of 23.2% of earnings, more than three times that contributed to defined contribution or money purchase schemes.

Although the organisation said payments into defined contribution were increasing slowly, more than half of those involved in the survey received employer contributions worth less than 6% of earnings.

These small contributions, combined with much lower investment returns in recent years and an ageing population, mean the eventual pension incomes for an increasing number of private sector employees will be significantly worse than those paid out now.

The ACA's chairman, Keith Barton, said: "These are worrying times for all those looking to retire in the years ahead. Whilst the government's personal accounts initiative eventually may bring on board more pension savers, it has to be remembered that these accounts are designed to 'fill the gap' with a low level pension, where no better pension scheme exists. Quality pensions require higher contribution levels."

Barton said there was a "huge public policy gap" in meaningful action to protect good existing private sector schemes and promote new pensions that aim to check uncertain and volatile pension outcomes.

The survey found that 76% of employers thought public policy should be more supportive of "middle way" designs which combine the best aspects of defined benefit and defined contribution schemes. Although such schemes already exist they fall under the regulatory regimes for both defined benefit and contribution schemes, making them expensive and cumbersome to run.

The Liberal Democrats have supported the ACA's stance. Steve Webb, the party's shadow work and pensions secretary, said: "The government's personal accounts will not solve the problems caused by a low level of savings, nor will they help stop the slow death of final salary pension schemes.

"The decline of defined benefit schemes means we need more flexible pensions that will encourage people to save. All this makes a more generous state pension even more important to ensure a decent standard of living in retirement."