John Banville, the Irish writer,
wrote in The New York Times in November 2010 following the international
bailout (via loans rather than gifts) of Ireland: "There used
to be a nice acronym that neatly expressed how the Irish people conceive of
themselves: MOPE, that is, Most Oppressed People Ever." I don't wish to don the
mantle of victimhood but here I illustrate my experience with Aviva Ireland, a
unit of one of the world's biggest life assurance groups, as another example of
a rigged system that was
highlighted by Kathy Sheridan of The Irish Times on Wednesday.
There have been many victims of the financial
crash and most are in what I call the 'Hidden Ireland,' living far from the
public megaphone. While clientism gives individual citizens an illusion of
access, what counts in the Irish system is collective power - - note the way
that specie known as the 'rural TD' tugs the forelock to the Irish Farmers
My own experience since 2007 is of a triple
whammy 1) The reckless misgovernance of the Ahern-McCreevy-Harney troika 2) a
profitable Swedish multinational able to walk away from pension commitments 3)
Aviva Ireland (formerly Norwich Union) cancelling a 17-year old life policy
because it ran out of funds and wanted to treble the premium.
William H. Whyte
(1917-1999), was an editor of Fortune magazine
when he wrote 'The Organization Man,' his best-selling 1956 book that challenged
the claims of entrepreneurial daring in business by describing the increasing
bureaucratization of white-collar environments: board rooms, offices,
In his view, the entrepreneurial spirit had been
replaced by ''the modest aspirations of organization men who lower their sights
to achieve a good job with adequate pay and proper pension and a nice house in a
pleasant community populated with people as nearly like themselves as
What can be observed almost sixty years later in
Ireland in both the still mainly male dominated senior levels of the public and
private sectors are go-with-the-flow folk who seldom if ever have to make consequential decisions in their professional lives but they ensure protections
for themselves while the buck stops for their mis-management with citizens down
the economic pyramid.
3) Aviva Ireland:
I have had a whole life assurance policy with Aviva Life & Pensions Ireland that
was sold directly by the Cork branch of the then named Hibernian Life & Pensions
in late 1996.
The cover was for €380,000 with annual premia of
The policy included a savings element but that to
me was not material as the life cover was my main interest.
The staff member neither warned that the monthly
premium was variable and the policy could be cancelled if a 'fund' evaporated.
My understanding of the savings was that if there
was no return, there would be nothing for Hibernian to pay - - I knew that
returns from an assurance/insurance company would not be significant and
certainly would not be a risk worth taking with the premia.
In recent times, Aviva says a review letter was
sent in 2011, which I didn't receive. The company claims it was because of a
change of address -- which it had been advised of in 2008.
It proposed a hike in the monthly premium from
€167 to €503 and even though it hadn't investigated the details of the case, the
policy was cancelled.
I received a letter signed not by a robot but by
a Ruth O'Rourke of the 'Customer Experience Team.'
The letter concluded with the bizarre line: "Thank
you for your custom over the years."
There was no explanation on why about €22,000 had
evaporated since 2007 - the fund value was €8,243 in 2007 and about €14,000 in
premia had been paid since then.
This is a case of mis-selling even if we use the
Sale of Goods Act of 1893 and is a lot more consequential at an individual level
than the payment protection mis-selling that has cost Lloyds Banking Group
almost £10bn in the UK - - the UK Financial Ombudsman Service estimates that
£50bn of PPI policies were sold over the past 10 to 15 years.
Thankfully, we also have a Financial Services
Ombudsman in Ireland.
2) Atlas Copco Pension:
Atlas Copco AB of Sweden, which manufactures, industrial, construction and
mining equipment, has a market valuation of €26bn, 40,000 employees and it made
a net income of €1.2bn in 2013.
I worked in financial management in Ireland and
overseas in the period 1982-1995 while my pension remained with the Irish
In June 2013 I was advised that the Irish pension
scheme was being wound-up and there was a choice of investing in an Irish Life
bond or arranging something myself.
So what was a guaranteed scheme with an annual
escalation of 3% could be wound-up without any explanation or responsibility for
example for over-investing in bank shares.
Not only could Atlas Copco use the recession to
arbitrarily close a scheme, the system has been rigged by Irish politicians to
provide themselves with comfortable safety nets - - no wonder
Eamon Gilmore, outgoing Labour leader, after
making a bonanza from land rezoning during the boom, is now eager to follow his
fellow Galwegian to Brussels -
severance pay of €432,000 and annual pensions paid by Ireland and the EU
It's official policy to keep employer social
security costs at the lowest levels in Europe resulting in less than half the
private sector workforce having occupational pensions.
Pension rights of private sector workers are also
a low priority for the politicians and senior policy makers as it's an issue
that they will never have to worry about.
Ahern-McCreevy-Harney troika: The General Election of 1977 had marked
the entry to Irish national politics of Bertie Ahern, Mary Harney and Charlie
McCreevy. In 1978, a public spending fuelled boom in Ireland resulted in a
budget deficit of 17.6% of GDP (gross domestic product) - - a record for
developed countries according to the International Monetary Fund (IMF), for the
payback for reckless economic mismanagement was a decade of misery and pain and
in 1997, on the three assuming power, as taoiseach (prime minister),
tánaiste (deputy prime minister) and finance minister, the words of Frenchman
Prince Talleyrand about the Royal Bourbons of France, were apposite: "They have
learned nothing and forgotten nothing.”