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Pensions governance: an introduction
Pensions governance is all about monitoring pension schemes to make sure they are run in their members’ interests. There are several aspects to pensions governance, including:
- the hiring of fund managers and advisors;
- deciding how money is invested between asset classes – in shares, bonds, property, cash or as venture capital;
- agreeing the principles that govern the way the money is invested – and making sure those principles are adhered to;
- making sure there’s always enough money in pension funds to pay pensions;
- ensuring members have a voice in the running of their pension scheme and investment of their contributions.
Sadly there is no legislation that says employers must set up pensions governance committees but UNISON reps and members should encourage employers to do this if they don’t already. There is legislation that requires one third of trustees to be nominated by the scheme membership and UNISON would like to see this increase to 50%.
What can UNISON do to improve pensions governance?
At UNISON we believe you should have access to a good, affordable and sustainable pension scheme that you can save with confidence into, whether you work in the private or public sector.
We need more UNISON reps and members on trustee boards and investment/governance committees to try to ensure that pension benefits are met and that schemes are secure and well managed.
Private sector pensions
UNISON has more than 100,000 members working in the private sector. We need to try to maximise trade union representation on trustee boards and press for investment governance committees with trade union representation for group-based personal and stakeholder pension schemes, which are growing in popularity as employers increasingly look to shift pension risk from them to employees.
It’s imperative that members of defined contribution pension schemes do not get left behind.
Public sector pensions
UNISON has a large number of members who work in the NHS and local government – the two largest public sector pension schemes in the UK.
The Local Government Pension Scheme (LGPS) combines the funds of 101 local authorities. It’s the largest pension fund in the UK and the fourth largest in the world. The LGPS has 4.6 million members and is worth billions of pounds. The way this money is invested is crucial to the retirement plans for many UNISON members as well as British industry as a whole.
Entrants into the scheme went up from 60 years to 65 years although this is balanced by a better pension build up rate.
Read more about how UNISON is working to protect your rights under the NHS pension scheme
UNISON campaigns to improve the state pension.
Next steps for UNISON reps
Make sure you understand the changes going on to the LGPS and NHS Pension Scheme.
What is a pension champion and how can I become one?
UNISON has a network of pension champions to promote and support the provision of good pensions.
Champions make sure the latest pension information is available, deal with queries, build networks of contacts and help to coordinate the fight to save public sector schemes.
I have a query about my pension. Who should I speak to?
Contact your UNISON rep. If they can’t help, you’ll be referred to your branch and if they can’t help the query will go to the central pensions unit.
How can I become a pension fund trustee?
Becoming a trustee gives you some control over your pension savings.