Pensions governance

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;
  • ensuring that the pension fund runs efficiently, making sure the costs and charges are known and reduced
  • 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.

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%. Service groups and branches may also negotiate around pension provision and it is important to ensure that all major changes in legislation and resistance to defined benefit closure is on the union’s agenda.

Pension schemes outside the public sector

Pension provision in the UK is moving from Defined Benefit (DB) to Defined Contribution (DC). Automatic enrolment is expected to see 10 million people newly saving or saving more into a workplace pension scheme by 2018.

Many UNISON members will be auto enrolled into a DC scheme or they may have had their DB scheme replaced by DC. It’s imperative that members of defined contribution pension schemes do not get left behind.

UNISON has more than 150,000 members working in the private sector, community and voluntary and higher education. 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.

Big issue – pension fund investment costs and charges

It’s true to say not one pension fund understands the costs and charges made by fund managers and others when investing your money. Costs and charges take place when your pension contributions are invested; they take money out of defined benefit funds and put a strain on the ability to pay benefits. They can take out a lot of money from your individual defined contribution pot of cash and assets leaving you with less to live off when you retire. In order to ensure you get the best out of the investments you must know the costs you are being taken from you.

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.

Find out more about how the LGPS is changing and how UNISON is working to protect your interests

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

State pensions

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.


Pensions governance

  • 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.

    More information on pension power