The Chancellor’s decision today (Monday) to allow the local government pensions funds to come together and invest on a grander scale is welcome. But any investment must be in scheme members’ best interests, not just in the government’s, says UNISON.
Before the Chancellor tries to get the funds that are responsible for the pensions of millions of retired and current local government workers to invest in UK infrastructure, he must ensure that any change is in the interests of the scheme members. This is a requirement in law, says UNISON.
The sole purpose of the 89 local government pension funds in England and Wales is to secure the best return for people whose current and future pensions are dependent on the success of any investments made on their behalf.
The costs of pooling the various funds’ £193bn assets must also be transparent, with no hidden fees, charges and transactions that would mean members taking a huge financial hit, says UNISON. At present no local government pension fund understands the full cost of the investment process.
And any decisions made regarding the combining of the funds’ assets in ‘mini wealth funds’ must involve members at the very heart of the process.
Commenting on the announcement, UNISON General Secretary Dave Prentis said: “Anything that enhances the returns on members’ investments, and is in their best interests, is to be welcomed. But if the move means pensions will be subject to casino-style risk, and scheme members are in danger of losing out, then that simply wouldn’t be acceptable.
“The collapse of investment in infrastructure is entirely down to the inability of the banks to lend, and of the government’s failure to see public investment as a means of growing the economy again.
“The Chancellor shouldn’t use our pension funds as a convenient way of making up for the infrastructure investment that no longer happens. Nor should they be used as replacement capital for the government’s privatisation programmes.
“PFI has been a disaster for both the pension funds investing in it and the public authorities who are now having to pick up the costs. Yet another abuse of our members’ pension funds cannot be allowed to happen.”
UNISON media contacts:
Liz Chinchen T: 0207 121 5463 M: 07778 158175 E: firstname.lastname@example.org