UNISON LGPS Seminar - Tuesday 11th of December 2018 - 10.30am to 4.30pm

The union’s Capital Stewardship Programme is holding our annual seminar for all LGPS Board members, branches and activists on the governance and economics of the LGPS. There are major reforms being implemented England, Wales and Scotland and these will be discussed across

National Seminar: Local Government Pension Scheme (LGPS)

Tuesday 11th of December 2018 - 10.30am to 4.30pm

UNISON Centre – 130 Euston Road, London

The union’s Capital Stewardship Programme is holding our annual seminar for all LGPS Board members, branches and activists on the governance and economics of the LGPS. There are major reforms being implemented England, Wales and Scotland and these will be discussed across

The union will be launching a major training programme for members and activists to get more involved in the responsible investment policies of their funds. Issues such as Climate Change, Worker Rights, Executive Pay, Workers on Company Boards, and Living Wage for the companies your fund invests in. Come and find out about this new initiative.

Outside speakers have been invited from Labour’s Shadow LGPS Minister, the LGA, and ShareAction

Preliminary agenda
A future Labour government and the LGPS
The Scheme Advisory Boards – progress
Cost control in the LGPS – preparing for the 2019 valuations
What’s happened to the LGPS Asset Pools
Building a member led responsible investor campaign in the LGPS

Please email your unison contact for an application form.

Best wishes

Colin Meech, National Officer, Capital Stewardship Programme

Court tells Government they cannot make Council Pensions funds be dependent on Boris Johnson Whims

In a victory for common sense the Courts have apparently thrown out the requirement that Council Pension funds have to invest according to the political whims of the UK Foreign office.

Who on earth  would want their pension being dependent on the judgement  of Boris Johnson?

Well done to Palestine Solidarity for funding this judicial review. This case also supports the view of UNISON that the existing EU law already requires Council pension funds should be invested in interests of beneficiaries and legally separate from employers and the government.

Professional Pensions The government has suffered a major defeat in the High Court after its rules on Local Government Pension Scheme (LGPS) investments were deemed unlawful.

The investment guidance, issued last September, requires LGPS funds to have policies on environmental, social and governance (ESG) issues but also added they could not pursue policies contrary to central government foreign and defence policy.

The guidance said "pension policies to pursue boycotts, divestment and sanctions [BDS] against foreign nations and UK defence industries are inappropriate, other than where formal legal sanctions, embargoes and restrictions have been put in place by the government" and funds could not "pursue policies that are contrary to UK foreign policy or UK defence policy".

The policy was particularly contentious as LGPS funds and campaigners said this limited their ability to take up ethical investment, particularly BDS action against companies operating in Israeli settlements in Palestine.

A bid was launched in the courts by the Palestine Solidarity Campaign (PSC) to overturn the regulations via a judicial review, where it argued the government had acted outside of its powers, and it was "lacking in certainty".

It also cited Article 18.4 of the EU's directive on the Activities and Supervision of Institutions for Occupational Pension Provision (IORP), which states "member states shall not subject the investment decisions of an institution… to any kind of prior approval or systematic notification requirements".

However, in his judgment, issued today, the judge Sir Ross Cranston only agreed with the first argument, stating the minister for the Department for Communities and Local Government (DCLG) Sajid Javid had "acted for an unauthorised purpose and therefore unlawfully".

His reasoning was the "guidance has singled out certain types of non-financial factors, concerned with foreign/defence… and stated that administering authorities cannot base investment decisions upon them. In doing this, I cannot see how the secretary of state has acted for a pensions' purpose".

He stated specifically that this guidance could preclude LGPS funds taking ESG factors into account even if there no "significant risk" of financial detriment or "no good reason" to believe members would object.

Cranston therefore granted a judicial review, meaning the government may have to rethink its approach to the rules if it wishes them to take effect.

PSC chair Hugh Lanning welcomed the ruling, and said local councils would be happy to be able to invest funds as they see fit.

"Today is a victory for Palestine, for local democracy, and for the rule of law," he said.

He added: "This ruling upholds the right of local councils and their pension funds to invest ethically without political interference from the government of the day."

A spokesperson for DCLG said the government would consider whether to appeal: "It is an important principle that foreign policy matters are for the UK Government to decide. We will consider the judgement and next steps."

Unison national officer for capital stewardship Colin Meech also welcomed the judgment, and called on the government to replace the guidance with the IORP directive.

"It was always preposterous to us that the LGPS funds had to invest in the best interests of UK foreign and defence policy," he said. 

"We have been telling various governments since 2007 that they must implement the EU IORP directive into the LGPS. The judge did not say that the directive did not apply to the LGPS and therefore we now hope that the current government dismantles the 2016 regulations and replaces it with article 18 of the directive.

"This will mean that the LGPS funds must invest in the best interests of scheme members, as all other pension schemes in the UK must do. The best interests of scheme members are aligned with all sponsoring employers in seeing that their pensions are delivered in the most efficient manner. For 10 years LGPS scheme members have been denied their statutory rights, this must be rectified."

Westminister Hall Parliament Debate on Red Tory plans to "Leninism" the Local Government Penison Scheme

Yesterday evening I went to the Parliamentary debate at the Grand Committee Room in Westminster Hall, which took place following the 105,000 signatures in the petition against Tory plans to direct and control the 5 Million member, £200 billion UK Local Government Pensions Scheme.

I sat with the ever quiet and demur UNISON national officer for Capital Stewardship, Colin Meech.

A number of opposition MPs from different political parties had decided to support this petition at the debate.

I will post later in more detail on this event once I have seen and considered the full Hansard report on the proceedings but it is pretty clear to me that the Tory plans to have powers to direct LGPS funds to invest in their pet political infrastructure projects and stop funds from investing overseas unless they sign up to Tory Government foreign policies, is just an absolute disgrace.

UNISON is convinced that such demands are illegal since pension funds have to decide to invest in accordance to the best interests of members of their fund and not the political whim of Government ministers.

It was also clear to me this evening that in response to a direct question by Melanie Onn MP, that the new Local Government Pension Minister, Marcus Jones, while trying to defend this robbery, simply did not understand that there is no Crown Promise or Pension Protection Fund for the LGPS. Under present plans if the Government forces the LGPS to invest or remain in disastrous investment schemes then all bets are off about the sustainability of the Scheme and the safety of our pensions.

I had to agree with the remarks by Jack Dromey MP, that these plans for the local government pension scheme are not only illegal but more "Leninism than Localism". What on earth is a Tory Government which claims to be against big government and in favour of localism and a small state acting as Marxists and telling local pension schemes what they should be investing in?

Okay, I get it that they should be telling them not to invest in very risky derivatives (LOBOS) or a race horse at the 3.30 at Newmarket. But telling them "what" to invest in for political reasons is very different.

Don't they realise that they are giving a precedent for any future government to direct pension investments as they see fit?

This bonkers' policy will mean less investment, not more, by the LGPS into much needed UK infrastructure investment, since there will be a justifiable suspicion by pension committees and boards that money is being allocated in order to avoid possible government intervention rather than in the best interests of members. They will be suspicious of all such proposals and should be minded to challenge and oppose them until this law is changed. Talk about unintended consequences!

The fight is not over and if the Government thinks this will go away then they are being completely delusional.

Picture from after meeting in Westminster Hall of Labour MPs, Melanie Onn and Lilian Greenwood, who are UNISON members and turned up tonight to support our campaign. Many thanks to all the other MPs who turned up as well to save their constituents' pensions and make sure that their money is not being used by this or future governments for their own political agendas.

 

Workers' Capital in the 21st Century: ShareAction Annual Lecture with Sharan Burrow

The keynote speaker at this years ShareAction annual lecture in the historic Conway Hall, Red Lion Square, London was the General Secretary of the International Trade Union Confederation, Sharan Burrow.  The ITUC is the global version of the British TUC.

Sharan give a well argued and passionate speech on "Workers Capital" (the pension investments and other savings of workers) and in favour of using it to support climate transition while respecting fossil fuel workers and their contribution to our prosperity.

She repeated her mantra that I first heard her say at the recent CWC meeting last month "there are no jobs in a dead planet".  While she welcomed the green "disinvestment warriors" present who would want pension funds to immediately pull out of investing in Carbon industries such as Coal and Oil, she did favour engagement with firms if they are willing to take part in transition. Some will earn our trust.

              

If companies refuse to change then we do have the powerful leverage of disinvestment by our pension funds. We are close to losing the Climate Change War and must act if our politicians fail to regulate.

Sharan praised the TUC for setting up "Trade Union Share Owners" where trade union staff pension funds collectively vote their share holding and she hoped other national unions would do the same. Also ShareAction for its success in furthering the Living Wage.  She thought that the election of Jeremy Corbyn as Labour Party leader was a great symbol of the possible. 

                         

Her closing remarks was the battle cry "Zero Carbon, Zero Poverty".

Next Speaker was Gail Cartmail from Unite, who spoke about role that unions can play by representing the interests of their members investments, Colin Meech from UNISON who talked about the need to control costs of our pension funds like they do in Holland, while Jeannie Drake reflected that many workers do not have unions in their workplace and have contract not trust based pensions, so how do we leverage their capital?

There was then a Q&A during which Green Party leader, Natalie Bennett, asks whether there are civil Liberty groups present today and can we work together? I tried to ask a question but wasn't called on how trades unions generally will have to raise their game and give practical support and guidance to pension trustees if we want them to pursue a progressive agenda on climate change.                             

Catherine Howarth from ShareAction closed this successful event with a call for a legally binding "Charter of Rights" for investors and owners. 

UNISON Capital Stewards Website

I have just signed into the new UNISON website for Capital Stewards and will start posting some links and articiles over the next few days. The site is currently only for UNISON activists and is password protected. If you are a UNISON pension trustee or Local Government Pension scheme Committee or Board member, you can apply for access via your UNISON regional contact.

This is the introduciton on the site "Capital Stewards has been designed as a knowledge and campaigning unit for trade union activists. Here you will find materials, films and news that will help you understand the world of pension funds, investing and broader economic ideas. Around the world pension funds and their representatives are making investments and engaging on a wide range of issues from worker's rights and pay to the environment".

The Youtube video "its our Money - the Power of Pension Funds" explains more about capital stewardship.

Hat tip Mr Meech

#uNEC15 UNISON LGPS Reform Campaign fringe

Picture of UNISON Capital Stewardship officer, Colin Meech, at last nights fringe "Why Governance and Economics Are Now Critical for Members".  This took place at the end of Local Government Conference and the eve of National delegate conference.

I chaired the meeting and started by apologising for my voice since I have started the conference with a cold. Normally we all get colds by the end of conference.

Colin began by pointing out that all UK Pensions funds don't know how much they cost. Even the Unison staff scheme doesn't. The Netherlands are the only place they do know how much they cost and this has seen costs cut by up to half.

The true costs and fees of pension schemes have been massively understated. Transport pension scheme "Railpen" estimate that some £350 million of costs had been hidden by their fund managers. The New York City 5 public pension funds found that over 10 years they had an income of $40 million but their costs were $2 billion!

The new Local Government Pension Boards have a statutory duty to ensure that funds are effective and efficient.  We cannot assume that funds are being run in your interests.  Remember that scheme members are liable for increases in costs. Employer costs are capped (13% of payroll). If this cap is exceeded by more than 2% then the LGPS will have to either increase employee contributions, cut benefits or both.

Any money that leaks out of the LGPS is money that is not available for you to have a pay rise. Each Board must have a thorough examination of every penny of costs. If you reduce costs you increase your income.

Costs are critical. Don't forget that most Tory Party funding is from the City of London.

In the Q&A Colin was asked how to stop cronies of Council managers being appointed to a Pension Board? He said if the selection process was unfair then local branches must make a complaint  first to the local Board, then to the National Advisory board and ultimately to the DCLG.  Once a Board is established it is supposed to be independent of the administering authority.

Boards should also pick who chairs meetings. This should be discussed at the first meeting of a Board.

Need to address structural problems now. All costs have to be made transparent so you can see what efficiencies there are and we must look again at the merger of the 89 funds. This was blocked in the run up to the General election. However, the Tories now want to save money.

Remember that things that get seen, get measured. Things that are hidden are not. Now we can use the example of Holland who have transparent pensions.

I made a point in response to a question about whether the LGPS is sustainable, that pensions are expensive and cost money. If you want to have a decent pension when you retire then whether you work in the public or private sector, your employer is going to have to put an significant amount of money into a pension plan for you. If they don't then you will retire in poverty.

A final question was about whether scale and being managed in-house saved money. Colin confirmed that the best performing pension funds tend to be the largest and that the funds with the lowest costs are the large ones who manage the money in house and do not employ expensive external managers.

The average LGPS pension fund costs £141 per member. The West Yorkshire fund only costs £26 per member. You have to look at cost and stop everyone having a slice of your pie.

After the fringe I had to rush off to the London regional meeting. 

Are Council pension funds being ripped off? File on 4

On Tuesday evening (and repeated 5pm today) the excellent investigative Radio 4 programme "File on 4" examined whether at the same time that Councils are suffering from massive Government cuts - their pension funds are also being ripped off by fund managers in excessive fees and charges.

There was an interesting consensus of views that they are indeed being ripped off. On the one hand former policy adviser to David Cameron, Michael Johnson, argued that 101 fragmented and inefficient Council funds running the same pension scheme was a "national embarrassment". While from the opposite political corner, UNISON national Officer, Colin Meech, compared the scheme to a bucket full of leaks and holes which constantly needs topping up.

The programme needs to be congratulated for pointing out that contrary to the tabloid stereotype the majority of people in the Council pension scheme, are not the so-called "Town Hall fat cats", but low paid, part-time women. Also unless the scheme becomes more efficient in the future then these low paid workers will pay the price with reduced pension benefits or higher contributions.

My fellow UNISON pension representative, Malcolm Cantello, described how the charging structure is so complex that no-one seems to know how much his pension fund actually pays out. Birmingham Councillor, John Clancy, believes that merged regional "super funds" would not only cut costs but enable them to have the scale to invest in much needed infrastructure projects.

The researcher, Dr Chris Seir, thinks that the actual cost of the Council pension scheme could be more than double, as previously thought, at around £1 billion per year.  Imagine what better use hard pressed Councils could do with that sort of money?

Probably the most controversial statement made (out of many) was a remark by Michael Johnson that suggested the reason why the current government had kicked the question of cutting costs and merging Council pension funds into the long grass was because the fund management industry funds the Conservative Party. I suspect that Michael is now completely off his former boss' Christmas card list.

(picture of annual Gala dinner of National Association Pension Funds inside Liverpool Cathedral paid for by City sponsors. You can download the File on 4 programme here and check out this post from last year on "how we pay for the City")

UNISON LGPS Seminar 2014 - Time to govern YOUR money!

This was my welcome speech to the 120 UNISON representatives who attended our National Local Government Pension Scheme seminar.

I chaired the meeting but stole most of this intro from the speech that our President, Lucia McKeever, was due to deliver. Lucia was unwell today and could not attend. I will post further on what turned out to be an excellent seminar.

"Good morning everyone

And welcome to UNISON centre – my name is John Gray and I will be chairing this seminar today. I am a member nominated representative on the Local Government Pension scheme and a UNISON NEC employer trustee on our staff pension scheme.

I know some of you have travelled a long way today

We appreciate your commitment – wherever you have come from and whatever branch or service group you represent

There is a lot to get through today – so I will be brief

One of the outstanding achievements of the trade union movement are the negotiation and creation of pension schemes and pension funds.....to live a decent life after retirement is what we all deserve

As a long standing LGPS rep I understand our own scheme and as a trustee of the UNISON staff pension fund I have a good grounding and understanding of the importance of good governance, good investment returns and effective management of the assets we hold in trust for our employees

I believe the role of a pension board member is challenging and exciting – it is one of the most important jobs a trade unionist can take up – looking after the savings of others

It is natural ground for us – to be inquisitive, to question, to probe and find out – to ensure the members get the deal they expect and hopefully more

Today this seminar is about preparing you for the role of LGPS board members – to take you through the key issues your officers and NEC members have been negotiating on your behalf

It has been a long journey to gain the right for you to sit on the LGPS board decision making process – back in 2003 local government conference motion requested the union campaign for your rights to govern your money – I am proud to say we are nearly there

We have had to strike and negotiate to win this opportunity – let’s not throw it away

By April 2015 every LGPS fund in the UK must have a board – with equal numbers of scheme member and scheme employer reps

We have put in place the resources to help you achieve that – every region has a project plan that is co-ordinated at the centre – we have training and in the New Year we will launch web based resources for you all

The key message I bring to you today is this – it cannot happen unless you and your branch and your region are prepared – after today we need to step up our efforts to ensure that every board has UNISON representatives – to ensure that scheme members are for the first time – represented at the table.....

This is an historic opportunity – there is £200 billion worth of assets to oversee – there are millions of scheme members and pensioners that need your skills and judgement to represent them....

I can do it - You can do it – we can do it together.....

Make sure you ask questions and participate – this day is for you...enjoy it"

Capital Stewardship Fringe - introduction #uNDC14

This is introduction to the fringe I chaired on Wednesday evening.

"Welcome. My name is John Gray I am branch secretary of Greater London region Housing Association branch and an NEC member for Community. I have also been a member of the Local Government Pension Fund (LGPS) since 1993 and since 1996 I have been an observer then a member nominated representative (MNR) on my scheme investment panel and pension committee.

On my right is a person who needs no real introduction, Colin Meech, UNISON national officer for Capital Stewardship and LGPS governance specialist.

The agenda for today’s meeting is a few words from me following by an update by Colin on the latest developments on the governance of the LGPS.

I have been paying around 6% of my wages into my Pension for over 20 years. My employers have been paying the equivalent of about 14% of my wages, my deferred pay for the same period.

To be clear. My pension fund is my own money. Yet when I first became a pension rep on my scheme and began asking what was happening with my money, the 20% of my pay that I and my fellow union members had been paying into the fund, I remember being told by one Councillor on its pension panel that I was "an observer, and observers should be observe and not speak".

Now, as you can imagine I gave that Councillor the benefit of my views on my right to speak and raise questions about my money at this and any other future meeting. To be fair that was the last time that happened to me but that attempt to put me in my place reminded me that essentially, we were powerless in the LGPS, especially compared to private sector member nominated representatives who had the legal right to be full members of pension boards with voting rights.

To be frank I was lucky in my scheme that we were even “allowed” to attend the pension committee. Some UNISON members were told by Chairs that "over their dead body would they have a union rep at their meeting”. Note the view that this is “their” meeting. Of course some Funds had no pension committee at all, and the fund was run by a Chief Officer alone. There have also been well run funds that welcome MNRs.

This is why I am so pleased thanks largely to UNISON and our national officers such as Colin that we now have some real rights and responsibilities to govern our own money. Colin will brief you on the next steps but he will also warn you about the inevitable resistance by vested interests to the democratisation and efficient running of our funds. The usual suspects still want things to remain the same and treat us as 2nd class trustees.

Colin will also point us in the right direction but it is up to all of us to do our bit and make sure that we stop the financial services industry ripping off our pension funds and making sure that we invest our money in long term, sustainable, well managed investments that don’t for example employ child labour, doesn't kill its workers, bride public officials or destroys the environment.

Not only do we not want our money used in this way but also it is our belief that this will make more money for our fund than short term speculation. 

I have now witted on enough and will pass you over to Mr Meech. Q&A afterwards. We will finish at 6.15pm".

(I will post a report on Colin's presentation next)

UNISON NDC14 - LGPS Members "time to govern your own money" fringe

Next week is the UNISON National Delegate Conference (NDC). On Wednesday 18 June 2014 at 5.15pm in Syndicate room 2, Brighton Centre, there will be a UNISON Capital Stewardship fringe.

This conference fringe is called  "Local Government Pension Scheme - time to govern your own money".

A certain UNISON NEC member and LGPS rep called John Gray will Chair/Speak at the meeting. The UNISON National officer for Capital Stewardship, Mr Meech, will be there and one "other" speaker.

"In April 2015 scheme members will start to make key decisions about how and where their money is invested. UNISON has won a historic concession from the Coalition government.

50% of seats on the new LGPS boards will be made available to trade union scheme members.

The fringe meeting will discuss and debate the reforms to LGPS governance, what it means for the union and for union members who want to become pension fund reps, to discuss the organising programme to support this work.

The LGPS has 100 pension funds with a collective asset value of £160bn."

Pearson PLC AGM question on "gag orders"

Last Friday lunchtime I went to the Pearson PLC Annual General Meeting in central London. Pearson is a FT100 British multinational publishing and education company. It also owns Penguin Books and the Financial Times.

I was there as a UNISON staff pension fund trustee and share owner representative. This is the question that I asked the Pearson Chair and the Board.

"Earlier this month, a New York City City school principal named Elizabeth Phillips wrote an opinion piece for "The New York Times", outlining her concerns about a recent Pearson-developed standardized test. Phillips was not able to comment about specific deficiencies with the test, due to a contractual “gag order” imposed on teachers and administrators.

Randi Weingarten, president of the American Federation of Teachers, recently addressed her concerns about these “gag orders” to the board. In her letter, President Weingarten raises concerns that “Gag orders and the lack of transparency are fueling the growing distrust and backlash among parents, students and educators in the United States about whether the current testing protocols and testing fixation is in the best interest of children.” President Weingarten asked that Pearson cease using these prohibitive clauses in their testing contracts.

QUESTIONs: Given that the North American market is Pearson's largest, don't you think that this could harm our companies performance?

Will the board respond to accusations, raised by the American Federation of Teachers, about Pearson's use of “gag orders” in their standardized testing contracts"?

In response, the Chief Executive John Fallon seemed to suggest that Pearson was not to blame for the "gag orders". I had with me two guests from the American Federation of Teachers, Bradford Murray and Dan Pedrotty. They certainly did not seem to agree with his analysis, however they were reassured by his firm commitment to engage with the American Teaching unions on this matter (and on other issues with the British unions). I know after the AGM there was a constructive discussion with Bradford and the CEO.  Further meetings are planned.

Many thanks to our UNISON Capital stewardship maestro Colin Meech and our Staff pension fund administration team for sorting out all the AGM entry arrangements.

Local Government Pension Scheme - Investment Governance: Colin Meech, TUC Pension Trustee Conference 2013

This workshop was led by Colin Meech, the notoriously shy and retiring UNISON National officer for Capital Stewardship. UNISON has by far the highest number of members in the £150 billion Local Government Pension Scheme (LGPS).

The LGPS is undertaking fundamental reform next year. Not only is it changing to a career average from a final salary scheme but the accountability of the LGPS is changing radically and for the first time beneficiaries will make up 50% of the new Pension Boards. Who arguably will jointly run the the LGPS with employers in the future.

The government is also consulting on merging the 89 different LGPS funds in England. Which drew the first question to Colin from someone in the workshop who has a private sector pension background and asked "Why do you have 89 different pension funds for one set of standards?" Which of course was music to Colin's ears. 

Colin started with an introduction on the history of the LGPS. It can trace it roots to pensions for Council "Poor Law" officials in the 19th Century.  In 1922  NALGO a predecessor union of UNISON was formed to help set up the LGPS.

At the moment there is a new Shadow National Pension advisory board with 6 employer representatives and 6 Union.  There are 4.5 million members of the LGPS and 1.3 active. Most schemes have delayed auto-enrolment until 2017 (not my Tower Hamlets)  The smallest scheme is the Isle of Wright at £300m while the largest Metropolitan Schemes are worth £10-12 billion each.  There are 79 LGPS run by local authority committees while 8 are run by by senior Council managers officers called Section 151 officers who run their schemes themselves. 

The LGPS is subject to the Superannuation Act 1972 and Local Government Act 1972.  As well as local authorities there are 6700 private employers in the LGPS. A 1/3rd of members are now in the private sector.

In LGPS 2014 there is a cap on contributions of 19.5% of salary. 13% for employers and 6.5% for employees. If the employer cap is breached then employees face either a rise in contributions or a reduction in future benefits. 

89% of LGPS asserts are currently managed by 785 external fund managers. 5 of whom manage £64 billion between them.

Colin finished the session by asking the workshop to suggest how the LGPS should be governed in the future. There was a stunned silence to his proposal. I said to Colin that this is because we were use to be told what to think by you not to be asked our opinions!

:)

Demand the Living Wage

I received today the email below from Mr Meech at UNISON capital stewardship programme and have just spent a happy 10 minutes emailing via the ShareAction website my 4 difference pension funds ( 2 private deferred and 2 active LGPS).


This week is Living Wage Week and tomorrow I will also post on Ed Miliband's speech this morning on the cost of living crisis in this country.

"Dear colleagues

UNISON has been at the forefront of the campaign for Living Wages since it started over ten years ago.

To mark 2013’s Living Wage Week, UNISON has joined with ShareAction (a campaigning charity that works closely with the union) to use the power of our members’ pension funds to support Living Wages.

The Local Government pension funds, and other UNISON members funds, hold £ billions worth of shares in the UK’s biggest companies – and with their shareholder power, they can demand that companies pay people a salary they can live on. This investor power comes from members’ money, which gives us the right to call on those funds to do the right thing.

Add your voice to the thousands of people demanding a Living Wage this week? Click below to ask your pension fund to push for the Living Wage: http://action.shareaction.org/Living-Wage/

We know this kind of tactic works. When UNISON and ShareAction (then called FairPensions) launched the JustPay! campaign for Living Wages two years ago, just 3 of the biggest 100 companies in Britain paid their employees a Living Wage. Due to the pressure we’ve put on them together, 10 more of these corporate giants have now signed up.

With the cost of living rising and many more working families struggling, this issue has never been more important: getting the biggest companies in Britain to pay the Living Wage will help tackle poverty in the UK head on.

Ask your pension fund to support Living Wages: http://action.shareaction.org/Living-Wage/

UNISON staff pension fund has committed its shares in the FTSE 100 to help this campaign.

Please contact me for further information".

Best wishes

Colin Meech, National Officer
Capital Stewardship Programme
Web site: www.capitalstewards.org
Twitter: UNISON Capital @workercapital

UNISON Local Government Pension Scheme Seminar 2013

Last week I chaired this well attended national seminar at the UNISON Centre in London on the Local Government Pension Scheme (LGPS). There were about 90 UNISON LGPS activists from all over the UK.

The stated aim of the day was to explore the outcomes of the implementation of the Hutton Review and understand the huge developments that have since taken place.

First speaker was UNISON National Secretary and LGPS Shadow Board member, Jon Richards. Jon gave a sober update on the ongoing and often tortuous negotiations between the Board and its various components - the Unions, the Local Government Association, the DCLG  and the Treasury on the future costing and governance of the LGPS.

He has discovered that some parties are now suggesting that they should not be subject to past agreements since they did not understand at the time what these original agreements meant! Jon warned us that we must not just rely on what national officers can deliver but must organise and argue locally for change and must act and think as equals in all these negotiations.We have a job of work to do.

Next was UNISON Pension officer, Glyn Jenkins who gave the first of a 2 part presentation on the technical negotiations on future benefits for LGPS 2014.

National Capital Stewardship officer (and seminar lead) Colin Meech gave a call to arms for everyone present to organise and plan for us to have 50/50 member representation on all 89 England and Wales LGPS pension boards. We all need to step up to the challenge ahead of us.

Financial Academic, Dr Chris Seir (see picture left speaking - a former Police officer, past investment adviser but still a martial arts expert) gave a convincing insider argument that our pension funds are being ripped off by excess and unnecessary fees and charges.

Karen Thrumble from Statestreet didn't quite agree with everything that Chris had said. She did have concerns about the advice of some LGPS investment advisers on certain expensive products and while did not think there was sufficient research to say that "big is always best" in the size of LGPS funds, she did think that bigger funds tended to produce better returns since they could invest more cheaply in-house and be less complex.

UNISON South West region organiser and an employee nominated trustee on our staff Pension scheme, Jon Dunn, reminded us that socially responsible investment (SRI) should be at the heart of everything we do as pension trustees. The TUC and a number of major unions including UNISON had recently set up "Trade Union Share Owners" (TUSO) on voting shares at company AGM's and engagement to try and make sure this happens with our workers capital.

Next was Jackie Hamer, who is a UNISON lay activist and is a member nominated rep on the Environment Agency pension fund which is part of the LGPS family. The governance and SRI arrangements in her almost fully funded open Defined Benefit scheme are an exemplifier with 50/50 employer/employee representation.

Catherine Howarth from the pension watchdog, ShareAction (specialist subject upsetting Pension fund administrators and Company Chairs at their shareholder AGMs) gave a great example of the potential power of Pension trustees and beneficiaries by showing how their campaign had helped result in an increase of top FTSE companies paying a Living wage from 2 to 11 to all its UK staff and subcontractors.

Final speaker was Glyn Jenkins again who gave a typical "belt and braces" overview of what LGPS 2014 technical benefit changes will mean to our members. All of us can now expect lots and lots of case work from LGPS members with long service who have reached the magic age of 55.

While we are not allowed to give financial advice I think you need to ask members if they retire early at that age (by choice and not due to ill health or redundancy which have very different consequences) with all the penalties, do they really want to risk dying in poverty?

In my closing comments I thanked the organisers and speakers for a great seminar. I had been told by one representative during the tea break that this had been the best event laid on by UNISON that he had ever attended! I repeated Jon Richards earlier call for action, that it is up to all of us, lay activists and organisers, at every level to act and defend the long term interests of our pensions.

How we pay for the City (& expensive Red Wine)

I recommend that if you have a funded Pension that you listen to this excellent Radio 4 programme "How You Pay for the City".  

Former fund manager David Pitt- Watson pointed out that excessive charges in the UK compared to  Holland means that the average comparable dutch pension will be 50% more than you would get in the UK.

While the incomparable Mr Colin Meech, UNISON National Officer for Capital Stewardship, thinks that the Local Government Pension Scheme is just being ripped off. He recounted how a colleague who became a fiduciary trustee on a large scheme was shocked to find that the trustee board spent more time being wined (at £100 per bottle!) and dined by fund managers than they spent supervising the scheme. I have heard the same story from that colleague.

It is not just excessive fees by fund managers but also "churn" (excessive buying and selling of stock); stock lending (they lend out your share certificates for a fee), "Custody Banks" (if something is too good to be true...) and "transitional management" (there is a completely shocking story how the Royal Mail Pension fund was cheated and how a judge was told that an untruth was not a lie)

By coincidence we heard similar arguments at the AMNT Summer Conference from Michael Johnson that I posted upon yesterday.

#UNDC13 Capital Stewardship fringe - Wednesday Evening

Picture from UNISON NDC Capital Stewardship fringe "time for members to govern their money" with UNISON national officer Colin Meech, Mo Baines from Greater Manchester Pension Fund (Chaired by NEC Jane Carolan in the middle)

Colin spoke about the need to bring the fund management of the local government pension (LGPS) fund "in-house"and stop being ripped off by City fund managers. He briefed us on the new governance arrangements of the LGPS which will probably come into effect in 2015 (we think).

Mo praised Colin for his work on pensions. He had been the first to point out why schools and hospitals use PFI to fund rebuilding when we have money elsewhere?

The Greater Manchester Pension Fund (GMPF) is worth £10 billion but it only has trade union  observers with no voting rights. The fund is looking into localised investments. It wants to build 240 homes for market rent. If you pay into a pension scheme then the area you live in should also benefit from scheme investments.

Mo said that fish always rot from the top. We should make sure that in the LGPS we change fund management from the top.

My question to both is that UNISON should consider regional networks of LGPS pension reps to encourage and give face to face support to reps? There use to be a national network of LGPS reps who actually sit on pension panels and committees, who could be consulted and give feed back on what they they need to help them carry out their duties.

Colin responded by saying there will be a national consultation forum. He warned us not to underestimate those who feed off your money. Do they want to give this up? There are huge vested interests. The LGPS has high fees plus hidden charges. You could clear pension deficits within 8 years if the LGPS was merged & you cut costs and raise performance.

AMNT Open Meeting March 20th at AXA

Dear Member,

The next AMNT Open Meeting will take place on the afternoon of March 20th at AXA’s London offices, 7 Newgate Street, London, EC1A 7NX. Please do try to come along, though spaces are limited so book your place early to avoid disappointment.

The day will begin at 1100 am with a group training session on one of the latest modules of the Pensions Regulator’s Trustee Toolkit - strategic investment, This follows on from the fund management module we discussed at the last Open Meeting back in December. If you have not already completed these modules, these group discussions are a great way to find your way through.

A buffet lunch will be served at 12.30pm, which members are welcome to attend whether they have been to the morning training session or not.

The main open meeting will take place between 1.30pm and 5.30pm starting with an update of recent AMNT activity, including John Gray’s DB Defence Pack, which is aimed at helping trustees of DB schemes that are faced with closure.

Janice Turner will then go through a recent AMNT submission on smoothing which she has been leading. This will be followed by a presentation by our hosts AXA on how various overseas countries have approached the question of smoothing.

After a break for tea, Colin Meach will give a presentation on recent developments in Public Sector Pensions

Finally, the day will conclude with Robert Inglis, a Project Director from the Financial Reporting Council, explaining Technical Actuarial Standards (TASs), which have been in force for almost three years and getting feedback from the floor.

After the meeting has closed, there will be the usual networking opportunity with drinks provided by our hosts AXA

There are limited places available for this event, so please let us know as soon as possible if you are able to attend. Click on one of the below links and let us know by email, including whether you have any dietary requirements if you plan to attend for the buffet lunch.

- Click here to join the AMNT

 - Click here if you would like to attend for the whole day, including Trustee Toolkit training, lunch, AGM and open meeting.
- Click here if you would like to attend part of the day (please specify which part/s).
- Click here if you are unavailable to attend any session on the day.

 Kind regards,
AMNT Committee

"...the greatest threat to your pensions - Ever"

On Wednesday lunchtime there was a meeting of the UNISON London Region Pension network at ULU. This is a quarterly training meeting of UNISON member nominated representatives who sit on London Local Government Pension Scheme (LGPS) committees and members who are interested in pension issues. Our guest speaker was Colin Meech, who is the UNISON national officer for its Capital Stewardship Programme.

These are my notes of his presentation:  Colin pointed out that this current government is committed to cutting £85 billion in expenditure during the last 4.5 years. They charged Lord Hutton to find savings in public pension schemes to reduce government debt. Hutton was not responsible for the decision to change pension uprating from the RPI to the CPI index. Which it is estimated will "rob" £85 billon from pensioners in public schemes in the next 15 years.

It is proposed to raise contributions by 3.2% of income (over 50% increase in actual "real money" contributions). In the LGPS they aim to reduce government grant to councils by £900 million over 3 years. However, UNISON has sponsored research by the respected Dutch pension group AGP which found that if the 101 different Council pension schemes which together manage £160 billion in assets were to be merged into 14 it would cuts costs and increase income by a staggering £1.2 billion per year. But if pension contribution are increased by 50% then this could cause masses of members to leave the scheme.

Especially after the years of 0% pay rises ("pay cuts" when you take into account inflation) that Council staff have suffered. If employees leave the scheme because they cannot afford contributions then this will make it even more expensive, lose economices of scale and could lead to the collapse of the scheme. Many will then have to depend on state benefits when they retire.

It does not make sense to put at risk a long established pension scheme for 4 million people, which saves the government untold billions of pounds in benefit claims at risk, to save £300 million per year, when we could earn £1.2 billion by merger?

TUC Trustee Pensions Conference 2010: “Shareholder Resolutions”

This post is yet another very late "catch-up".  The  annual TUC Pension Conference is the "Trustee" event of the year.  It was held at Congress House in London on 22 November 2010 and was packed out.

I missed most of the morning due to a regional committee meeting and came in during the end of the Stewardship Panel Q&A. 

I then went to a workshop on “Shareholder Resolutions” led by Tom Powdrill from PIRC, the notoriously shy and retiring UNISON National Capital Stewardship officer, Colin Meech and Unite National officer, Jack Clarke (see above left to right).

Tom explained that in December 2010 fund managers must explain why not or publish their voting record at the AGM’s of the companies whose shares they “hold” on behalf of investors.

To be able to table a motion at a British AGM you need 5% of total voters or 100 x £100 nominal value (Nominal £10k). You must table this motion within strict time limits to prevent the company charging you the full costs of circulating details of your motion.

There have been 8 Environmental Social and Governance (ESG) motions in the last 5 years. Mostly led by trade unions. Warning that many companies see such motions as a confrontational tactic. So you should try and make it appear constructive? Not "anti-company". Instead of appearing to give instructions make suggestions. However, direct motions may well be the only realistic option if companies are being unreasonable. To get the vote out you must contact all major shareholders, investor representative bodies and meet them - preferably face to face.

But you must demonstrate you have tried to engage with the company first. Note fund managers generally vote against ESG motions. Even those who claim to be supportive of ESG principles.

The LAPFF "Marks and Spencer" motion against a combined company chief executive also being the company chair was a landmark occurrence. There had been significant engagement beforehand about best practice. Stuart Rose now says that it was his worse mistake (not to separate the roles of Chair and CEO). Marks and Spencer have now a separate Chair and CEO and comply with best practice. The panel were "disappointed" that L&G tracker fund managers voted against this (why on earth did L&G do this?) and that they had 4.5% share of the company. Remember that there is only usually 50% turnout of shareowners at AGM's.  So you can have a greater affect even if you only have control of a smaller number of shares.  The ESG motion on anti-trade union activities of First Group in the USA did result in significant change in company behaviour.

Colin talked about the Fair Pensions BP/Shell Tar Sands motions and the UNISON staff pension fund which helped bring it about. UNISON staff pension scheme has a broad screening programme such as not to invest PFI contractors.They cleared the proposed motion with the Canadian PSI trade unions beforehand. The motion fitted UNISON policy on climate change. It was crucial to get the support of the large American public sector funds. 45% global pension funds are in the USA. He reminded us all of the Freshfields legal opinion's that such “responsible” investment is a fiduary duty of Trustees. Colin recommended the book Hawley and Williams “The Rise of Fiduciary Capitalism”.

Jack Clarke pointed out that Unite spend 10% of their budget on organising. He talked about the Meat workers campaign. They gained 10,000 new members and 250 new stewards. A key issue was agency working. Agencies undercut permanent workers and exploited staff. The Union wanted equal treatment. They worked on a supply chain strategy. 85% of the meat market goes to retail shops. They pushed Tesco and other large UK retailers in a pincer movement, above (by share motions) and below (from workers). Tesco is a key market driver. They tabled a solution at the AGM with West Yorkshire Pension Fund on this issue. 11% shareholders voted in favour and 7% abstained. There was widespread press coverage. ASDA signed a deal with Unite for equal treatment in the UK and Ireland. 50,000 workers affected in the UK and gained parity of pay and were now usually made permanent after 13 weeks agency work. Lessons: Resource intensive; you need to have economic as well as morale case. Needs to be more active engagement with trade union trustees. It is vital to deliver bottom up pressure on fund managers.

UNISON NDC fringe - Socially just solution to the global economic crisis

This conference fringe on social justice and promoting an alternative to CONDEM savage cuts should be really interesting.

I assume that it will also complement the planned speech to conference on the Thursday morning by Richard Wilkinson about his book (co-authored) “The Spirit Level - Why More Equal Societies Almost Always Do Better”