TUC Trustee Conference 2011: Fiduciary Duty for Trustees

This is from last weeks TUC Member Trustee Network Annual Conference at Congress House.  I missed the morning session due to regional meetings.  Which was a shame.  Especially the

Steve Webb MP (Minster for Pensions) keynote address.

I came in during the end of the panel discussion on "Fiduciary duty for Trustees". Which in the exciting world of pensions is a "hot topic". It use to be the case that Pension Trustees were told that they could not consider any other investment issues except maximising financial returns. This has recently been turned on its head.

As panel member,Thompson's solicitor Ivan Walker put it, there could be a breach of your duties as a trustee if you do NOT consider environment, social and governance (ESG) issues. Will Oulton from Mercer pointed out how many companies boast about their Corporate ESG activities yet when you ask them about their company pension fund ESG you get blank looks.

Christine Berry from Fair Pensions asked trade union pension trustees to reclaim their funds from outdated dogma which suits the interests of the financial services industry. I'll post further on the conference when I can.

UNISON national seminar on Representation and Governance in LGPS

I am still playing catch-up with posts. This is on the seminar I attended last month on the Local Government Pension Scheme (LGPS). UNISON is leading a campaign to improve the governance of the LGPS. This is important to our members since a badly run scheme would result in its demise while it is also important for the wider economy. It the biggest pension fund in the UK with asserts worth £125 billion (2008). These asserts need to be managed effectively and safely. We have all seen recently what happens when there is there is poor governance and regulation of capital.

I see that the former head of the CBI, Sir John Banham, has written a report (RSA – Tomorrow Investor) “called for pension funds to take greater responsibility for how and where their money is invested, with trustees acting as ‘owners of companies’ rather than as ‘speculators in shares’…investors must ‘bridge the ownership gap’ and insist that fund managers only invest in companies where they are fully satisfied about the long-term potential for business.

All other funded pension schemes in the UK have statutory obligations to have member nominated trustee representatives involved in the governance of their pensions. This was to stop Rogue Company bosses like Maxwell stealing from pension funds and because it as felt that the best people to scrutinise the running of a pension scheme would be the representatives of the savers. This view was endorsed in a number of government reviews (Myners Report for one).

The LGPS has no such statutory obligation. While there is a Government “best practice” guide, which encourages member representation. There are no real sanctions against employers who wish to continue to run their schemes in secret and without being held to account what they do with other people’s money.

It was a well attended event with existing “member nominated representatives” (MNRs) and people interested in becoming MNRs from all over the UK. Keith Sonnet, the UNISON Deputy General Secretary was the keynote speaker. National Officer, Colin Meech gave an update on negotiations with the CLG. The CLG have now conceded that they need to change the scheme to comply with EU and British law. There was a legal briefing by Ivan Walker from Thompson’s solicitors followed by two different workshops in the afternoon. Finally, UNSION Pensions officer Glyn Jenkins gave an update on the negotiations with the CLG over LGPS benefits (as opposed to governance). The campaign continues.

(I will add photos of event another time)