Pension v ISA: what future for workplace saving? 27th June 2.30-4.40pm

This should be fascinating. A debate between the quiet and unassuming, Michael Johnson and trade union Baroness, Jeannie Drake on the future for pensions (or is it workplace savings?)

 

"Dear colleague
 

The coming year will be pivotal for the future of UK retirement savings with a major review of automatic enrolment and the launch of a potential rival to workplace pensions in the Lifetime ISA.

On June 27, the TUC is to set out its proposals for the future of automatic enrolment with the publication of a report Unfinished Business: where now for workplace pensions?. It continues the long-standing campaign by the trade union movement to secure decent retirement provision for all workers.

The report will be launched with a debate between two of the foremost figures in devising these contrasting approaches to saving for retirement.

Baroness Drake was one of the three members of the Pensions Commission that revolutionised workplace pensions saving with its advocacy of automatic enrolment a decade ago. She is also a Labour peer and former Deputy General Secretary of the Communication Workers Union.

Michael Johnson is a Research Fellow at the Centre for Policy Studies who has provided much of the intellectual ammunition for a move towards an ISA-based system for retirement savings.　 A former investment banker, he later worked for an actuarial consultancy and ran David Cameron’s Economic Competitiveness Policy Group.

The event will be chaired by TUC Deputy General Secretary Paul Nowak.

It will take place at Congress House with registration from 2.30pm for a prompt 3pm start. The event will finish by 4.30pm.

This event will be of interest to trade unionists, policy experts, pensions industry representatives and others.

To register please click on the link below:

https://www.eventbrite.co.uk/e/pension-v-isa-what-future-for-workplace-s...

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. 

The Enlightened Shareholder

Last week I went to the launch at the House of Commons of the report "The Enlightened Shareholder: Clarifying investors'

fiduciary duties" by Fair Pensions.

The speakers included "Professor John Kay, who is currently leading a review which looks into long-termism in the UK equities market; Saker Nusseibah, Acting CEO of Hermes; Roger Urwin, Global Head of Investment Content at Towers Watson and Baroness Jeannie Drake".  Fair Pensions CEO, Catherine Howarth, chaired the meeting and its author, Christine Berry presented the report.

The big issue is whether or not the "fiduciary duty" of shareholder representatives (and trustees) ought to be legally redefined to deal with "crony capitalism and excessive executive pay". Pension trustees (and member nominated representatives) still come across advisers who tell them (completely wrongly I think) that  their only role is to "maximise returns" of the scheme regardless of the impact it has on stakeholders, the wider economy and even the long term interests of the scheme. Which is clearly stupid and frankly bonkers. But it happens and it needs to be dealt with.

I think this problem is widely recognised but there is the usual dispute about the solution. Should this be by statutory regulation or some sort of a voluntary code? As pointed out in the debate we have tried the voluntary approach for a long, long time. It has clearly failed due to agent self interests and conflicts. We need to regulate.

Personal Pension Accounts – Get Rid of Poverty in Old Age?

Wednesday lunch time fringe with Pension minister, Mike O'Brien (far left) and Jeannie Drake from the TUC. First time I have seen Mike in action.

He seemed to deal very effectively with “Cheeky Chappie” Chair, Liam Halligan (Sunday Telegraph) over the compensation for the 250,000 pensioners whose schemes collapsed before present day safeguards. He gave a hint that there could be further help for these pensioners.

In the Q&A I was able to make a plea to Mike to ensure that the future Pension Personal Accounts scheme has proper independent (trade union) trustees on the board.

In order to explain why I and many others have such a mistrust of most (not all) financial practices and institutions in this country. I shared with the meeting my past, less than glorious, financial acumen. For example I was “sold” a low cost, low start, with-profit Endowment policy to pay off my first mortgage and had a company AVC pension policy with the Equitable Life!

I suppose as UNISON London Finance Convener I really should keep such things quiet?

However, this amongst other reasons is why I am extremely suspicious of our financial service industry in general and also I think the Northern Rock fiasco is just the latest in a number of scandals that could result in a complete collapse of confidence and the failure of the vitally important PPA. People will not join the PPA if they do not trust it and think it is not properly run. Please keep industry interests well away!