Dancing on the graves of decent pensions: Double Bubble for the Few, Misery for the Many

There was a really rubbish and ignorant article here in the Evening Standard recently about a so called "black hole" in London Local Government Pension schemes.

This story is completely nuts. Most Local Government Pension Schemes are in better shape now than there have been for decades. Many are close to being fully funded. I note that the Standard did not bother to check its facts or get an alternative view.

The lies and untruths told by some of the financial services industry about defined benefit pensions is simply shocking. The totally unnecessary destruction of defined benefit pensions in the private sector will go down as one of the greatest financial scandals there has ever been. Countless millions of Brits and their families have been deprived of any chance of a decent pension by this scandal and will have to retire and die in poverty or work until they drop.  While their dependents and kids are left destitute if they die or become ill.

While Government, regulators and employers deserve their share of the blame, many financial advisers have made pots of money by closing schemes and then opening expensive new inferior Defined contributions schemes. Double bubble for few: misery for the many.

Check out the statement below from Cllr Forhad Hussain about the facts.

"The recent Evening Standard article https://www.standard.co.uk/news/london/council-pensions-black-hole-grows-to-17-billion-soaring-20-in-a-year-a3791756.html made a misleading and inaccurate link between an international accounting standard number and the pension contributions made (and by inference the level of services provided) by Councils.

Council pension contributions are determined by a valuation process which takes place every three years and certified by a professional actuary in accordance with Government regulation. The last of these took place in 2016 and in fact showed a £10bn reduction in the deficit across England and Wales when compared to 2013.

With regard to the Newham Fund having the highest ‘deficit’ in the 2016 valuation, it actually showed an improvement in funding levels to 85%, a £97m reduction in the deficit to £201m from the last valuation in 2013. Since then funding levels at Newham have continued to improve and are currently estimated to be in the region of 94%. The reduction in pension deficit enabled the Council to make £4m savings per year in its budget strategy enabling resources to be reallocated to help maintain vital services. The Government Actuary has also checked the actuary’s valuation and concluded that that the Council is “paying enough” into the pension fund. 

The accounting number quoted in the article is NOT used to determine council contribution rates (nor anything else with regard to the council pension scheme) and therefore has no impact whatsoever on the resources available to services.

Please also be aware that the Local Government Association also support the above and our position on this matter.

 

Interested readers can find more information on the 2016 valuation of council pension funds in England and Wales on the authoritative Scheme Advisory Board website http://lgpsboard.org/index.php/2016-valuations-summary.

If you have any queries on the above please do not hesitate to contact me.

Cllr Forhad Hussain

Chair of Investment and Accounts Committee

London Borough of Newham

Newham Town Hall, East Ham, London E6 2RP

Why do the Tories love the financial services industry? Follow the money...

"The latest figures from the Electoral Commission reveal that in the last quarter, hedge funds gave the Tories £1.34 million in donations, bringing the overall total to £51.1 million. These are, of course, the same hedge funds which were given a tax cut worth £145 million by George Osborne in 2013.

A further analysis shows that almost £3 million of donations in the last quarter came from donors who have attended exclusive private dinners with David Cameron and other senior ministers, taking the total to £7.7 million from dinner donors in 2014.

Shadow Cabinet Office minister Jonathan Ashworth said: “The Tory election campaign will be funded by those who dine exclusively at the PM’s top table and a select few in the hedge fund industry. They have been given tax breaks while hard-working families are struggling to make ends meet. The Tories are standing up for those at the top at the expense of working people across the country. Whether putting private profit before patient care in the NHS or siding with the energy industry over consumers struggling with the cost-of-living crisis, David Cameron stands up for the wrong people.”

Contrary to David Cameron’s 2010 election pledge, the Conservative party still relies heavily for its funding on individuals and companies associated with asset management. The most recent donations include: just under £303,000 from Michael S Farmer of RK capital management; over £260,000 from James R. Lupton of Greenhill; £176,000 from Christopher Rokos of Brevan Howard; and almost £112,000 from Andrew Law of Caxton Europe Asset Management. But given that Conservative party membership has fallen by over 100,000 since Cameron took over as Leader, it is small wonder that he is relying on a small pool of mega rich donors who can buy access to ministers. The latest figures show that they amount to 40 per cent of all party donations, up from 25 per cent in the quarter starting from April this year.

In June, in response to a question from Labour and MP and Tribune columnist Stephen Pound, Cameron promised to publish the results of Lord Gold’s inquiry into the cash-for-access scandal. He still has not done so. No surprise there, then".

Hat tip John Street's Diary at Tribune 

Why Union £ is the cleanest in politics : Moonlighting MPs - the politicians with second jobs in financial services

From Money Marketing: This is so, so wrong. Hat tip Gregg McClymont MP.

"The revolving door of former FCA regulators joining banks and accountancy firms has created understandable hostlilty from advisers but it is also worth taking a look at the MPs with commercial interests associated with financial services.

Every MP working in financial services is a Conservative with some working up to nine hours a week and earning hundreds of thousands of pounds in outside income.

All data is published on the House of Commons’ register of members’ financial interests and only includes regular remunerated employment for financial services firms:

Former Tory chief whip Andrew Mitchell has been hired by Investec as a senior strategic adviser earning £60,000 a year for 10 days work. Alongside serving as an MP for Sutton Coldfield, Mitchell will work almost a day a month for the bank. 

MP for Cardiff North Jonathan Evans

Jonathan Evans earns £110,000 a year for 14 hours work a month as non-executive chairman for Phoenix Holdings including Phoenix Life Assurance, National Provident Life and Phoenix Life.

Evans is an FCA approved person and chairs monthly board meetings in London as well as regularly advising the firms’ executive officers.

Until 3 December 2012, he was non-executive director and chairman of London Life Limited and Phoenix Pensions. "Until 7 August 2013 I was also non-executive director and chairman of NPI".

On the register of members’ interests, Evans says: “These companies are long established life assurance and pensions companies, closed to new business and now owned by Phoenix Group (formerly Pearl Group) of which I was group chairman from 2005 to 2009.”

MP for Cities of London and Westminster Mark Field

Mark Field works as an adviser to Cains Advocates, an international law firm, assisting with its international strategy, ambassadorial work and advising on Government and parliamentary aspects of financial services.He is paid around £40,000 a year for approximately 10 hours a month work.

MP for North East Somerset Jacob Rees-Mogg

Jacob Rees-Mogg is director of investment management firm Somerset Capital Management LLP.

He was paid around £134,400 in the last year for 35 hours a month work at the firm.

 MP for Sutton Coldfield Andrew Mitchell

Investec has hired Andrew Micthell for £60,000 a year for 10 days week. The former Chief Whip was forced to quit the cabinet last year after he was accused of swearing at a policeman and calling them “plebs”.

MP for Mid Sussex Nicholas Soames

Nicholas Soames is a senior adviser on insurance and related financial services to insurance broker and risk advisers, Marsh Group .He attends meetings and advises on business opportunities and earns £92,880 a year for 15 hours a month.

MP for Tonbridge and Malling Sir John Stanley

Sir John Stanley is a consultant on financial services to Fidelity, attending meetings as necessary and advising on business opportunities and risks.He earns £21,600 a year for between five and eight hours per month.

MP for Louth and Horncastle Sir Peter Tapsell

Peter Tapsell is an international adviser to the Mitsubishi UFJ Trust and Banking Corporation (Japan); a Japanese Trust Bank in both Japan and overseas.He earns £30,000 a year, paid semi-annually, for around 10 hours work a month.

MP for North Herefordshire Bill Wiggin

Bill Wiggin is a non-executive director international finance firm Philip T English International Financial Services.He earns approximately £5,000 a year for 60 hours work a year.

MP for Rochford and Southend James Duddridge

James Duddrige is an adviser on strategy and business development to  Wilcocks & Associates, a financial planning firm in Liverpool. Duddridge receives £6,000 a year for an expected commitment of approximately one day per month.