UNISON National Delegate Conference 25: Day One

 

Today (Tuesday 17 June) was day one of the UNISON National Delegate Conference 2025, which is taking place in the ACC, Liverpool. This is certainly the largest trade union conference in the UK, if not Europe, with over 2,000 delegates and visitors.

I am here as an elected member of the UNISON National Executive Council. So I had to be up early for firstly, a short morning run/jog along the River Mersey, breakfast, then a pre conference meeting of the NEC at 8.30am. Which went I think pretty well and there was a couple of interesting votes. 

Then as also being a UNISON Greater London elected Regional Council officer, I was asked to help out our regional  delegates with the sometimes "difficult" but important task of assisting our London delegates with finding out where their allocated seats are on the conference floor. 

Conference started a little late due to queues of delegates and visitors waiting to get through security at the main entrance.  

The morning debate was chaired by current NEC member and respected former President, Maureen le Marinel, who is a super competent and very fair chair. Such a relief to have someone like Maureen Charing NDC after some shambolic and very destructive chairs in the recent past.

We all watched the names of UNISON members, activists, friends and officers who have died during the last year displayed on the screen behind the platform while listening to beautiful music.  

I was so pleased that conference supported our elected Chair of the Standing Order Committee, who had to report that motions that broke the rules of our union (decided upon by 2/3 majorities by previous conferences) could not be debated at this conference. It was in my personal view, a complete and utter waste of conference debating time that we had to listen and vote on the same arguments, time and time again for every single similar challenge. 

Conference went largely ok afterwards. We had the Annual report and the Financial statement. Then we debated motions. There were many good speakers on important issues but also in my view some completely negative and I suspect deliberately destructive views by political opponents of the current Labour Government. Which is fair enough, but please declare your party card when you do so.  I hope and think, I always make it clear my affiliations when I speak?

During lunch I attended a really good panel fringe on DC pensions. My question to the panel was how can we protect our members in DC pensions schemes, who are not able to physically to carry out their job but have no ill health retirement protection. I think that we need the Government to intervene on this.

It was great that current NEC member and former President Margaret McKee chaired the afternoon session in the similar fair but no nonsense manner as Maureen. 

After conference I attended a fringe on  a new proposed UNISON app for members which looks really good and as long as we have sufficient resource to keep it updated and relevant should be brilliant. 

Trade Union Congress Delegate 2023

Today I received my credentials as a UNISON delegate to this year's Trade Union Congress (TUC) in Liverpool next month. 

I am speaking in a pension fringe on Collective Defined Contributions schemes and will hopefully get involved on other pension, housing and "fire & rehire" debates. 

Newham Pension Committee - 27 July 2022

 A really constructive & well chaired meeting.  Cllr Dr Rohit K Dasgupta first meeting as Chair. 100% agree that we need to thank @NareserOsei for her great work as previous chair (and our officers and advisors)

Committee Workers Capital (CWC) online Conference 2020 - The Road Ahead

 I logged on this evening to the first session of the Conference. The CWC describes itself on its website "WorkersCapital"   "With over 700 participants from 25 different countries, the Committee on Workers’ Capital is an international labour union network for dialogue and action on the responsible investment of workers capital. We connect labour activists and asset owner board members from around the world to promote information sharing and joint action in the field of workers’ capital. We are a joint initiative of the International Trade Union Confederation (ITUC), the Global Unions Federations (GUFs) and the Trade Union Advisory Committee to the OECD (TUAC)".

I have been to physical meetings of its annual conference in London and Amsterdam in the past and always found them really interesting and useful. Obviously this year's setting it is very different.

The conference was opened by Tuur Elzinga, Vice-President and International Secretary of the Dutch Confederation of Trade Unions (FNV), Chair of the CWC.

Sessions start 4pm (Current UK time) and last 75 minutes. There are recordings available of each session. There are also 3 "Campaign Spotlights", an interactive space where CWC participants will showcase a priority initiative from their union.

you can register below

https://www.eventbrite.ca/e/cwc-2020-virtual-conference-tickets-123523793993

My question to session one panel "What does the panel think about pooled pension funds that refuse to allow asset owners to vote shares at AGMs in line with their ESG policies. Or is this only a British problem?" but panel ran out of time. 

16 Nov 

DAY 1: 4pm for 75 mins
How do asset managers view and incorporate worker-backed evidence in public equities?
This session will evaluate current practice and potential to improve how asset managers incorporate trade union and worker provided information in their evaluations of companies. (Chaired by Janet Williamson from TUC)

The first Campaign spotlight for today was by on UNICARE on the need for workers capital to take action over Covid 19 and nursing home deaths. A fascinating presentation which shows that "for profit" nursing homes suffer more deaths led by Adrian Durtschi, Head of UNICARE (Switzerland) and Lisa Nathan, Investor Engagement Advisor . Next spotlight was "Democratic Capital and workers voice" by Dr. Ewan McGaughey, King's College. A much needed argument to win a more accountable economy.

DAY 2: 4pm
Racial Justice and the stewardship of workers' capital
Global protests from the Black Lives Matter movement have brought attention to systemic racism in every corner of the economy. This session will begin with a panel of speakers, followed by a participant-led Q&A to share perspectives and strategies on how investors can approach the issue of racial justice.

DAY 3: 4pm
Tools and examples to hold asset managers accountable
This session will review recent tools and examples used by asset owners to hold their asset managers accountable on ESG issues, with a particular focus on the "S".

DAY 4: 4pm
Charting the Road Ahead: A strategic brainstorming session on CWC priorities for 2021
This interactive session will be an opportunity for participants to share their views on priorities for the 2020-2021 CWC workplan. What does a worker-centric agenda look like in this new context of a global health and social crisis? Discussion will be facilitated using a mix of discussion groups and open-ended discussion

Vote for Worker Board Members at Walmart AGM for better Governance and to tackle Covid-19 pandemic

Today I took part as a pension trustee in a online seminar with USA Walmart workers and their trade union, about governance and the abysmal response of the retail giant Walmart to the Covid-19 emergency.

Their workers spoke about the dangerously confused and fragmented response by management, which meant that workers and customers were put at unnecessary risk with little or no PPE provided, inadequate or non existent measures to social distance nor proper deep cleaning of stores.

It sounded like a complete and utter "f**k up", made worse by a woeful provision of sick pay for staff if they become ill and inadequate (at best) company medical insurance.

Next week there is the Walmart shareholders Annual General Meeting and there is a resolution calling for some of the company board members to be elected by its own staff.

If you look at what has happened with the very low levels of Covid-19 in Germany, which has had worker board members as a norm for decades, maybe this shows how companies have better governance and are more safely run if they have worker reps on their actual board.

I made the point at the seminar that as a long term investor I don't want for us to invest in a company that treats its staff badly and puts them and its customers at risk in a pandemic. It is not only morally (and legally) wrong but a bad decision to invest in a company that is so poorly run in an emergency that it allows its staff and customers to be put at deadly risk!

The AGM is next week and the motion for elected worker reps is proposal 7. Please contact your Pension or fund managers and if they own stock on your behalf in Walmart let them know your views. 

Rising inequality helps explain Trump and Brexit

While I hope that the United States will not elect Trump to be their President tomorrow, I was
fascinated to read the statement below at a recent Newham Council Investment and Accounts committee.

"Even if Trump loses, the anti-Establishment, anti-trade and anti-immigration sentiment will not go away until rising inequality with rich countries is addressed and reversed". 

This was in a report by our economic advisers to our billion pound staff pension fund, Fatham Consulting. Who are not known to be any sort of lefty think tank.

At the end of the meeting I asked their consultant if I could quote them (he agreed) and also what other Marxist analysis did the firm believe in? (to which he just grinned).

I think they are 100% right and that people need to understand that the rise of Trump and the vote for Brexit was driven by a backlash against rising income inequality.

Not every supporter of Trump is motivated by this and there was plenty of principled support for Brexit but if you have a rubbish, poorly paid insecure job with no future, no access to decent housing or public services then you are going to be angry and want to protest and thump the establishment.

Ordinary working people either side of the pond feel betrayed by years of declining wages while the very rich just get more and more wealthy.

I heard a Tory minister yesterday on the BBC describe Brexit as a "punch" to the establishment similar to the 1945 General election result. I think he is right about this but I think that the Tories are simply incapable of any meaningful reform.  We need to deliver another "punch" to the system as we did in 1945 at the next General election and elect a radical alternative government which will genuinely tackle and reverse inequality. 

What to do if you are a trade unionist with a pension manager that attacks you?

Check out another great post by  Tom P

"Ahh.... Fidelity, the lure of right-wing British politics is just too strong for you isn't it?

I've blogged previously about the latest Fidelity link to the Tories - their involvement with the Leaders Group. According to the Conservative Party's own website this is the "premier supporter group" for the Tories, with an annual membership of £50,000.

As if you were in any doubt about which party Fidelity were rooting for in the General Election, the Q1 2015 disclosure of which "major donors" attended Leaders Group meals in the first quarter shows that both Barry Bateman and Simon Haslam represented Fidelity (FIL Holdings in the list). It isn't clear if the were both at one meeting, or if more than one was attended. As well as being a board member of FIL, Simon Haslam is of course also chair of Colt, where Fidelity is the major investor.

Of course the Conservative Party has embarked on a major assault on trade unions since the election, something that was trailed in their manifesto. If you are a trade unionist who is a pension fund trustee or otherwise has some involvement in this area you might want to choose asset managers who don't fund attacks on you".

AMNT stall at Workplace Pensions Live 2015

On Thursday I went for a flying visit to Edgbaston, Birmingham to take part in a panel on the second day of Workplace Pensions conference.

The theme of the panel was "View from the coalfield - This session will explore the role of unions on trustee boards, and the conflicts union members may face in their interactions with employers and members".

I was speaking with Bill Trythall (see on right of picture), a trade union appointed director, of the massive university pension fund USS.

The session went okay I think and afterwards Bill and I joined our colleagues at the Association of Member Nominated Trustees (AMNT) stall.

I had to rush back to London for the Newham Council AGM. 

The amount of cash benefits to rich has gone UP since recession

You don't have to be a raving leftie to think this is completely wrong and bonkers.

Inequality Briefing have found that the "Between 2007 and 2013, cash benefits paid to the richest fifth of the population increased by 42%. For the poorest fifth, benefits fell by 5%"

Tory Welfare reform has meant that the poorest have had their income reduced while the richest have seen their benefits increased.

This is mostly due to increases in the state pension to very rich (top richest 20%) pensioners.

"All in this together"? 

Essential cover at work. Join UNISON now on 0800 328 11 22 or http://joinunison.org

Another powerful TV advert from UNISON explaining the many advantages from joining our union. One of the worse things about being a union rep is explaining to people facing redundancy, bullying, disciplinary or sickness proceedings, that I am unable to help them because they are not members or have only joined after they were aware of an issue. (UNISON has like every other union has a waiting period before representation).

If you value your job then join a union. Union reps do not have any magic wands but believe me it can be so frightening and scary if you have a problem at work and have no one to turn to for help. Even in the very best of employers.

Of course, the key thing about joining a trade union is that the more of us in the union in any employer, the better the deal we will get - the better the pay, the better the health and safety, the better the pension, the better the maternity pay, the better the sick pay' the better the flexible working - the better all fringe benefits and employment policies.

This is something our Grandparents knew but has sadly be lost in recent decades but I think workers are beginning to realise again that they cannot rely on their employers or the courts for justice at work, they can only rely on their union and their work colleagues.

So if you work for any (none civil service) employer providing public services, don't delay and look to join UNISON now! (online 24/7). Do not leave it until it is too late!

Why is this government destroying Pensions, Charities and Jobs?

This morning I read about the Charity "People Can" being forced into administration and 300 jobs being put at risk.

I don't know all the reasons why this has happened but we are told it was due to its "pension liabilities". Whatever that actually means?

But I do know that the charity and its workforce protects victims of domestic violence, stops ex-offenders reoffending and gets the homeless into secure and safe accommodation.

The  Administrators, PriceWaterhouseCoppers (PWC), is not of course an evil organisation, however is not that well known for its concerns about battered women, ex-cons wanting to go straight or homeless kids desperate to get off winter streets.

It is known that "People Can" has a history of financial insecurity.  But I wonder what is the real reason for the "pension liabilities" (or deficits) in the first place that are supposed to have led to the potential sackings and loss of vital services? Was it due to inadequate financial planning or that its defined benefit pension scheme was in some way unsustainable?

No one has mentioned either about whether the pensions of the charity staff are truly safe or are they being subject to the tender mercies of the "Pension Protection Fund"? The PPF is a "good thing" but do not think for a moment if the PPF steps in that you have nothing to worry about your retirement. You do.  If you haven't already retired you may find your future pension significantly reduced.

My biggest gripe is that this closure and threat to peoples pensions in "People Can" and elsewhere could be based on complete and utter stuff and nonsense.

Due to outdated and deficient accountancy rules called "Mark to Market", perfectly good defined benefit pensions schemes are going to the wall. Sometimes bringing their organisations down with them. For no good reason. Perhaps we ought to shout out the emperor has no clothes – these so-called pension deficits are not real! They do not reflect the true future costs and liabilities facing pension schemes.

Schemes usually have to price these costs according to the return on Government loans called gilts. Due to our abnormal economic conditions these gilts currently have negative prices. This means scheme deficits have increased massively and have nothing to do their underlying strengths or weaknesses.  Quantitative Easing (QE) by the Bank of England is making things even worse. This has resulted in gilts yields being in even more La La land. They are at a 200 year financial low.

Everyone knows this but why is it allowed to happen and destroy perfectly good pension schemes and then make its members live and die in poverty? Even worse, relying on the tax payer to subsidise poverty employers who pay their pension pittances. Is this the sort of society that we really want?

The government has committed to act on this but has just  failed to do so! The Pension minister Steve Webb promised in June to do something about what he called this "nightmare" which is "killing" perfectly good pension schemes and that he would "not idly stand bye" and let this happen.

I'm not holding my breath Steve. Many more jobs, services and decent pensions schemes will not last, unless you, Clegg and Cameron get their fingers out and do something.

'Find it, Get it, Get rid of It' Argos staff Pension scheme

 Workers at retail giant Argos have started 4 days of strike action to save their pension scheme from closure.

Unite reports that "1,200 drivers and warehousemen have been on strike this week at the Argos distribution centres at Basildon, Bridgewater, Lutterworth in Leicestershire,
Heywood in Lancashire and Castleford".

They have been striking since Wednesday and the strike ends at 6.00am on Monday (24 September). Argos want to close their defined benefit scheme and replace it with a money
purchase (defined contribution) scheme worth 50% less.

I haven't got all the full details but it seems so far that Argus are claiming they have to close because the scheme is in "deficit".  This excuse is usually rubbish. 

If your employer claims that it has to close its pension scheme then firstly consider the following "Rules" (Excuse me for SHOUTING but it is important).

 

Rule Number One: Closing your pension scheme DOES NOT GET RID OF THE DEFICIT it could MAKE IT WORSE! If you have a deficit then it still remains on the Company books even if you close it to future contributions.

 

If you close the scheme you have no new money coming in and have to sell your best investments to pay existing pensioners. This is crazy. All you do is hand out a blank cheque to your advisers to run a smaller and smaller, ever more expensive liability with little or no chance of any upturn.

 

Rule Number Two: Your so-called pension deficit figure IS NOT REAL, it is measured in "FUNNY MONEY". Pension deficits are worked out according to something called "mark to market" accounting. Which is completely lala.

 

The deficit for many schemes can vary day to day, week to week, month to month, by millions and millions (and even more for bigger schemes) of pounds, regardless of the real strengths of the fund.

 

Not only that but many schemes are valued according to the interest rate of UK government loans called "gilts" (don't ask). Due to the current completely bonkers Alice in Wonderland economy, these gilts return are currently at a 200 year low, yet they are still used to decide whether your pension scheme is in good shape or not! MADNESS.

 

The Government Pension Minster, the Bank of England, the CBI all recognise that this is nonsense and things will have to change, but so far they have done nothing. But why close your scheme forever, when you know that its rules will change soon, for the better!!!

 

Rule Number Three: Unless your employer contributes enough money into a decent pension scheme you and your spouse will retire and DIE IN MISERABLE POVERTY.

 

There are Rules Number Four/Five/Six or even Seven: but they don't really matter. Rule Number Three trumps them all.

 

There is more stuff workers and trustees can use. The AMNT will be publishing a detailed guide to help trustees defend their scheme soon. We will also give personal help and support to any AMNT member trustees facing this problem.

 

Good luck to the Argos strikers fighting to defend their futures.

Vote ACCEPT to protect your LGPS pension

Minister wakes up to Pension "Nightmare...Killers"

I'm still catching up after last weeks UNISON Conference bubble only to read that Lib Dem Coalition Pension minister, Steve Webb, has finally woken to the completely nonsensical "mark to market" accounting standards which are (quote) "a complete nightmare" and "killer" for pension schemes.

Private sector defined benefit pension scheme value their liabilities  (how much they owe current and future pensioners) by using the yield of 15 year government gilts (bonds/loans). These yields are at a historic 200 year low due to the Euro crisis "flight to quality" and the governments quantitative easing policy.

"Mark to market" accounting is now completely ridiculous Some pension commentator's are scaremongering since they can make more money out of closing pension schemes rather than keeping them open and because of this some employers are panicking.

I hope indeed that Steve will "not stand idly by" and do something. I am not sure however that his coalition partner's have enough about them to stand up to huge vested interests who appear to be quite happy for decent pension schemes to continue to go to the wall.

Hat tip thingy TGLD

Members (not Miserablists) to decide on pensions

Today the annual conference for UNISON members who work in Local Government opened in Bournemouth.

I no longer work in Local Government so this year I was not present but I will be down for the UNISON National Delegate Conference on Tuesday as the NEC member for Community.

However, as a long standing member of the Local Government Pension Scheme (LGPS) I was very pleased to hear that the Local Government conference today rejected calls to oppose the new proposed LGPS 2014 and it will now go out to consultation to all members.

Check my post here on "The new LGPS 2014 (and the old Miserablists)".

I did follow some of the debate via twitter on #ulgc12 and #undc12 and apart from the usual silly trolls I was surprised to see how some delegates who lost the vote and therefore disagreed with the democratic decision reacted by attacking their own union for being "cowardly"? Which does make me really wonder why they want to remain a member of an union they publicly attack in such abusive terms? Very strange?

Now the chief miserablists are attacking the union because they disagreed with the Chair of the Conference for not calling a "Card vote" on a motion. Which is different.  I admit that I was not there today but everyone I have contacted about the vote say that the decision by Conference (although close) was clear and a card vote should not have taken place. So I assume it is sour grapes as per usual by the miserablists.

One further point. I note that some of the miserablists, while complaining that they did not win the day, said never mind there was plenty of time to rubbish the new scheme to members before there is a new ballot? 

Hmmm? Do these people actually realise how important pensions are to ordinary working people? I may be wrong but I think that it is probable that the LGPS 2014 will be accepted. Now I think that would be a good decision and it the right of others to disagree. But what these others should be conscious of is that we have already the worse uptake of membership in the LGPS of any of the public sector schemes. Now, you might think that the scheme could be better but if you start rubbishing it and you get one member not join or leave the scheme as a consequence and die in absolute poverty then shame on you.

With pension auto-enrolling later this year and next we have an once in a life time opportunity to organise, recruit and persuade members to join a decent pension scheme. No matter what your views are of LGPS 2014 - don't attack it as a "bad" or "rubbish" scheme.  You think it could be better, which is an entirely different issue. Once this ballot is over (one way or another) we will all have a job of work to do to get our members to remain and join the scheme.

(picture above of some of those who should be deciding the future of the scheme by a secret ballot).

update: Check out UNISONactive take on yesterday

AMNT open meeting to members next Tuesday June 20

Association of Member Nominated Trustees. There is an open meeting of the AMNT next Tuesday 20 June at AXA Investment Managers’ London offices, 7 Newgate Street. London. Starting 1.30pm (sandwich lunch beforehand) and finishes 5.30pm (followed by drink and nibbles).

AMNT member and chief executive of Fair Pensions Catherine Howarth will give a presentation into the ‘Shareholder Spring’ and what it means for trustees.

Jonathan Bull of OPDU will also give a talk on the types of insurance available to trustees and what MNTs can to do to limit their own personal risk.

Followed by a report from the AMNT committee and breakout sessions on member concerns.

I have drafted a paper for the AMNT on "what to do if your employer wants to close your Defined Benefit Scheme". Which may be discussed either this meeting or the next. I'm at the UNISON conference next Tuesday so can't make it.

Find out more about the AMNT and join here. Email mail@amnt.org to apply if you want to attend.

"New local government pensions proposals released"

UNISON press release here "The Local Government Association (LGA) and trade unions have today announced the outcome of their negotiations on new LGPS proposals (for England and Wales) to take effect from 1st April 2014.

These proposals will now be communicated to scheme members, employers, funds and other scheme interests. Unions will consult their members over these proposals and the LGA will consult employers. The government has confirmed that a favourable outcome of our consultations will enable them to move directly to a statutory consultation later in the Autumn to implement these proposals.

The main provisions of the proposed LGPS 2014 are:

1 A Career Average Revalued Earnings (CARE) scheme using CPI as the revaluation factor (the current scheme is a final salary scheme).

2 The accrual rate would be 1/49th (the current scheme is 1/60th).

3 There would be no normal scheme pension age, instead each member’s Normal Pension Age (NPA) would be their State Pension Age (the current scheme has an NPA of 65).

4 Average member contributions to the scheme would be 6.5% (same as the current scheme) with the rate determined on actual pay (the current scheme determines part-time contribution rates on full time equivalent pay). While there would be no change to average member contributions, the lowest paid would pay the same or less and the highest paid would pay higher contributions on a more progressive scale after tax relief.

5 Members who have already or are considering opting out of the scheme could instead elect to pay half contributions for half the pension, while still retaining the full value of other benefits. This is known as the 50/50 option (the current scheme has no such flexible option).

6 For current scheme members, benefits for service prior to 1st April are protected, including remaining ‘Rule of 85’ protection. Protected past service continues to be based on final salary and current NPA.

7 Where scheme members are outsourced they will be able to stay in the scheme on first and subsequent transfers (currently this is a choice for the new employer).

All other terms remain as in the current scheme. Future scheme costs will be monitored and controlled to ensure stability and affordability of the LGPS. Further details on cost management and scheme governance will be released once the ongoing discussions in the next part of the LGPS 2014 project are complete.

Heather Wakefield, UNISON National Secretary Local Government, Police and Justice Section said:

“The negotiations over LGPS 2014 have been long and tough and have taken place in a demanding political and economic climate. The process has shown that UNISON, the LGA and the other local government unions can work productively together in the best interests of LGPS members and potential members.

LGPS 2014 is a sustainable, defined benefit scheme, which is designed to protect existing members and be affordable for the low paid and part-time workers who are its majority. Under exacting circumstances, we have achieved the best possible outcome.”

ENDS

(I'll post futher once I have read the details but it is looking like a very good deal)

Update: further information from the LGA here

Pensions - What Next for Pensions in the Voluntary Sector and Housing Associations?

After the opening session of the 2012 UNISON Community Seminar we split into 4 workshops :- Facility time; Health and Safety; Challenging Racism in the Workplace (based on a new branch toolkit) and Pensions. I went to the Pensions workshop and helped out UNISON Pension guru Glyn Jenkins (left) as a SGE member.

The workshop was (understandably) dominated by the future of the Local Government Pension and the NHS pension scheme. Glyn brought the workshop up to date on the proposed changes. Even though negotiations are still ongoing so he was not yet able to give definitive answers to all questions. I collated a survey filled out by members of the workshop. Out of 26 people present, the average age was 45 (3 years younger than the average UNISON member), the average amount of pensionable service was only 15 years, the age they expected to retire was  63 and 4 had no pension whatsoever. One person put down he wanted to retire at 23! Most had been promoted in their first 10 years of service and did not expect to be promoted during the rest of their career. Interestingly Glyn thought on the basis of this survey that most of us would benefit from a CARE (career average pension scheme).

It was a pity that there was not more time to discuss the Social Housing Pension Scheme, auto-enrolling or other urgent pension issues specific to our sector.

UPDATE: Someone has emailed me to ask what happened over the "template" emergency conference motions over the Pension dispute attacking the Service Group Executive (SGE)? They were ruled out of order (they were basically identical and clearly inaccurate) by the elected lay Standing Orders Committee (SOC).  The SOC offered a 30 minute open discussion on the issue. The SOC reported was passed overwhelmingly but delegates voted to reject the offer to have the "discussion" and to support the decision made by their Service Group Executive (I declare an interest).

How to pitch to the Local Government Pension scheme

Last week I was in "Citywire" magazine (see website here) on how pension fund managers and other financial service providers should "pitch" for business to Local Government Pension Scheme (LGPS) committee members. The interview had been arranged by the Association of Member Nominated Trustees (AMNT).  I'm a member of their Executive Committee.

I have endured a number of pension "pitches" and so called "beauty parades" over the years. Some are very good but often they are pretty awful. There are some fund managers who may be good at their jobs but should not be allowed to appear in front of well rounded human beings. They forget that their role is not to dazzle us with their brilliance but to persuade us to buy their services.

I have a general rule in life. If I don't understand something I won't buy it. You can also guess what I will do if I don't like the person trying to sell it. I also want to buy a decent house view on investment principles and not a "star performer" not matter how brightly he or she is burning at the time.

The lack of preparation and research is also striking. If they don't even bother to read and understand our scheme Statement of Investment Principles (SIP) before the pitch then I really wonder why they have turned up and wasted their time and mine? 

When you explain that Pension funds should be long term investors who believe that investments in well managed companies who have good governance practises will tend to produce superior returns you can can see the horror, the horror of the ill prepared and the complacent. Sometimes even the wannabee Masters of the Universe truly have no clothes.  

In defence of DB

This is an article I wrote on behalf of the AMNT in defence of Defined Benefit Pension schemes for all.  It was published in Engaged Investor in its December edition.

"While the Association of Member Nominated Trustees (AMNT) has no formal view on the dispute between the Government and the public service unions, many of our
trustees are strong supporters of defined benefit (DB) schemes. 

In fact, one of the most active AMNT working groups is dedicated to defending and promoting DB schemes and almost exclusively comprises private sector DB trustees. This group is convinced that DB should remain the cornerstone of occupational pension provision.

DB trustees are also concerned that the often inaccurate media attacks on public sector DB schemes are having an adverse impact on the standing of their schemes with their sponsors.

It is often forgotten that alongside the six million workers in the public schemes there are still 2.4 million continuing to build up DB benefits in private schemes. It is important that
the pension myths about all DB schemes are exposed and countered.

The first myth is that DB is “gold plated”. The average local government pension is only £4,000 per year while the average retired female NHS worker’s pension is less than £2,800 per year. The maximum that many retiring today will get in typical DB schemes is half pay and a lump sum typically 1.5 times their final salary. Are people really saying half pay after a lifetime of saving is too much?

Another myth is that DB is too expensive. Future employer contributions for many schemes are less than 14% and with some, such as the NHS’s scheme, it has already been agreed that employer contributions are capped at 14% and any future increase in cost will have to be wholly met by the employees.

In the absence of compulsion, unless we have pension schemes which are attractive to employees then people will simply not join or opt out. This will leave the taxpayer with an even greater bill to support these people on the poverty line when they are old.

Nobody is arguing that DB schemes are perfect, or that hugely damaging mistakes were not made in the past. Deficits for past accrual are often confused with future costs of DB, however. Most DB trustees remain convinced that people want a degree of certainty in their retirement. They want to share the investment risk with the employer and the state, not to personally bear the brunt of it.

There are many changes that could be made to improve DB. These could include merging DB funds and schemes; bringing together the 100 or so different local government pension schemes.  We need changes in the accounting standards that currently treat century-long pension benefit liabilities as if they were a credit card bill. We need to get a grip on spiralling fees. We need to improve governance and make sure that savers are not ripped off in future financial scandals.

The real scandal in pensions is not DB schemes but the two thirds of private sector employers who do not pay a penny towards their employees’ pension and the 50% of private sector workers who have no pension provision whatsoever".