Who does my pension company invest in?

Marcon

itsthelittlethings said:

Marcon said:

itsthelittlethings said:

There are usually meetings that you can go along to.

What sort of/whose meetings are you suggesting? 

They’re kind of like shareholder meetings I think. For pension companies.

I wondered if that was what you had in mind - but scheme members can't normally attend them.

Pipthecat

leosayer said:

Establishing whether companies have involvement in 'controversial' activities is a minefield (pun intended). 

I feel bad about my Samsung TV now

squirrelpie

Your pensions will probably have some trustees elected by members, so you could put your name forward and stand for election, and if you win you will then be in a position to see and maybe influence investment decisions. The mandatory training you will have to undergo may make you more aware of the issues involved.

gm0

Pension scheme investment for DB schemes is regulated (to attempt to avoid them failing and dropping liabilities for private income promises back onto the state.  Hence the existence of the Penion Protection Fund (PPF) paid for by a levy on DB schemes but with a state underpin beyond that of sorts (ideally never to be called upon - that being the goal of the regulation on how DB schemes behave).

So an "old" dying scheme with a declining population of aging out pensioners will be pretty much invested in index linked gilts in the home currency.  Cashflow of incomes + Indexation. Covered off.  Short of sovereign default.  Investment decision making is over.  Assets declining (with pensioners) year by year.  Not much left at the end.  Many of these old relics end up inside large life companies via scheme buyout and closure of the original admin arrangement.  For long gone employers.

Investment for growth and thus fund or investment selection is the purview of younger schemes with active accrual still.  And even then - limited in scale.  They are not expected to take major risks to "improve income" at the risk to the sponsoring employer - that they are asked to double dip and make up the losses.  Long term liability matching including indexation.  Avoid that and balance growth of funds in the scheme with contributions from employer (or successor company taking on the liability) to meet the scheme need and rules whatever they may be.  In most cases this is (correctly) becoming less generous or stopping accrual entirely in the flight to DC where employer liabilities are "at the time of contribution only".  And opens up investment flexibility for the member.  Within the scheme.  Or via DC transfer out.

Ethical pick n mix doesn't even feature in the top 1000 priorities for DB or DC trustees.   Nor does customising for individual members.  

An occupational DC scheme by contrast will (by now) most likely offer one or more "ethical" / "ESG" funds along with an Islamic principles one - to meet member demand for "an option".  

But these are ethical light - full index less knockouts for tobacco/gambling/sex/miltary of some sort.  There are several such.  I use the FTSE4Good one.  Not because it is particularly ethical.  But it is global equities. Minus (some) of the stuff I don't wish to encourage.  And cheap.   Damage to my returns (if there is some - and there may be a little - is manageable for the choice made. 

But the list of knockouts may not include conglomerates that do more than one thing or are dual use.  And it changes over time. And how often should it be reviewed. By whom. And at what cost.  Passed on by the fund manager via charges to the DC scheme member or DB scheme.

As you stated this is deeply political anyway.  I would like ethical funds to have nuclear power IN. Not OUT for its zero carbon contribution in a mixed energy economy with interruptible renewables.  And oil/gas out. The zero carbon aspect matters more (to me) than the uranium cycle/nuclear dual use issue. That's not how most are stup presently. But the same issue would arise regularly with particular sub-sectors or stocks.  Leading individual investors to holding stocks not funds (a terrible plan for most of us). 

Or accepting that imperfect compromise is where we live.

Whether it would be sensible for me to switch more investment away from energy companies of now (for my own financial interest) is deeply questionable.  This is one of those money where your mouth is choices. 

The same "can't please everyone" logic applies to DB schemes investing in funds based on listed equities or private equity.  

Within regulation they have a duty to invest robustly and a diversified way (risk management) - to meet the DB promises.  They have no incentive to make this a democratic process or "popularity contest".  Not to veer away from readily available product to customise expensively.

If you wish to influence this more - then the governance - of fund management and ethical investing.  And the political incentives applied to that world.  Is your best approach.  It is of course many steps away from a particular stock investment at a point in time in a given fund held by a scheme.

Sarahspangles

picitup said:

I'm trying to find out and want to ensure their investments are ethical in my view.  This kind of touches on politics, but I don't want to discuss that and will not respond to any political questions as it's not allowed here (quite rightly)

so.......  I am 66 and retired and like many, have a few workplace pensions.   One is BT (British Telecom), Leicester County Council and the Pension Insurance Corporation who took over my pension from an old employer.

I've emailed each one and asked the question: "Do you invest in XXXXX?"

British Telecom have replied and after about a week, they said:

"We have no investment exposure to XXXXX"

Well, that was pretty clear.  LCC sent me a word document with a full page of A4 text, vaguely outlining their investment methodology which didn't answer my simple closed question.

I've pointed this out to them and am awaiting a reply.  I'm wondering if they do invest and don't want to say, or they think it's none of my business.  If push comes to shove, how can I get this information?  Maybe an FOI?  It's my money and I think I'll decide how/where it's invested

My intention is, if sensible, consolidate my pensions into a single provider (probably BT) that meets my ethical views.

I'll see what I can find out, hopefully with the help of others here.

Thanks for reading.......

Steve

LCC are an LGPS pension so they have a published investment strategy. Some of the meetings are held in public and I know when I worked for a local authority that occasionally officers would attend and lobby against particular investment types.