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Pension megafunds
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
Labour’s pension reform may be packaged as a smart economic framework unlocking “idle” funds to support local initiatives, but let’s cut through the spin, this is state directed investment by stealth.. There are no safety nets, no government liability, and no consequences if these investments underperform, it’s savers not the government who pay the price..
Steering private pensions to fund government priorities pushes us towards economic dirigisme. It’s not quite communism, but it wont be a free market either.
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By (user no longer on site) 49 weeks ago
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It’s what happens when governments run out of income to tax.
Next stop bank accounts, farms, land, pension funds.
I’m not quite sure what happens when all of that runs out as well. |
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The EU has been talking about making use of funds held in pensions and savings too for a while. They see it as money that can spent on things they want now even though it's being paid for and by private individuals to try and make their old age better. |
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"The EU has been talking about making use of funds held in pensions and savings too for a while. They see it as money that can spent on things they want now even though it's being paid for and by private individuals to try and make their old age better."
In modern socialist thinking, investment in the market is wasted because it's only for the purpose of making money. It would be better for the investor to put their money into socially acceptable projects, which would make money whilst also benefiting society.
What they fail to see is that investment in the market makes more money available to business, and grows the economy, providing the rising tide that lifts all boats. Greedy capitalists investing money for their own gain, create market growth which makes everyone better off.
They also forget that their proposed investment in social projects won't be paying the same level of return. So less economic growth, so less societal benefit. |
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I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk.. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk.."
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK. "
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice  |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK. "
Thanks, so in general such things if they are well run etc are good?
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice "
HS 2 ? |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?"
I don’t think so but I believe they do own HS1 - the link to the Channel Tunnel. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?
I don’t think so but I believe they do own HS1 - the link to the Channel Tunnel."
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?"
That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions."
They've specified as part of their proposals that they will only invest in businesses that will give a lower return?
That doesn't make sense.. |
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By (user no longer on site) 49 weeks ago
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions.
They've specified as part of their proposals that they will only invest in businesses that will give a lower return?
That doesn't make sense.."
Socially approved investing (according to Labour) is investing in companies “that measure and report their impact on wider society, but also hold themselves accountable for delivering and increasing positive impact”
Look at any modern business’ mission statement - it might as well not rule anyone out. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?
I don’t think so but I believe they do own HS1 - the link to the Channel Tunnel.
"
HS1 is interesting from an investment perspective - UK pension funds were unable to invest because (a) they basically weren’t big enough and (b) they weren’t allowed to.
The main reasons they weren’t allowed to was because Gordon Browns second decision as Chancellor (after giving the Bank of England independence) was to remove the tax dividend credit on UK companies which made it harder for UK pensions to justify owning UK companies - which was the opposite of the aim. The other big issue is that regulatory changes mean that UK pensions are required to match investments with long term liabilities (liability driven investment) - that sounds really sensible but in reality it has meant that pensions can’t invest in ultra long term illiquid infrastructure. Which is exactly what the country needs.
For a fun side note: LDI was basically the reason why the pension funds had to sell heavily when Liz Truss put forward her budget.
If these mega funds change these rules (and have independent investment leadership) then I think they could be good. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions.
They've specified as part of their proposals that they will only invest in businesses that will give a lower return?
That doesn't make sense..
Socially approved investing (according to Labour) is investing in companies “that measure and report their impact on wider society, but also hold themselves accountable for delivering and increasing positive impact”
Look at any modern business’ mission statement - it might as well not rule anyone out. "
So it could be a positive thing socially and financially?
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?
I don’t think so but I believe they do own HS1 - the link to the Channel Tunnel.
HS1 is interesting from an investment perspective - UK pension funds were unable to invest because (a) they basically weren’t big enough and (b) they weren’t allowed to.
The main reasons they weren’t allowed to was because Gordon Browns second decision as Chancellor (after giving the Bank of England independence) was to remove the tax dividend credit on UK companies which made it harder for UK pensions to justify owning UK companies - which was the opposite of the aim. The other big issue is that regulatory changes mean that UK pensions are required to match investments with long term liabilities (liability driven investment) - that sounds really sensible but in reality it has meant that pensions can’t invest in ultra long term illiquid infrastructure. Which is exactly what the country needs.
For a fun side note: LDI was basically the reason why the pension funds had to sell heavily when Liz Truss put forward her budget.
If these mega funds change these rules (and have independent investment leadership) then I think they could be good."
Therein I think will be the answer.. |
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By (user no longer on site) 49 weeks ago
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions.
They've specified as part of their proposals that they will only invest in businesses that will give a lower return?
That doesn't make sense..
Socially approved investing (according to Labour) is investing in companies “that measure and report their impact on wider society, but also hold themselves accountable for delivering and increasing positive impact”
Look at any modern business’ mission statement - it might as well not rule anyone out.
So it could be a positive thing socially and financially?
"
I see no reason why not. Like all investments, they carry risk. |
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By (user no longer on site) 49 weeks ago
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?"
HS2 was essential infrastructure which the Tories blundered massively. I hope (with very low expectation) that Labour reinstate the full plan, if not a sizeable chunk of it. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions.
They've specified as part of their proposals that they will only invest in businesses that will give a lower return?
That doesn't make sense..
Socially approved investing (according to Labour) is investing in companies “that measure and report their impact on wider society, but also hold themselves accountable for delivering and increasing positive impact”
Look at any modern business’ mission statement - it might as well not rule anyone out.
So it could be a positive thing socially and financially?
I see no reason why not. Like all investments, they carry risk. "
Makes one wonder why such an announcement has attracted such negativity on here by some.. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?
HS2 was essential infrastructure which the Tories blundered massively. I hope (with very low expectation) that Labour reinstate the full plan, if not a sizeable chunk of it. "
To be fair all governments get major infrastructure projects wrong in relation to costs etc..
Labour did with regionalised fire controls which cost hundreds of millions and never used..
Whether that's down to how we do things as a country with red tape I don't know but when we look at some of the Scandinavian countries they are often on time on budget and in the time we take in planning etc they're cracking on with it..
The proposed new tunnel under the Thames is a prime example of a planning system badly in need of modernisation.. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?
HS2 was essential infrastructure which the Tories blundered massively. I hope (with very low expectation) that Labour reinstate the full plan, if not a sizeable chunk of it.
To be fair all governments get major infrastructure projects wrong in relation to costs etc..
Labour did with regionalised fire controls which cost hundreds of millions and never used..
Whether that's down to how we do things as a country with red tape I don't know but when we look at some of the Scandinavian countries they are often on time on budget and in the time we take in planning etc they're cracking on with it..
The proposed new tunnel under the Thames is a prime example of a planning system badly in need of modernisation.."
How Big Things Get Done by Bent Flyvbjerg is an interesting book on why mega projects have such high failure rates. |
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"I'm not an economic twonk like some but a very quick search shows that both the Australian and the Canadian mega pension funds are doing rather well..
Is that bad?
As I said I'm not an economic twonk..
The Ontario Teachers Fund has generally had good returns but it is reasonably free to choice its own investments. Plus it invests quite aggressively. Something like Calpers in California is also of a similar size but that historically has struggled (relatively) because it has to deal with lot more politically directed investment requirements. We will probably end up with a Calpers type environment if it is mandated to invest in the UK.
The irony is that the Ontario fund invests quite heavily in UK infrastructure of their own choice
HS 2 ?
HS2 was essential infrastructure which the Tories blundered massively. I hope (with very low expectation) that Labour reinstate the full plan, if not a sizeable chunk of it.
To be fair all governments get major infrastructure projects wrong in relation to costs etc..
Labour did with regionalised fire controls which cost hundreds of millions and never used..
Whether that's down to how we do things as a country with red tape I don't know but when we look at some of the Scandinavian countries they are often on time on budget and in the time we take in planning etc they're cracking on with it..
The proposed new tunnel under the Thames is a prime example of a planning system badly in need of modernisation..
How Big Things Get Done by Bent Flyvbjerg is an interesting book on why mega projects have such high failure rates."
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
Let’s not get carried away with the pension ‘megafund’ plan.
This is about redirecting private retirement savings to fund government priorities through local initiatives.
There is no risk to the government, no liability if it fails, however the general public carries all the exposure through their pension pots.
Will it work, in my opinion no, there will be a downturn in pension returns but the way they are splitting the % it will be difficult to unpick.
It is essentially a way for the government to finance its plans using money it doesn’t have. |
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003? "
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures. |
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By (user no longer on site) 49 weeks ago
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"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures. "
What exactly do you think existing pension schemes do with your money? |
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures.
What exactly do you think existing pension schemes do with your money?"
They invest in regulated markets, managed by professionals with experience in risk management and longterm returns.
What is happening here isn’t a run of the mill investment strategy, it is a political directive. Redirecting pensions into government backed initiatives, which are more often delivered by underperforming or unstable organisations, introduces too much risk. Especially when there’s no accountability if it fails because the government carries no risk nor do the suppliers. It is like asking people to hand over their savings to back a building project run by the same crew that can’t deliver HS2, who would do that..... |
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By (user no longer on site) 49 weeks ago
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"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures.
What exactly do you think existing pension schemes do with your money?
They invest in regulated markets, managed by professionals with experience in risk management and longterm returns."
“Your bookie is bad, mine is good”  |
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures.
What exactly do you think existing pension schemes do with your money?
They invest in regulated markets, managed by professionals with experience in risk management and longterm returns.
“Your bookie is bad, mine is good” "
Like I said, I care about peoples savings, it is money they have worked for and they have the sense to invest for their future. I don't expect you to see this point of view, but I do expect you to understand the relevance of what is being proposed and the risks that it carries. |
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By (user no longer on site) 49 weeks ago
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"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures.
What exactly do you think existing pension schemes do with your money?
They invest in regulated markets, managed by professionals with experience in risk management and longterm returns.
“Your bookie is bad, mine is good”
Like I said, I care about peoples savings, it is money they have worked for and they have the sense to invest for their future. I don't expect you to see this point of view, but I do expect you to understand the relevance of what is being proposed and the risks that it carries. "
I’d argue it carries no more or less risk than present pension investment schemes. Possibly less given the scale of the megafunds - investment in larger industry is probably more stable than smaller businesses, particularly long-term. |
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"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures. "
I am not on the left either but it is clear that UK pension funds are too small and fragmented to invest in the largest projects this country needs. Long time scale infrastructure work is the back bone of every major economy (think about the creation of the canals and railways in the 18th century here) and the modern tools for that are large scale pension funds. It is telling that our infrastructure is increasingly owned by retirees in Canada and other countries but not by British people.
Personally I would be happy to have a pension that invests in long term infrastructure because I can invest in the other stuff myself. It gives me an economic exposure I do not otherwise have access to. I appreciate other people will have different risk tolerances. |
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By (user no longer on site) 49 weeks ago
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"
I care about peoples savings, it is money they have worked for and they have the sense to invest for their future. I don't expect you to see this point of view, "
I do love your sly little digs, posted from a position of ignorance, always.
My pension is doing very nicely, thanks. Final salary |
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
"
It is essentially a way for the government to finance its plans using money it doesn’t have.
You mean like they have since (at least) 2003?
You do realise these are people’s private savings, right? This isn’t government borrowing, it’s redirecting money individuals set aside for their own future.
I’m not on the left, so I actually believe in protecting what people earn and invest for their futures.
I am not on the left either but it is clear that UK pension funds are too small and fragmented to invest in the largest projects this country needs. Long time scale infrastructure work is the back bone of every major economy (think about the creation of the canals and railways in the 18th century here) and the modern tools for that are large scale pension funds. It is telling that our infrastructure is increasingly owned by retirees in Canada and other countries but not by British people.
Personally I would be happy to have a pension that invests in long term infrastructure because I can invest in the other stuff myself. It gives me an economic exposure I do not otherwise have access to. I appreciate other people will have different risk tolerances."
This isn’t about offering people the option to invest in infrastructure it’s about government mandating pension schemes to fund its priorities, regardless of individual consent or risk appetite.
Infrastructure investment can be valuable when it’s chosen on merit, not "politically guided" Jeez, Miliband and Rayner must be wetting themselves in anticipation.
Which leads me to my concern, which is this opens the door to politicised allocation, zero government accountability, and no safeguards for savers if it goes wrong. Net zero. |
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
"
I care about peoples savings, it is money they have worked for and they have the sense to invest for their future. I don't expect you to see this point of view,
I do love your sly little digs, posted from a position of ignorance, always.
My pension is doing very nicely, thanks. Final salary "
Hold on.. you cut my comment to take offence and be offensive..
I didn't mean malice by what I wrote, I was expressing we have different political leanings. |
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By (user no longer on site) 49 weeks ago
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"
I care about peoples savings, it is money they have worked for and they have the sense to invest for their future. I don't expect you to see this point of view,
I do love your sly little digs, posted from a position of ignorance, always.
My pension is doing very nicely, thanks. Final salary
Hold on.. you cut my comment to take offence and be offensive..
I didn't mean malice by what I wrote, I was expressing we have different political leanings."
You implied that people on the left won’t understand the value of saving. That’s either naive or a dig  |
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By *otMe66 OP Man 49 weeks ago
Terra Firma |
"
I care about peoples savings, it is money they have worked for and they have the sense to invest for their future. I don't expect you to see this point of view,
I do love your sly little digs, posted from a position of ignorance, always.
My pension is doing very nicely, thanks. Final salary
Hold on.. you cut my comment to take offence and be offensive..
I didn't mean malice by what I wrote, I was expressing we have different political leanings.
You implied that people on the left won’t understand the value of saving. That’s either naive or a dig "
You have my explanation and the original could have possibly been worded better if that is what you took from it.
It wasn’t that people on the left don’t value saving, it was how those savings are protected or used by the government, which as far as I can tell is correct as you seem for this enterprise. |
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"Labour’s pension reform may be packaged as a smart economic framework unlocking “idle” funds to support local initiatives, but let’s cut through the spin, this is state directed investment by stealth.. There are no safety nets, no government liability, and no consequences if these investments underperform, it’s savers not the government who pay the price..
Steering private pensions to fund government priorities pushes us towards economic dirigisme. It’s not quite communism, but it wont be a free market either.
"
Is this the government forcing pension companies to invest in places they want or will companies have the choice? More importantly will individuals have the choice to opt out of these investments and carry on as before? Only thing I read on this was ages ago about a Canadian pest fund that is heavily invested in Thames Water. It was note worthy at the time as Thames Water were in quite serious trouble. They did not mention if Canadians had the option of not taking part as far as I recall |
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"That's nothing wrong with a megafund, it's just a fund with a lot of assets.
But what Labour are proposing is a megafund which only invests in socially approved businesses. That will mean that it doesn't generate good returns, which means that people will end up with lower pensions."
"They've specified as part of their proposals that they will only invest in businesses that will give a lower return?
That doesn't make sense.."
It doesn't make sense for the investor, as they will end up with less money, and therefore a lower pension. It absolutely makes sense for the government, as they get other people's money to be invested in the things that the government wants to be done, this saving the government money. |
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"Labour’s pension reform may be packaged as a smart economic framework unlocking “idle” funds to support local initiatives, but let’s cut through the spin, this is state directed investment by stealth.. There are no safety nets, no government liability, and no consequences if these investments underperform, it’s savers not the government who pay the price..
Steering private pensions to fund government priorities pushes us towards economic dirigisme. It’s not quite communism, but it wont be a free market either.
"
It would be disastrous, the foreign investors are not going to be happy when they don't get a decent return on their investments and if the government has access to private pensions idle or not it will open the floodgates and finally finish the selling off of this country.
No one voted for that.
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By *otMe66 OP Man 49 weeks ago
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"Labour’s pension reform may be packaged as a smart economic framework unlocking “idle” funds to support local initiatives, but let’s cut through the spin, this is state directed investment by stealth.. There are no safety nets, no government liability, and no consequences if these investments underperform, it’s savers not the government who pay the price..
Steering private pensions to fund government priorities pushes us towards economic dirigisme. It’s not quite communism, but it wont be a free market either.
Is this the government forcing pension companies to invest in places they want or will companies have the choice? More importantly will individuals have the choice to opt out of these investments and carry on as before? Only thing I read on this was ages ago about a Canadian pest fund that is heavily invested in Thames Water. It was note worthy at the time as Thames Water were in quite serious trouble. They did not mention if Canadians had the option of not taking part as far as I recall"
For now the government’s megafund is being introduced via voluntary agreement with pension funds. Seventeen pension firms have agreed to invest at least 5% in UK based assets. 10% in unlisted growth areas such as roads, houses or startups, non of which are listed which makes it hard to value and is full of risk..
However, the government has built in a hard stop if pension firms are not compliant. If they feel progress is not being made by the end of the decade, they will have the legal right to demand compliance. So it’s not “forced” today, but it will be in less than 5 years.
Individual savers, won’t have a say. If you’re in a defined contribution scheme (which most are), the fund manager decides where your money goes. This will now change what kinds of assets fund managers are expected to "prioritise". Opting out isn’t on the table unless you leave the pension scheme or self invest.
The problem here is this, the government are using savers money to fund their projects, which we all know never deliver on time and never deliver the value they set out to achieve.
They don't need to do this, they can issue gilts to fund their projects and that keeps everything transparent and accountable, with pension funds investing if they want.
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