Some of you might know that as well as serving as the Executive Leader of Tameside Council I am also the Chair of the Greater Manchester Pension Fund. I’ve written a little bit about pensions in this blog in the past, but as we come to the end of the year I want to take the chance to put a little more focus on what has been a truly momentous year in the world of local government pensions.
With 352,292 members and over £20 billion in assets the Greater Manchester Pension Fund is by far the largest local government pension fund in the country. Though as a fund with even higher ambitions, at the start of the year we reached an agreement to team up with fellow pension funds in Merseyside, Lancashire and West Yorkshire to create a £40 billion combined pension pool.
All well and good, you might say, but what does that actually mean? I’ve written a lot this year about some of the problems Tameside and Britain faces, the most relevant ones here being our productivity crisis and the fact that a small minority of businesses are still getting away with not meeting their obligations to their employees and society. Getting pension funds, in Greater Manchester and elsewhere, to combine their resources is the way we are starting to create our own solutions to these big national issues.
The way we’re going to do that is quite simple. £40 billion is a lot of money, and we can use that money to invest in projects that are good for the pension fund and good for our society and economy as well. Pension funds are uniquely placed to make this happen. We’re embedded in our local communities, we have the sheer financial muscle needed and we’re an investor for the long term. Governments and private companies will often not touch an investment that will only start providing a return years or decades from now, but that project is perfect for a pension fund which needs to find ways to pay out to members years and decades from now. We’re already doing this to a certain extent, but the plans that we have started to put in place this year will allow us to do this quicker, better and on a larger scale.
Investing in infrastructure is not the only thing we can do, we can also invest in businesses as well. That gives us the opportunity to influence their board of directors and management by exercising our rights as shareholders. If we think a company executive is being paid too much for the job they are doing, we can do something about it. If we’re unhappy with a business using zero-hour contracts and tax havens, we can do something about it. This is something that is already happening. To give just one example, companies that had to backtrack over pay increases for executives due to shareholder opposition in the last year alone include betting company Paddy Power, online gambling firm PlayTech and the Foxtons estate agency. Next year we’ll be working together on ways to make sure that the voices of pension funds are heard further in all the places in which we hold assets.
There’s no doubt in my mind that 2016 will go down as a milestone year in pensions. If you’re a member of the Greater Manchester Pension Fund, rest assured that your retirement is safe in our hands. If you’re a resident of Tameside, rest assured that we all supporting investment that will make the borough is better place to live, work and do business in. If you’re concerned with how some businesses run things, rest assured that those concerns are shared by us as well. Roll on 2017, and the next step.