'Protecting Our Best Interests: Rediscovering Fiduciary Obligation'

On Wednesday evening I went to the launch of the latest report by "Fair Pensions" the respected campaigning organisation for "responsible investment". 

"New research by Fair Pensions calls for an ‘enlightened fiduciary' model for institutional investors to parallel the new duties of company directors introduced in 2006. The report argues that such a provision would provide a valuable ‘nudge' towards sustainable, long term investment to overcome narrow interpretations of fiduciary obligation which emphasise profit maximisation at the exclusion of all other factors, including financial system stability".

Lib Dem Government Minister for "Employment Relations, Consumer and Postal Affairs" Ed Davey gave a positive but guarded welcome to the report. 

Hermes fund manager, David Pitt-Watson was also one of the speakers and gave his usual demolition job (how going dutch can double the value of the average Brit personal pension) on most private pension schemes.

He also pointed out that pension "trustees" came about historically to prevent pensioners from being ripped off and still perform this role.  I made a comment about this and the anomaly that if trustees are seen as a "good thing", why are there huge penison funds run by insurance and investment companies where there is no such representation to look after the interests of beneficiaries?

Another 2010 Christmas Carol

Carol is a single mum with three small children who works in the kitchen of the Executive dining room of a British FT100 listed company in East London. She earns £13,000 per year for an average 40 hour week (the national minimum wage of £5.93 per hour is £12,334). She prepares food and cleans the dishes of people who earn up to 100 times what she is paid. She does not work directly for the company but is employed by a subcontractor on rolling 3 month temporary contracts.

Since her wages are so low she receives working tax credits from the government to supplement her income. She also has housing benefit to help her pay the rent and Council tax benefit at her two bed Council flat. Her children receive free school meals. All of this desperately needed support is paid for by the British taxpayer.

She of course does not receive any company pension or any sick pay. Despite the state benefits Carol and her children live hand-to-mouth and she has to rely on moneylenders to pay for emergencies as well as her children’s birthday and Christmas presents.

It is already pretty well known that the marginal rate of tax for the very low paid is far less than the extremely well paid executives that Carol serves and cleans up after.

But what is less well known that both the company who employs her and the FT100 Company she works at also outsources its revenue and profits abroad and pays the British Government relatively little in taxes.

Therefore the financial supplement to Carol’s meagre wages is being paid for by British taxpayers yet both companies who benefit from paying her poverty wages are avoiding paying taxes to the British government. Double bubble exploitation?

Why should British taxpayers subsidise miserable pay and conditions while at the very same time letting these same Scrooge employers avoid paying their fair share of British taxes. Surely this is not right?

Remember before feeling too outraged and smug that you probably have pension and insurance funds that invest in both these companies and make money out of them. Your future pension could be financed by other people’s personal misery.

Hat tip Fair Pensions. Watch out for their next campaign on a Living Wage for all top FT100 employees and their contractors. 

Check above Picture and the other Christmas Carol

Capital Stewardship: UNISON London Pension Network

Next Tuesday lunchtime is the latest UNISON Capital Stewardship: London Pension network meeting. 

This is a meeting for  Greater London UNISON Pension trustees or member nominated representatives on the London Local Government Pension Schemes.

All such trustees and reps welcome!

We meet up 3 or 4 times a year to discuss issues and support each
other on what is often a very demanding, responsible and "head hurting" role.

Our Guest speaker this time will be from Fair Pensions who will be presenting on their new campaign “Tackling exploitative Pay and working conditions in the  Supply chain of the UK Largest Companies”.  Which I think will be more than interesting and relevant to trade union pension activists. 

I am just a little bit behind posting on Pension issues.  I have got reports on the latest LAPFF meeting, my last London Borough Tower Hamlets Pension scheme panel (and committee) as well as last week's really excellent annual TUC Pension Trustee event.  I must catch up.