20th January 2015 by Catherine Howarth
I doubt very much whether the conversation in your house over Christmas turned to how much you’d really like to have more information about your pension savings.
Likewise, on Christmas morning, I doubt very much whether the one thing you’d have liked from Santa would be a few more boring pension statements, in addition to the ones you barely read already, if at all.
Hear me out.
Because I think I can convince you that by next Christmas, “better pension transparency” might be something you consider adding to your list. In fact I hope you won’t be able to listen to Mariah Carey’s “All I want for Christmas is You” without adding the words “and better transparency”, in your head.
It all starts with what’s important to you. The issues you can be relied on to bang on about in the pub, or over Christmas board games, the “don’t get her started” ones. Since you’re reading Mindful Money, the chances are that you’re a thoughtful, intentional type, so perhaps you care about climate change. Perhaps you make certain dietary choices, or prefer to shop locally. Perhaps you’ve even got a canvas bag with an ironic slogan on it. One you like to take to the supermarket to avoid using the plastic ones they have there.
And yet, your pension is heavily invested in fossil fuel companies.
There’s a famous scene in the show Portlandia where the couple can’t eat chicken in a restaurant without knowing the name of the chicken, where it was farmed, and actually going off to meet with the farmer. I find it amusing to watch, but the show also makes an incisive point, because people tend to be increasingly obsessive over their treasured causes in certain settings, these days, but when it comes to saving for their retirement, there’s still a major disconnect for many of us.
This strikes me as a sign that our society may be missing a vital opportunity. And it’s where ShareAction is building a growing movement of engaged pension savers, who are calling for a better connection between their money and their values.
Perhaps the promotion of Human Rights is important to you, and you buy Fair Trade whenever you can, giving money to a Human Rights campaigning organisation, boycotting brands that are engaged in dubious practices in emerging markets. And yet your pension money is heavily invested in companies that use sweatshops, supporting the very companies you’ve chosen to boycott on the high street.
This is exactly why “better pension transparency” should be on next year’s Christmas list, because right now, your pension provider isn’t even legally obliged to tell you where your money is invested. And transparency is a major key to unlocking these issues.
Help may be at hand because last week the Government committed to consult on giving savers greater rights to know where their money is invested and how the people looking after it are using it. In a debate in the House of Lords last week, supported by ShareAction, Lord German put forward an amendment to the Pension Schemes Bill that would give savers rights to ask those looking after their money for more information about where that money is invested and how they are engaging with companies.
Members of the House of Lords from the Liberal Democrats, Labour and the Conservatives who spoke in favour of the rights last week that increased transparency is a good thing.
It’s a bit like the Freedom of Information Act, which has since been decried by some of the very politicians who passed it, and yet, was responsible for unearthing the MPs’ expenses scandal.
Even if many savers never ask a question of their pension scheme, the fact that questions can be asked means they are open to scrutiny. Even if they ask a question and the scheme managers say they don’t think it is an important issue, the issue has been brought to their attention and a dialogue has been started. Even if only a minority of people ever ask questions, there is potential for the system to be scrutinised. It’s like our democracy – most people never question their MP, but most agree it is a good thing that MPs can be questioned and held to account.
The alternative is a continuation of the status quo – your money being invested and managed in ways you never know about. You can keep doing all the other things you think are important – keep recycling and buying Fair Trade – and the investment system can carry on undisturbed.