TORIES TAKE OVER £213BN PENSION POT
Local government workers fear retirement risk
MEMBERS of Britain’s biggest pension scheme fear Tory moneygrabbers will put their retirement income at risk.
The local government workers’ schemes have 5.4 million members and funds valued at £213billion.
Tories changed the rules three months ago to give Communities Secretary Sajid Javid unprecedented powers to decide how the money is invested.
The main responsibility of a pension fund is to ensure money is safe to benefit the elderly in retirement – yet critics say Mr Javid’s power to take over investment decisions puts that in danger.
“This is an appalling abuse of power,” said Shadow Communities Minister Kate Hollern.
Mr Javid wants the money to fund major building projects, like roads and airports, which would save the Government from paying for them.
But Shadow Communities Secretary Teresa Pearce said: “It is pension money, not government money to be invested on a whim.”
She said the Government has ignored concerns that in his eagerness for extra cash, Mr Javid might make risky investments. Ms Pearce said the powers may be illegal under EU law. Ministers admit they have not talked to the European Commission about them.
Now the issue will be decided by judicial review.
We reported last week how the Government has made £10billion from mineworkers’ pension funds.
In return for guaranteeing pensions, it has pocketed half of all surpluses since 1994. Now Labour says the Government has trousered enough and should give future profits to miners and widows.
Before the latest pension change there were 90 local government schemes across England and Wales administering their own funds. It made up the world’s fourth largest pension pot. These were pooled into six British Wealth Funds with predicted admin savings of £300million a year. Labour is not against government investment plans in principle, especially if money goes into more social housing. But Mr Javid’s control over millions of people’s pensions has caused uproar, with 98 per cent of respondents to an official consultation objecting, and 105,000 people signing a protest petition. The Tories tried to slip their scheme through Parliament without a debate – but Labour leader Jeremy Corbyn blocked that. It was eventually agreed by 9-4 by a committee of MPs. The Communities Department said: “Our reforms have removed constraints, providing more freedom for investments and delivering £300million savings. “We have made administering authorities more accountable and will only intervene in the rare case they fail to act responsibly.”
It is pension money, not government money to be invested on a whim TERESA PEARCE SHADOW COMMUNITIES SECRETARY