I’m not sure where the treasury slush fund accusation comes from?
Morning star being a rag, it’s borderline embarrassing at this point.
As you say, the idea that pension funds can somehow become treasury slush is nonsense. What they could very much become though is a very quick way to incease assets under management for the sovereign wealth fund.
On the actually change - if moving I to bugger funds allows for them to actually own companies etc, then I think this is a good idea.
Aren’t pension funds supposed to spread their risks?
But if they are forced to invest for economic growth instead of pension fund growth, then that’s bad.
That appears to be the concern, that it will be used to invest in what the government wants to invest in, as a substitute for the government investing directly as they should be doing.
The GMB expert also rubbished Treasury arguments that pooled assets can be used to invest into a wider range of riskier and long-term assets.
“We are not speculators — we are not going to put it on the 4:30 at Haydock,” he said.
He said Treasury plans to have each administering authority set targets for investment in their local economies was also wrong-headed.
“We invest to get a return, we don’t invest in the local economy for the sake of it,” said Mr Georgiou.
Aren’t pension funds supposed to spread their risks?
Individual funds are yes. But a larger fund can do so more effectively. As having a larger % of one company represents a smaller % of the funds total investment risk. IE the bigger the fund the more it can risk without endangering the whole plan.
As long as it is managed well. And that comes to your second point.
That boils down to there being no real difference. If the gov has control of multiple small funds. They can already make choices based on economy vs long term investment. And if long term comes second. Are failing the pensioners.
Having a bigger fund doesn’t change this. It just allows the investment to be controlled buy one voting fund, giving it more ability to control that company. Again, something that can be used to benefit the pensioners or the economy. Depending on the priorities of the government.
But basically if the gov has access to 3 funds or one big one with the same money. They are just as able to choose how that money is used. One fund just includes options for something closer to national ownership. So more control on how the company makes the same choices.
Shitty government choice is shitty government no matter how the money is devided. Its just one way is more effective no matter what choices they make good or bad.
I’m not sure where the treasury slush fund accusation comes from?
On the actually change - if moving I to bugger funds allows for them to actually own companies etc, then I think this is a good idea.
But if they are forced to invest for economic growth instead of pension fund growth, then that’s bad.
If the local funds are big enough to do proper investment, then this probably isn’t worth it anyway.
Morning star being a rag, it’s borderline embarrassing at this point.
As you say, the idea that pension funds can somehow become treasury slush is nonsense. What they could very much become though is a very quick way to incease assets under management for the sovereign wealth fund.
Aren’t pension funds supposed to spread their risks?
That appears to be the concern, that it will be used to invest in what the government wants to invest in, as a substitute for the government investing directly as they should be doing.
Individual funds are yes. But a larger fund can do so more effectively. As having a larger % of one company represents a smaller % of the funds total investment risk. IE the bigger the fund the more it can risk without endangering the whole plan.
As long as it is managed well. And that comes to your second point.
That boils down to there being no real difference. If the gov has control of multiple small funds. They can already make choices based on economy vs long term investment. And if long term comes second. Are failing the pensioners.
Having a bigger fund doesn’t change this. It just allows the investment to be controlled buy one voting fund, giving it more ability to control that company. Again, something that can be used to benefit the pensioners or the economy. Depending on the priorities of the government.
But basically if the gov has access to 3 funds or one big one with the same money. They are just as able to choose how that money is used. One fund just includes options for something closer to national ownership. So more control on how the company makes the same choices.
Shitty government choice is shitty government no matter how the money is devided. Its just one way is more effective no matter what choices they make good or bad.