This blog is about how I am reorganizing the money I’ve invested for my retirement. It shows that if you dig a bit, you can find ways to get what you want. But you have to know what you want first! I want a fossil free energy future and this is what I can do right now.
A bit of background about me.
I turned 60 last week and have made some later life resolutions. One of those resolutions is to convert my pension pot(s) into something that works for me and the planet. Because I have been saving since my early 20s and been working in highly paid jobs, I have saved around £650,000.
I get a pension from Zurich for my time there and I will get a full state pension so long as I work three more years (consulting my state pension forecast). So my DC pension pot is tasked with helping me pay off my mortgage (interest only) and replacing my current wages when I stop working (I pay myself a small stipend from AgeWage).
What can I do for myself?
I started my due diligence by looking at what others do. One company that has gone further than others to make a positive impact on climate change is the software company Atos, they – like me – saw their pension fund as an agent for change and I spoke with one of their Trustee’s – Tegs Harding, who had been speaking about a fund I was interested in
We are excited for the opportunity to be one of the first investors in the fund. This represents an important step in our ambition to move towards a net zero target by 2035, which is fully aligned with the sponsor’s own net zero ambition. As trustee it is our job to manage the material financial risks in the scheme and there is no doubt that climate change will have a material impact on the portfolio if don’t make changes today.
Moving the schemes equities to this fund results in a material reduction in the carbon impact of the schemes holdings on day one but importantly also has a focus on engagement activity which will continue to drive improvements in the way in which companies operate in the future.”
Atos are – as far as I can see the main investor in the LGIM Fossil Fuel Investment Fund, but at the other investor mentioned by LGIM when launching it , is Pension Bee. Here’s Pension Bee’s Clare Reilly
“We are proud that the voices, determination and commitments of our customers have led to the launch of this new fund. If we are truly to engage people with their pensions we need to listen to their voices and offer them investment products that reflect their needs and sentiments. We are pleased to partner today with LGIM to have made that happen with fossil fuel free investing.”
Having spoken with Tegs Harding – she sent me the Atos story of how they have aligned their pension scheme investments to what their company was doing. It’s written as a case study and is an interesting read which you can follow using this link.
The Atos case study ends with four top tips which made sense to me. There is no way I am going to be able to find the perfect fund because I don’t have the perfect data, but as the sponsor of my retirement , I know exactly what is my appetite for reducing carbon risks, it is full on. I don’t need a working group, I needed to talk to Tegs and now I needed to talk to Claire. I don’t just need the right fund, I need the right platform, this fund is going to have to help me retire and I need an L&G or Pension Bee to make my retirement happen as I want it to. Here are Atos’ top tips, thanks Tegs!
Next stop was Pension Bee. I had followed the debate in 2019 and 2020 among Pension Bee savers who’d been using LGIM’s Future World. They’d found out that their “green fund” was investing in fossil fuels and freaked out, writing Clare and Romi emails on a daily basis demanding a fossil fuel free version.
Speaking with Clare, I discovered that I could access this fund and using Pension Bee’s charges calculator, I found I could have it at a relatively low price
To LGIM’s credit, they have switched some of my Future World into this Fossil Fuel fund on their platform.
So I am now wondering whether to have my money on Pension Bee or Legal & General’s platform. Ironically , the platform fee is slightly cheaper with Pension Bee. However, if I have to buy and sell units in these two funds, any financial benefit will be lost. So I’m requesting that my units can be transferred to Pension Bee for without a cash transfer needing to be made.
Summing things up
I like Pension Bee and Legal & General a lot, they work together and I’ll remain in L&G funds if I move to the Pension Bee platform. My decisions are about balancing the value of the Pension Bee platform with the money it would cost me to move my money across. If I really do get a free switch – which would mean a transfer of units “in specie” then it’s easy to move. But if I have to pay to sell and then re-buy units, I will probably stay with L&G. There may be reasons the units cannot be simply registered but I suspect this will be a business decision and will come down to issues such as “treating customers fairly”.
The great thing is that I have been able to do so much research on the fund myself, been able to talk to great people like Tegs and Claire and the people on the IGC at L&G. People really want to help and if you are a saver, I urge you to follow this blog and start asking questions for yourself.
You can make your money matter and it’s great that you can take informed decisions because of the guidance of others. We are not excluded from making our money matter, we can take decisions in an informed way, when we have access to the information we need.
A few missing fundamentals that might make a second blog
What rate of withdrawal is required and what rate is sustainable?
What inflation rate is assumed and is this to be based on one life or two? ( or more if next generation considered) Date of death assumed?
Thanks Henry, food for thought as how individuals can make a difference