For those of us who thought People’s Pension (now Partnership)  had no ambition with its £22bn of assets, there is this.

The commentary I have read so far suggests that People’s Pension is gunning for State Street – which manages the majority of its money

Putting the boot in?

The important thing to bear in mind on this is that this policy is new, just as CIO Dan Misulskis , Trustee Chair Mark Condron and Leanne Clements are new. Though People’s Pension is becoming a mature pension scheme , the investment and trustee team have arrived in the past two years and had no part in the decision making that appointed State Street when LGIM were kicked out. Back then , the appointment was seen as “fee based”, increasing the profitability of the “not for profit” People’s Partnership – or more likely – setting the trust on an even keel.

I am not going into the detail of the new RI policy (RI- Responsible Investment), but this exposition makes sense. Leanne Clement is a member of the Pension PlayPen group and I hope she will be able to make a coffee morning to explain the policy to us directly.

State Street should be nervous.  As Emma Simon points out in Corporate Adviser

So there is now some blue water between SSgA and People’s Partnership  and the Trustee has made it clear that if the conditions of the policy are not met, it will put the Investment Management Agreement under review with a view to terminating it.

The Denver Boot

Shape up or shape out

This is radical stuff and something that many of us did not expect to see from People’s Pension which for years has struggled to assert its identity as an asset owner.

It is potentially a watershed moment for Responsible Investment in this country, for it potentially put on notice other American managers – especially BlackRock but also Vanguard, who have lagged their European and British counterparts in “making our money matter”.

With the political winds blowing as they are in the United States, this will create a dilemma for American managers who are under pressure from the right-wing nationalism of Donald Trump’s republicans to put America first (and by inference the planet second).

If People’s action is as decisive as their Policy says it is, then the size and concentration of People’s exposure to State Street’s style of management , puts this dilemma front and center.

People’s Partnership puts its big boots on

People’s was born out of the Union based B&CE, an insurance company that helped the construction industry and its workers to insure and get holiday pay. It was an early adopter of stakeholder pensions and out of that came the People’s Pension Master trust which has become, in terms of assets and members, the largest private auto-enrolment other than the state owned Nest.

It is entirely appropriate that a trustee board that includes the redoubtable Jeannie Drake, should adopt this strident , people-orientated – policy. Those of us who see no conflict between doing good for the climate and improving member’s financial outcomes applaud this move and put our trust in those trustees to put the boot into “tea and cake”.

Boots and a Hard Hat