The story of how the MP’s DB pension is even less invested in UK growth stocks than the average private sector UK pension has been knocking around a few days and I’ve been trying to stay out of its way because there really are better “anomalies” in town. A couple of years ago no-one cared that as an open pension scheme you were being super-prudent by not investing your pension fund for growth, relying on your sponsor to cough up any shortfall. The Bank of England has always prided itself in having its fund invested in gilts. They are so prudent they cost the tax-payer a fortune but their bankers are worth it.
City Wire
City AM ran this story when Jeremy Hunt was Chancellor 18 months ago and the new Deputy Editor has been bringing it to my attention this week. I’ve coughed and said I really can’t help. Citywire – a retail paper has every right to be indignant when it’s Government that’s pulling away the pension tax dodges for the wealthy saying those with the broadest shoulders who should be bearing the biggest load. Right like those bankers in the Bank of England and the MP’s who make the rules?
I’ve been avoiding the story because it is such a bad example how the trustee’s fiduciary duty has been warped into “feather my nest”.
Here’ was Charlie Conchie in June 2024, Jeremy Hunt is such a nice guy we made him Sir Jeremy this month and he’s a beneficiary of this DB scheme, accruing as I type away!
The FT this week had a word this week with Jeremy (now Sir)
Sir Jeremy Hunt, a former Conservative chancellor who also tried to channel more pension savings into UK equities, said the MPs’ scheme should lead by example.
The numbers in the caption below are 2024 numbers – the anomaly has got worse!
I don’t know if Victoria Bell, the new deputy editor who has been tweaking the tail of the FT but here they are this morning with a repeat of the story, containing the quote from Sir Jeremy.
Now they have a chance to laugh at Torsten Bell and Rachel Reeves whose pension scheme is not investing in the UK and is run by a bunch of trustees some of whom sit in the same chamber as them. The FT , as you’d expect, have the newest numbers
Of course the increase in domestic stocks relates to an increase in public markets such as FTSE 100/250 etc – it’s actually been a rather sorry year to be underweight the UK!
But that’s not the story. The story really is that if anyone needs mandating to invest on behalf of the whole of the country and lead the way, it is the trustees of the MP’s pension scheme.
The trustees of the MPs’ scheme — who have ultimate responsibility for asset allocation — include powerful political figures in both parties, including Labour’s Dame Meg Hillier, chair of the Treasury select committee, and Dame Harriett Baldwin, her Tory predecessor in the role.
The scheme is not in an end game, it is open to future accrual and new MPs join it when they get elected. Sir Jeremy Hunt wants DB schemes like this to move to CDC, maybe he’s speaking with David Fairs about a CDC superfund.
Frankly, this is all tittle tattle and pre-Christmas fun for journalists. Torsten and Rachel can go to Harriett and Meg as members can their trustees in any pension scheme, they can let their feelings be felt but until we recognise that our pension schemes have been following regulations that have been enforced by a Pensions Regulator intent on lock-down, the Government has no one to blame but themselves.
It is Nausicaa Delfas that Torsten and Rachel should be having a word with.
