UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Saturday, 12 May 2012

Good enough for Tesco good enough for the LGPS

Tesco, one of the world's largest retailers, says it will manage its own pension fund - one of the largest final salary schemes in the UK - in order to maximise returns and become independent of consultants. The Financial Services Authority has given the retailer permission to start up Tesco Pension Investment: "We are building a high-calibre in-house team to help manage our growing scheme and reduce dependence on external providers," Lucy Neville-Rolfe, executive director of corporate and legal affairs at Tesco said yesterday: http://www.tescoplc.com/index.asp?pageid=97

According to data held by Pension Funds Online, the supermarket group has one of the largest private sector pension schemes in the UK, with over 170,000 employees who are members of their defined benefit scheme, and investment assets worth over £6bn: http://www.pensionfundsonline.co.uk/

Governance will continue to be provided by the trustees of the firm. The firm is currently consulting on changes to its pension scheme which were announced in March and the current decision to manage its own scheme will have no effect on this.

Not long ago Tesco proposed changing the retirement age to 67 from 65 and also announced plans to switch the way it calculates inflation on its pension assets from the retail prices index (RPI) to the consumer prices index (CPI). The supermarket chain is one of only four FTSE 100 companies who still offer final salary schemes to all their staff.

The LGPS with its 101 pension funds could and should take a leaf out of Tesco’s books and take their fund management back in-house. If these contracts were public services we’d demand they were bought back in-house. Instead we feed the greed of the fund managers and their Porsches. Then we would stop paying millions to the firms that are in part responsible for the financial crisis, the double dip recession and the attacks on our pension schemes through austerity.