A Daft Half Penny: Sustainable Investment Found Lacking Among UK Pension Funds

"A large number of corporate pension funds are still lagging behind the leading schemes in their approach to responsible ownership and investment." -- UKSIF chief executive Penny Shepherd[1]

The cost of paying for future pensions in the United Kingdom has inflated due to a reduction in the yield of government bonds, according to figures released last month by the Pension Protection Fund (PPF), a statutory fund that protects members in case of employer insolvency.

Institutional interest in sustainable investing grows in Germany

Germany’s status as a leading centre for shareholder engagement on sustainability and corporate governance has been reinforced by research finding two thirds of institutional investors favour using such issues when investing, and most follow this with active engagement.
 
On average German institutional investors apply sustainable factors to half their assets, but this rises to almost three quarters (73%) for foundations, according to the survey, by Union Investments of 218 large-scale investors managing about €1trn.

Europe's Pension Deficits May Provoke Investor Scorn

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Europe needs to cut its pension deficits or risk prolonging the region’s debt crisis as investors punish governments that don’t force citizens to work longer, said Finnish Finance Minister Jyrki Katainen.
Failures to address pension deficits “have come to the forefront with a completely different degree of gravity,” Katainen said in an interview. Investors “don’t just look at the budget deficit or debt, but the structural weaknesses,” he said. Finland, home to Europe’s fastest-aging population, is a “test lab” for gauging how pension shortfalls will affect government finances and debt markets, he said.
Europe spends almost four times as much on its retirees as China, measured as a proportion of gross domestic product, and one and a half times as much as the U.S., according to Standard & Poor’s. Europe’s “unsustainable” retirement spending will ultimately hurt its creditworthiness, the rating company says.
“Time is running out,” said S&P’s Madrid-based analyst Marko Mrsnik in an interview. Europe’s “current systems, the way they are designed and given the underlying demographic profiles, are unsustainable in several countries.”

A sustainable plan for pension reform

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The Massachusetts public pension system is unsustainable and it's time to fix it.

We rely on a publicly invested contributory pension fund to pay retiree benefits. The current fund balance is about $44 billion. By current estimates, that's about $22 billion short of what is needed to meet our future payment obligations.

Ever-increasing annual infusions of taxpayer money are needed to make up the difference. This year's taxpayer share is about $1.4 billion — money we could spend on other priorities, like education and public safety. This is unsustainable. It's also unfair to jeopardize payments to the hardworking civil servants who are beneficiaries of the current system.

We need a new approach for the next generation of our state's workforce, and this can be accomplished in three crucial steps.