London Mayor Boris Johnson wants to merge the country’s 39,000 public sector pension plans into one scheme, which would invest in building and updating the UK’s roads, airports, railroads and other infrastructure.
The Mayor says the plan would give pensioners great returns while improving the infrastructure of the country. From the Daily Mail:
A single fund could be used to create a ‘Citizen’s Wealth Fund’ to boost the economy and improve roads, rail and airport links.
Mr Johnson argued in the Daily Telegraph that incomes from tolls on new roads, passengers on new railways and airport charges would help create returns of up to 8 per cent for pensioners who invested with them.
He calculated local authority pension funds alone could hold assets of more than £180billion, while combining all public sector pensions would yield ‘hundreds of billions’.
Mr Johnson said: ‘There are more than 39,000 public sector pension funds in this country – each with its own trustees, managers and advisers and accountants. The waste is extraordinary.
‘Think of all those advisers and investment managers taking their fees – their little jaws wrapped blissfully around the giant polymammous udder of the state. Think of the duplication.
‘But it is worse than that – because this country is missing a huge opportunity, and one that is being exploited by more sensible governments around the world.’
Mr Johnson said: ‘The little pension funds will fight for their independence; they will make all sorts of spurious arguments about the need for “localism” in managing this dosh, when of course the advice is all subcontracted to the same legion of investment managers, and when what they really care about is their fees and their tickets to Wimbledon…and their golf-club bragging rights.
‘The vested interests must be ruthlessly overridden. It is time for Britain to have its own Citizens’ Wealth Fund, deploying our assets in a useful way, helping us to bolster pensioners and cut pointless public expenditure at the same time.’
Pension funds from other countries, such as Canada, have invested in British infrastructure already.