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Workers’ Capital News - Dec. 23

In this issue:

  • Pensions and Investments

    Unions & David Cameron Disagree about Impact of Nationwide Strike / Dutch Pension Investor PGGM Develops Tool for Measuring Impact of ESG Investments / Self-contributions to DC Pension Plans Allowed in Japan / Work Stoppage in Belgium over Pension Reforms

Pensions and Investments

Unions & David Cameron Disagree about Impact of Nationwide Strike

As reported by Sky News, public sector workers in the UK recently launched a nationwide strike over pension reforms being proposed by David Cameron’s government.

The government has maintained that raising the retirement age and bringing in career average pensions are necessary reforms, while public sector union members argue that these changes are unfair and will result in workers working and paying more while receiving less in retirement. Those involved in the 1, 000 rallies held across the country included the civil service union ‘Prospect’, teachers, refuse collectors and hospital workers.

The David Cameron government claims that the walkout did not garner widespread support, despite statements by union officials involved in the action that approximately 2 million of their members participated in the strike. The government also responded by calling the strike ill-timed and irresponsible. Chancellor, George Osborne, stated that the strike and any future national action would prove futile in achieving any positive change, and could only serve to potentially weaken the economy and curb job creation. However, Labour leader Ed Miliband argued that public sector workers felt compelled to strike due to the government’s refusal to engage in effective negotiations. The TUC Congress has also extended its support to the strike action. General secretary of the TUC Congress, Brendan Barber, called the government’s pension reforms a form of economic punishment for public sector workers.

Dutch Pension Investor PGGM Develops Tool for Measuring Impact of ESG Investments

A tool measuring the ‘social impact’ of responsible investing has been developed in the Netherlands by pension investor, PGGM, as reported by IPE news. The measuring system, developed with support from the Centre for Strategic Philanthropy based at Erasmus University, focuses on the social effect of environmental, social and governance (ESG) investments.

The social impacts of philanthropic institutions’ responsible investing activities were researched in developing the tool. Various academic studies were used to explore effects of ESG investments, and the local development of responsible investment in microfinance, forestry, and energy. The measuring system is still in development and will first be applied by PGGM towards its private market investments. PGGM is aiming to ultimately use the tool broadly for all its targeted ESG investments, which amount to about €4bn. As stated by Marcel Jeucken, who heads responsible investment for PGGM, pilot projects with the tool will be looked at to evaluate not only whether an ESG investment has met its target, but also whether positive accompanying effects were enhanced and negative impacts lessened. Cited by PGGM as a significant development for pension funds, the Dutch pension investor is now seeking to improve the measuring tool through collaboration with other institutional investors. 

Self-contributions to DC Pension Plans Allowed in Japan

As reported by IPA news, a law in Japan that allows employees to make self-contributions to DC (direct contribution) pension plans will come into effect with the start of the New Year in 2012. Prior to the law, only corporate contributions have been permitted. The IPA article states that this change could have significant impact on DC and the perception of the retirement benefit system, primarily in boosting DC in Japan, which was introduced in 2001.

The article also maintains that the benefits of a DC system are that retirement benefits for workers who have been employed at a company for at least three years cannot be adjusted downward; that early retirees can receive assets gained from previous jobs; and that DC systems are strong against the risk of liquidation of a pension plan. Suggesting that matching contributions from employees will transform Japanese workers’ perception of pensions, from a more passive view of receiving money supplied from the company to a sense of actively managing one’s own wealth, the article argues that this new pensions law is an important part of the huge changes in the retirement system that will unfurl over the next decade in Japan. 

Work Stoppage in Belgium over Pension Reforms

On December 22ndpublic sector workers in Belgium, outraged by the government’s latest austerity measures, including pension reforms, launched a 24 hour strike. As reported by AFP and Reuters, the 24 hour stoppage affected postal services, health services, transportation, and schools, as a broad spectrum of workers took to the streets. This latest strike follows prior protests that took place in the beginning of December, when approximately 50 000 Belgian workers denounced the new government’s announced cuts. The strike is also part of a wave of protests that have been sparked across Europe, in nations such as Britain, Portugal, Italy, Greece and Cyprus, where government cuts have been met with strong opposition.

Unions, such as the FGTB and CGSB, have been active in the Belgian protests, applying pressure on Prime Minister Elio Di Rupo’s coalition government to reverse its plans for pension reform. Part of the 2012 budget plan, the pension reforms are aimed at reducing the country’s public sector deficit, and include extending the early retirement option from 60 to 62, making it more difficult for workers to retire early. Unions have argued that the reforms are unfair in their adverse effects on workers who are not responsible for the economic crisis, and have also expressed dissatisfaction with the government’s unwillingness to negotiate the terms of the new policies. The government maintains that it is open to dialogue with the unions but that the reforms are ‘long overdue.’

Disclaimer: The CWC News Digest is a compilation of news items covered in industry publications. The content does not necessarily reflect the views of the Committee on Workers Capital or its members. Comments and reflections on news items may be sent to gpatel@share.ca .

 

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