The Wellcome Trust, based in London, displayed “very clear objectives” and “out-of-the-box thinking about asset classes and how they implement ideas” in investment strategy, he said. This was overseen by a strong investment committee.
At the Washington, DC-based District of Columbia Retirement Board he met an executive coping admirably with scant staff and an unruly board.
“The poor lady who was trying to run their superannuation scheme: on her own, under-skilled, under- staffed,” Mellor recalled. “The trustee board was made up of eight policeman, eight firemen and eight teachers. She recognised what she could do and couldn’t do.”
Different markets, same challenges
Insights into how other funds confront governance challenges helped CPT form its policies. There is value is sharing ideas, Mellor said, before reflecting on recent lost opportunities for collaboration among pension funds globally.
Over breakfast, super fund directors and trustees read newspaper reports about the Chancellor of the Exchequer’s aim to raise £20 billion from London pension schemes to fund infrastructure development. The connection was not lost to Mellor.
“So, we all get together in the UK and re-invent the wheel our way. But if I wanted to invest in infrastructure, I’d go to Canada or Australia. You have got really well-developed business for this.”
The UK Government’s development of a defined-contribution pension scheme for low-to-middle income workers, the National Employees Savings Trust (NEST), in recent years also provided an opportunity for collaboration with Australian funds. “Do we know anybody with a compulsory defined-contribution scheme across the country that’s working well? Why don’t we go over there and talk to you,” Mellor said.
Solidarity in sustainability
Helene Winch, a director at the £38-billion BT Pension Scheme, spoke about the defined benefit fund’s collaborative efforts to spotlight environmental, social and governance risks.
The BT Pension Scheme was among the funds that helped found the United Nations Principles for Responsible Investment. Through Hermes Fund Managers, a company fully owned by the scheme, it lends its capital to other clients of shareholder activist Hermes Equity Ownership Services. Funds also helped fund Mercer Investment Consulting’s climate change project and share research through the Toronto-based International Centre for Pension Management.
Pension fund collaboration may not be restricted to research and policy campaigns, Winch said. “As yet, we haven’t directly co-invested with other pension schemes. We’ve worked on many bids together, and we’ve been made conscious of the ease of gaining alignment with other pension schemes in comparison to gaining alignment with the fund manager. We definitely plan to do more of this.”
Geoff Mellor, Helene Winch, Coal Pension Trustees (CPT), United Nations Principles for Responsible Investment, Mineworkers’ Pension Scheme, Hermes Fund Managers, British Coal Superannuation Scheme, Hermes Equity Ownership Services, UK pension regulations, International Centre for Pension Management, hostplus, investment governance principles, Sam Sicilia, australiansuper, ATP, JANA Investment Advisors, Industry Funds Management (IFM), District of Columbia Retirement Board, Industry Super Network, The Wellcome Trust, Global Dialogue 2012, National Employees Savings Trust (NEST), Australian Institute of Superannuation Trustees, BT Pension Scheme
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