The Politics of Advice
| Date | 01 October 1985 |
| Author | Richard Minns |
| Published date | 01 October 1985 |
| DOI | 10.1111/j.1467-9256.1985.tb00109.x |
| Subject Matter | Article |
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THE POLITICS
OF
ADVICE
Richard
Minns
Pension funds are currently worth (estimated at' the end of 1984) over
€120 billion. This represents investment in company shares, government
securities and property, both in the
UK
and overseas. The funds have been
built up from the contributions by employers and employees to pension schemes.
The contributions are then invested for retirement, after current pension
liabi
1
i
ties are met.
Pension schemes are run by employers in private companies, public
corporations and local authorities. Most have boards of trustees, or the
equivalent, whose duty
is
to invest the fund. However, most boards of
trustees delegate the management of investments to established City
institutions, or they involve these institutions in an advisory capacity.
Leaving aside the pension schemes which are 'insured' schemes, over two-thirds
of pension fund investments .are managed on a day-to-day basis by banks,
stockbrokers and other institutions. It was estimated in the mid 1970s that
although pension funds 'owned'
17
per cent of quoted company shares, 24 per
cent was actually 'controlled', in terms of buying, selling and related
decisions, by banks and brokers (Minns,
1980;
Coakley and Harris, 1383).
Local authority funds represent over €15 billion of the
€120
billion
total. However, they are structurally different from private sector funds
and public corporation funds. Local authority funds are the only
ones
which
are administered by politically accountable bodies
-
that
is,
bodies elected
on party political lines to implement particular policies. They have duties
and responsibilities as local authorities, just
as
companies and public
corporations have duties and responsibilities in their own particular areas
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