Push the reset button on pension funds

2 responses to “Push the reset button on pension funds”

1. 

   Tim MacDonald

   October 31, 2012

   Bravo to Ms. Burrow for issuing this call to action.

   I believe there is an answer the legal profession can offer, and I am working now to organize that response.

   The answer is investing into the means of production in the Real Economy, rather than buying and selling securitized assets that are traded as commodities, for a price, over an Exchange (or other speculative trading platform).

   The Securitized Economy can bring enterprise and investment together along only one, single point of shared value. That is the market clearing price for the enterprise as a securitized asset, broken up into bite-sized pieces that are traded as commodities over the Exchange.

   In the Real Economy, however, enterprise and investment can come together along multiple points of shared value. Some of these will have to be financial, but others can be societal.

   For stewardship investing by fiduciaries, the financial values will always be the same: principal protection, programmed performance, threshold returns, constancy, transparency, and alignment of incentives.

   Societal values can be custom-crafted by agreement directly between enterprise and the fiduciaries making the investment, and may include any or all of the most critical societal issues of our time: climate stability, resource stewardship, social mobility, financial integrity, global community and economic adaptability.

   Business training is the right background for success is speculative trading on price.

   Legal training may prove to be a better background for success in constructing agreements between enterprise and investment along multiple points of shared value, some financial, others societal.

   This is only an inspired idea at this time, but I believe it will prove to be a good one.

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2. 

   Denis Carroll

   October 27, 2012

   Ms Burrow makes some very good points. But how do you encourage fudiciaries in Australia repsonsible for workers’ retirement savings to take a long term view when you force them to report their investment returns on a strictly annual basis? It is counter intuitive to take workers’ retirement savings for the long term and then report to them only on year by year benchmarks without any refernce to the real longer term value of those investments. Do we panic and sell our houses each year if the value drops for that year? No, we know the intrinsic value of those assets and take into account the prevailing market circumstances at the time.

   Why doesn’t Government require super funds to report the obviously necessary annual market value of investments and returns AND also include a certified and qualified opinion of the longer term value of those investments over say 5 and ten years for example.

   This would encourage super funds to invest for their members with a longer term focus, encourage more interest in infrastructure and nation building strategies, help reduce the ridiculous paranoia with short-termism which abounds in this country and also give super fund members more confidence in their super funds’ strategies and maybe even comfort that their funds (which belong to them anyway) are being invested wisely for their future.

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