Written question WQ92827
- Asked by
- Siân GwenllianPlaid
- To be answered by
- Cabinet Secretary for Economy, Energy and Welsh Language
- Tabled
- Due
- Answered
- Time to answer
- 12 days
Question
What recent assessment has the Government made regarding how much of the pension contributions of Welsh workers will be paid into pension funds which keep the benefit in Wales and invest in sustainable activities?
Answer
Answered by Cabinet Secretary for Economy, Energy and Welsh Language
Occupational and personal pensions are reserved matters under the Wales Act 2017. The Welsh Government has not made any assessment of whether pension contributions from Welsh workers are retained in Wales or invested in sustainable activities.
The vast majority of public service pension schemes are unfunded. They operate on a Pay as You Go basis, meaning that there is no fund of assets which is invested and from which pension benefits are paid. Therefore, most public sector pensions in Wales do not have any funds associated with them.
The Local Government Pensions Scheme (LGPS) is a funded scheme, that is, funds are invested to fund payment of members’ pensions. Decisions on the investment of LGPS funds are made locally by administering authorities, in accordance with general legal principles (fiduciary duties and public law principles) and LGPS legislation. The legislation for the LGFPS is set by the UK Government.
Private sector pensions can be UK-wide and pooled across a range of assets, across different financial markets, and put into complex financial product types. It is therefore challenging to track subsequent investments from a particular set of contributors. We are not aware of an appropriate source which can identify where private pension funds from particular workers such as those from Wales, are invested.