December 6 2013 Latest news:
Ian Weinfass, Senior reporter
Thursday, December 27, 2012
One of Havering Council’s pension investment funds has lost £10m in seven years, the Recorder can reveal.
The fund, managed by UBS, has seen £33m invested in it since 2005, but in November its value was just £23m.
But the council argues that this has been partially offset by a £6m gain in rental income elsewhere.
The investment funds go towards paying the pensions of council workers and others in its scheme – including teachers, and staff at some contractors used by Havering Council.
The opposition Residents’ Association group is calling for a review of investment strategies following the revelation.
RA leader Cllr Clarence Barrett said: “While all pension funds have gone through turbulent times since 2005, this particular investment portfolio has struggled for quite some time.”
The latest investment in the fund was £7m in May 2011.
Recalling the council investing in Icelandic banks before the 2008 crash, Cllr Barrett added: “At least with the £12.5m deposited in Iceland there was an element of surprise, but this investment has deteriorated over a number of years.
“In no way can the pension fund afford to lose such a huge sum.
“We shall be asking for a review of the investment strategy and also of the advice given to make sure we are not just throwing good money after bad.”
Marshajane Thompson from Havering Unison, said: “It’s very disappointing but it’s not entirely surprising. We’ve been calling for a long time for proper trade union representation when it comes to pension investments.
“We’ve been asking for voting rights so that the people who pay in to their pensions have a say over where their money is going.”
But Cllr Roger Ramsey, the council’s finance chief, said: “Pensions are a long-term investment and our pension fund uses managers to invest in several diverse investments to protect our fund from fluctuations in the stock market such as this.
“Of all our fund managers, this is the only one which, over the lifetime of the investment, is currently showing a loss.”
He added: “This has been off-set by £6m in rental income from the manager, which owns office and retail units across the country.”
A 41-year-old man has been stabbed at an address in Harold Hill.