Resisting pension fund capitalism: a webinar series

Over the last decade and a half, we at GRAIN have watched as pension funds and other institutional investors have become increasingly active in food and agriculture in different parts of the world. Their involvement has taken various forms: direct acquisitions of farmland, buying shares in food and agribusiness companies or taking stakes in private equity funds which are themselves increasingly invested in food, water and agribusiness. This all adds up to more money and power for large agribusiness corporations. And it has been critical to the expansion of industrial farming and corporate food chains around the world.

But the problem runs much deeper. Today the world's pension funds have an estimated US$52 trillion in assets under management. It is no exaggeration to say that the retirement savings (or deferred wages) of workers represent the number one fuel of the global financial industry, and this pot of money is growing steadily every year. Pension fund money is deeply implicated in pretty much all of the most destructive aspects of global capitalism, and is playing a leading role in its expansion through such things as the privatisation of public services.

Because of their investments, pension funds now sit on the opposite side of on-going struggles by workers and small food producers, not only over food systems and agrarian reform, but also over the climate crisis, housing, health care, elderly care, working conditions, austerity and privatisation policies and numerous other flash points. The retirement savings (or deferred wages) of workers are therefore being increasingly deployed against other workers and communities. Much of the talk about “socially responsible” or “environmental, social and governance” sensitive investment is just feel-good rhetoric, with zero substantive commitment toward real change.

Of course, not all pension funds are created equal. In some countries, state-run public retirement systems are still functioning. Wages are withheld “on paper” for payout after retirement, but in reality are deployed to finance current pensioners’ living costs. These systems, operating in countries like New Zealand, India, France or South Africa, are often trusted and esteemed by workers, the fruit of long struggles and special political moments. But they are under intense pressure and face the threat of privatisation and financialisation. The private pension system that has taken root in more aggressively neoliberal economies like the US, Chile, UK or Canada, thrives on more of an individual savings mode, where wages are handed over to the financial industry, with a view to be collected later on. And then there are myriad hybrid schemes. In many of these cases, regardless of whether they are run by the public or private sector, portions of wages are being collected and parked in investment projects, supposedly to increase capital and wealth. However they are structured, retirement funds are under pressure to survive due to ageing populations, declining birth rates, low interest rates and growing deficits in many countries. And let’s not forget that many workers have no retirement savings at all.

We believe that all of this points to a fundamental problem that requires deep, structural transformation. There is a need to get pensions out of destructive investments like industrial agriculture, which is destroying our health, the climate and the countryside. And there is a need to rethink how we fund people’s living and health expenses in their later years, without propping up unaccountable funds and tax-dodging billionaires.

While we see merit in actions to try and get pension funds to divest from certain investments (ex. campaigns to get them to pull out of farmland) and invest in others (ex. worker-owned enterprises), we think we have to challenge the very idea that pension funds, as they are currently structured, are capable of making investments that support the long-term interests of workers and food producers. The reality is that the current system is failing to provide retirement security to most people (even in the global north) and is increasingly channelling capital in ways that undermine the well-being of communities across the planet.

To help build awareness and understanding about this problem and to encourage thinking about what can be done about it, GRAIN organised two 90-minute webinars, with support from A Growing Culture and allies from the labour movement with a long history of working on the issue. The purpose of the webinars is to help activists gain a better understanding of how pension funds work, what they invest in, what the impacts are and what people can do about it. The webinars were open to the public, accessible in multiple languages (depending on need) and made available online afterwards.

How do pension funds operate in different parts of the world? What are they invested in? How are they managed? Who are they accountable to? Who is served by these systems and who isn't? How important are pension funds to global capitalism? What are the impacts of pension fund investments? What is their footprint on the climate, our food systems, labour exploitation, etc? What are some of the trends to be aware of (public-private partnerships, privatisation of public services, farm and timber lands, private equity, infrastructure, ESG, de-risking)?

Webinar 2 | 9 June 2022 at 14:00-16:00 GMT: Resisting pension fund capitalism*

Programme:
What has been done so far to address the problems with pension funds and what are the limitations? What alternative ways can we better secure the well-being of the elderly and the needs for public investments? What examples of action can we look to for inspiration?

Chile’s struggle to transform its pension system: Francisca Barriga (Fundación Sol) - click here for presentation (in Spanish only)