In this crisis we hear politicians asking citizens to start buying again. Pension funds are asked to invest more in their home country. The reaction are mostly negative. Citizens don’t want to spend money in these uncertain times. Pension funds argue that more local investments would harm their diversification strategy.
I think that the aims and objectives of politicians, pension funds and their participants could be much more aligned than we think based on what we hear.
I observe that there are numerous local initiatives in the field of renewable energy, healthcare, food, education, etc. Many small-scale initiatives. many people who like to. Often there is need money for this kind initieven. Often there is a good business case and can be given a nice return.
Pension funds do well to look to their participants. More contact Listen to what moves them. Help them to realize their dreams.
Take Anna and Peter who want to install solar panels. The investment at the beginning is actually the only obstacle for them, but a serious hell. If their pension would know this, then the following can happen: Anna and Peter’s pension fund borrows the money. The solar panels are placed. Anna and Peter then having no or less money to pay for their energy. This money can be used to pay to the pension fund interest and principal. The investment is in a sense Anna and Peter’s own money is “tight” in their pension fund. Suddenly can be that “own” money their desire, their renewable energy project, designed and implemented. Their pension fund gets a good return of, say, 7.5% for 15 years. This is the kind of investment where pension funds are more like to have. After 15 years, the modules are the property of Anna and Peter. Anna and Peter have then at least another decade or free electricity from the solar panels that will last at least 25 years.
What would be achieved?
– Anna and Peter are supported
– Anna and Peter are excited about the helping hand of their pension fund
– Anna and Peter feel much more involved than before in their pension fund
– The pension fund gets a high return for quite a safe investment for a long period
– The investment is in the local economy
– Netherlands is getting closer to its sustainability goals
The pension fund could further offer Anna and Peter an attractive possibility to use the money savings to buy additional retirement pension. And the execution of all of it is doable. It can be done very efficient. I have seen a great software solution for it!