Full Pension and Reserves Investment Breakdown

Summary

A request was made for a full breakdown of investments in the National Insurance Investment Account, Public Service Employees Pension Reserve, and government reserves to assess transparency and ethics. The Treasury refused to disclose the information, citing that doing so would prejudice the effective conduct of public business during an upcoming tender for investment managers.

Key Facts

• The Treasury does not select specific holdings; third-party discretionary investment managers decide based on agreed mandates.
• Disclosure was refused under Section 35 of the FOI Act 2015 (conduct of public business).
• The Treasury is scheduled to commence a tender exercise for investment management services within weeks of the response.
• Releasing portfolio details could damage the Treasury's credibility and deter investment managers from applying to the tender.
• Previous FOI requests regarding fossil fuels, pension funds, and armaments corroborated the position that portfolio details are not made public.

Data Disclosed

• 1558209
• 2020-11-13
• 2020-12-16
• Section 35
• FOI Act 2015
• 16/04/18
• 15/05/19
• 08/11/19

Exemptions Cited

• Section 35 of the FOI Act 2015 (conduct of public business)

Original Request

Under the FOI Act 2015, one would like to request a full breakdown of what the National Insurance Investment Account and/or the Public Service Employees Pension Reserve are invested in, as well as the government reserves. This is to aid transparency of where public money is being spent, and if the investments are ethical.

Data Tables (1)

Full Response Text

Freedom of Information Seyrsnys Fysseree

The Treasury Government Office, Douglas Isle of Man, IM1 3PU

Telephone: (01624) 685605 Email: FOI.Treasury@gov.im

Government Website: www.gov.im

Our ref: 1558209 16 December 2020

Dear ###

We write further to your request which was received on 13 November 2020 which states:

"Under the FOI Act 2015, one would like to request a full breakdown of what the National Insurance Investment Account and/or the Public Service Employees Pension Reserve are invested in, as well as the government reserves. This is to aid transparency of where public money is being spent, and if the investments are ethical."

While our aim is to provide information whenever possible, in this instance the information is exempt under section 35 of the Act (conduct of public business), as disclosure would otherwise prejudice the effective conduct of public business by the Treasury. Specifically, in this instance, we are satisfied that disclosure would likely prejudice the effectiveness of the Treasury in appointing the most appropriate third party discretionary investment managers (“investment managers” to manage Government’s Funds when it undertakes the forthcoming tender exercise for these services.
The reasons why we have reached this conclusion are explained more fully in the following paragraphs: It is the Treasury’s responsibility to manage the Isle of Man Government’s finances, and this responsibility extends to overseeing the investment of Government Funds by our investment managers. The Treasury does not select the holdings within the portfolios for any of its Funds; these are decided upon and selected by third party discretionary investment managers within agreed contracts and mandates which take into account social, environmental and ethical conduct, which are relevant to both the current and anticipated future financial performance of the investment.

The ultimate goal of investing Government’s Fund is of course to make good returns, which can then be applied in the Island, however this is balanced against the need to ensure such investments are responsible. Achieving this outcome is dependent on the quality and effectiveness of the Investments Managers that are appointed.
You may be aware that the Treasury is scheduled to commence a tender exercise for the procurement of investment management services within the next few weeks. It is in Treasury’s interest to maximise the number of investment managers that apply under this tender exercise, as this will allow Treasury to make structured and considered decisions about which are the most appropriate investment managers for Government at this time.
In respect of the current incumbent of investment managers, there is no expectation on their part, (or on the part of Government) that the details of their investment portfolio (i.e. the stocks, companies and commodities within which an investment has been made) will be made public. Indeed, the Treasury’s responses to a number of previous requests under the Act have corroborated this position1. Because there is no expectation that details of investment portfolios will be disclosed, we anticipate that if we were to disclose that information at this time, it would damage the credibility and trustworthiness of Treasury as a place to do business with. We anticipate that this would deter some investment managers, including those currently in position, from submitting tenders to manage Government’s Funds in the forthcoming tender exercise.
Because of the combination of these factors, we consider that disclosure of this information at this time, would dissuade investment managers from applying under the tender exercise and this would likely prejudice the effectiveness of the Treasury in appointing the most appropriate investment managers to manage Government’s Funds in the forthcoming tender exercise for these services.
As section 35 is a qualified exemption, it is subject to a public interest test. The public interest must be something that is of serious concern and benefit to the public at large.

Factors in favour of disclosure • Release of the information will demonstrate where the Funds listed are being invested, which may be of general interest to some members of the public. • Release of the information will allow detailed scrutiny of Government’s investment portfolio. • Releasing information would be consistent with the Government’s approach to transparency and open data. • There is a public interest in understanding the Government’s approach to ethical investment for example. Factors in favour of withholding • There is a public interest in ensuring Government’s Funds are invested in a sound manner by suitably qualified investment managers. This outcome will 1 See requests available on the FOI disclosure log: “Investment in fossil fuels” (dated 16/04/18); “Pension Fund Investment” (dated 15/05/19); and “Armaments Investments” (dated 08/11/19).

most likely be achieved in circumstances where Treasury has the choice of a wide range of investment managers from which they can select the most appropriate for appointment. Disclosure would likely compromise this from being achieved. • Disclosure could damage the credibility of Government as a place to do business with. This could prejudice the effectiveness of not only the imminent tender exercise for investment management services, but also future tender exercises. In weighting these factors, the Treasury has given due consideration to the time sensitive nature of the data and in particular the immanency of the tender exercise for investment management services. In conclusion, having taken these factors into account the Treasury has determined that the factors in favour of maintaining the exemption, outweigh the factors in favour of disclosing the information. We appreciate that this response does not provide you with the information you require and we recognise that the public interest in favour of disclosure in this instance is only marginally lower in weighing that the factors in favour of withholding this information. The expectation of confidentiality in respect of existing investment portfolios is a major factor in this case, along with the timing of the forthcoming tender exercise for investment management services. Going forward, it is aim that we will be able to provide more transparency in respect of our investment portfolios. The paperwork to be issued in respect of the forthcoming tender exercise will clearly establish an expectation that details of investment portfolios may be released.
Please quote the reference number 1558209 in any future communications.

Your right to request a review

If you are unhappy with this response to your freedom of information request, you may ask us to carry out an internal review of the response, by completing a complaint form and submitting it electronically or by delivery/post.

An electronic version of our complaint form can be found by going to our website at https://services.gov.im/freedom-of-information/Review . If you would like a paper version of our complaint form to be sent to you by post, please contact me and I will be happy to arrange for this. Your review request should explain why you are dissatisfied with this response, and should be made as soon as practicable. We will respond as soon as the review has been concluded.

If you are not satisfied with the result of the review, you then have the right to appeal to the Information Commissioner for a decision on; 1. Whether we have responded to your request for information in accordance with Part 2 of the Freedom of Information Act 2015; or 2. Whether we are justified in refusing to give you the information requested.

In response to an application for review, the Information Commissioner may, at any time, attempt to resolve a matter by negotiation, conciliation, mediation or another form of alternative dispute resolution and will have regard to any outcome of this in making any subsequent decision. More detailed information on your right to a review can be found on the Information Commissioner’s website at www.inforights.im. Should you have any queries concerning this letter, please do not hesitate to contact me. Further information about freedom of information requests can be found at www.gov.im/foi.

I will now close your request as of this date.

Yours sincerely