Pension Fund Investment

Summary

The requester asked for specific stock and company holdings of the Isle of Man pension funds, but the Treasury refused to disclose detailed data citing commercial interests exemptions, instead providing a high-level asset allocation breakdown.

Key Facts

• The request covered both the National Insurance Investment Account and the Public Service Employees Pension Reserve.
• Detailed holdings were withheld under section 30(2)(b) of the FOIA 2015 to protect the commercial interests of third-party investment managers.
• The Treasury argued that disclosure could deter future investment managers from tendering and reduce the quality of fund management.
• Broad asset allocation figures were released for the National Insurance Investment Account as of 31 March 2019.
• The response highlighted that investment managers operate under discretionary mandates considering social, environmental, and ethical conduct.

Data Disclosed

• 2019-05-15
• 2019-05-29
• 31st of March 2019
• 179,882,737.49
• 205,231,490.24
• 24,365,858.64
• 288,661,621.59
• 87,063,422.06

Exemptions Cited

• Section 30(2)(b) of the FOIA 2015 (Prejudice to commercial interests)

Original Request

Under the FOIA 2015 I am requesting the figures of what the islands pension fund is invested in. I.E What stocks, companies, commodities.

Data Tables (2)

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: 823766 29 May 2019

Dear ###

I write further to your request which was received on 15 May 2019 and which states:

"Under the FOIA 2015 I am requesting the figures of what the islands pension fund is invested in. I.E What stocks, companies, commodities." Thank you for the clarification you subsequently provided, which confirmed that you are interested in data in respect of both the National Insurance Investment Account and the Public Service Employees Pension Reserve, which are referred to collectively herein as the “Pension Funds”. While our aim is to provide information whenever possible, in this instance the information is exempt from disclosure under section 30(2)(b) of the Act as disclosure would be likely to prejudice the commercial interests of the investment managers appointed by the Treasury to manage the Pension Funds. By way of background, you may be aware that 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. In this instance, we are satisfied that disclosing the list of information requested in respect of the two Funds, would enable other investment managers to identify the holdings, strategies and fees and total expense ratios of the investment managers responsible for the Pension Funds. This range of strategic information is all considered to be market sensitive and would not under any other circumstances, be made publically available by an investment manager. Disclosure of such strategic information would be likely to impact an investment manager’s competitive position, for example when vying for work through a competitive tender, which would in turn have a detrimental impact on the businesses’ commercial revenue.

We are therefore satisfied that the release of the information requested would be likely to prejudice the commercial interests of the investment managers responsible for the Pension Funds. As section 30 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 Pensions Funds are being invested, which may be of general interest to members of the public. • To allow detailed scrutiny of Government’s investment portfolio. • Disclosing the information would be consistent with the Treasury’s approach to publish data either proactively, or upon request, whenever possible. 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. It is likely that disclosing this information will deter investment managers from submitting tenders to manage the Government’s Funds going forward, which in turn will impact the quality of the investment of the specified Funds. A reduction in the quality of, and return from, Government’s investments is not in the public interest.
• Disclosure could damage the credibility of the Government as a place to do business with. There is no expectation on the investment managers’ part that the portfolio holdings will be published to the general public, nor is there any precedent for such disclosure. • There is a risk that disclosure of the information may be construed as Government providing investment advice, which may influence investment decisions by members of the public without them having sought necessary investment advice. This could be financially damaging for those members of the public. As the Treasury is classed as an ‘experienced investor’ the portfolios are constructed by the investment managers with this knowledge.
In weighting these factors, the Treasury has given due consideration to the time- sensitive nature of the data. As the information requested is ‘current’ its release will have a greater impact than the publication of historic data of the same nature. 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.

Notwithstanding this determination not to disclose the detailed holdings information to you, we do accept that there is a public interest in understanding how the two Funds are invested, particularly given their nature as Pension Funds. As such, we would like to provide you with some broad information about the types of assets the Pension Funds are invested in. We trust that this information is of interest to you –

The asset allocation breakdown of the National Insurance investment Account as at 31st of March 2019 was: Amount (GBP) UK Fixed Interest 179,882,737.49 UK Equities 205,231,490.24 Overseas Fixed Interest 24,365,858.64 Overseas Equities 288,661,621.59 Other Investments 87,063,422.06 Cash & Cash Instruments 111,104,365.79 The asset allocation breakdown of the Public Service Employees Pension Reserve as at 31st of March 2019 was: Amount (GBP) UK Fixed Interest 28,592,556.82 UK Equities 24,799,986.08 Overseas Fixed Interest 11,771,189.74 Overseas Equities 29,892,084.96 Other Investments 2,056,760.72 Cash & Cash Instruments 9,366,527.21 Other investments include property, commodities, infrastructure, agriculture and hedge funds. Please quote the reference number 823766 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