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Twitter effect hitting pension strategy

The “twitter effect” of society’s obsession with short-term decisions is undermining the pension industry’s ability to deliver, according to the chair of the National Association of Pension Funds.

At the NAPF’s annual conference in Liverpool last week, chairman Lindsay Tomlinson said funds were being driven by the desire to make short-term decisions. He said: “Quite simply, as a pension fund investor, how do you make a 50-year investment decision using something like twitter?

“It is extraordinarily difficult to make long-term decisions in our modern day society. We are all completely overloaded with trivial and useless short-term information.”

Tomlinson spent much of his career managing pension funds at Barclays Global Investors, rising to vice-chairman before its takeover last year by US fund manager BlackRock, of which he is now managing director.

At last year’s conference, Lord Myners called on pension investors to take a longer-term view, something Tomlinson says is impossible in the current environment.

He says the collapsing of attention spans feeds into corporate management with stakeholders taking too short-term a view or corporations being pressured to do what is right for the market rather than what is best for the long-term development of the business.

He said: “It is inevitable that although pension fund investors are truly long term in their requirements, they are bound to use measurement tools which operate in the normal lifespan of executive managements, that is, measured in years rather than decades.”

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