As individuals we have little control over how we “insure” our future. As pension funds gain more and more control of our individual finances, it will become increasingly important to ensure that the investments they make relate to our needs and not just provide short-term financial returns on investment.

Socially responsible investments help our ageing planet but provide little benefit to the ageing individuals who have paid into them.

Pensions funds are big business.US public pension obligations were estimated at $5.96 trillion at the end of 2017; that constitutes more than 30% of the US GDP. Despite the intense regulation of pension organizations, the current system is failing.

It is unlikely that government and private-sector pension funds will be able to fulfil all their financial forecasts into the middle of this century.  The US already has a pension shortfall of $1.63 trillion, which means that that recipients can expect less than three quarters of what they had been promised as their retirement benefit.

To date most pension funds have used asset managers to solve the problem of the shortfall by determining investment strategies based on common market benchmarks such as S&P/BMV IPC (IPC).

Why aren’t healthcare services high on the list of investment opportunities? Firstly, for-profit health institutions are seen as socially unacceptable investments in countries where health is still a right not a privilege. Secondly, outside investments in the pharmaceutical industry, the profits required to make up the shortfall in pension funds are not in health care. Thirdly, commitment to interweaving healthcare with other societal benefits is not high on government agendas – but it should be. In a time when education, health, and housing are suffering under extreme funding shortages, pension funds should be used to invest in joint ventures. For example, subsidised housing and tuition fees could be provided for health care students in return for care services.

Perhaps the problem is less about money and more about how performance is measured. Evidence is emerging that returns of pension funds that pay performance fees to asset managers are no different from those that pay no performance fees.

Recently, some pension funds have moved to more socially responsible investments. For example, the California Public Employees’ Retirement System (CALPERS) and the Swedish National Pension Funds have streamlined their policies to invest only in socially responsible companies.

These investments may help our ageing planet but are not much benefit to the ageing individuals who have paid into them as their returns generally do not match other investments.

Responsibility for health care is shifting all the time. Populations are becoming more involved in decisions about their care. But they are not yet fully engaged in the financing of their futures. This may be because pensions are more designed to protect the income of the institutions that manage them that to service us as individuals.