That pensions thing

The NEF's basic idea is that when a public authority of any kind has a capital project on, they could form a mutual pension fund to finance it. The members would sign up and pay in their pension contributions + employer contributions and the like, and the fund would build the project and lease it to the government for 30 years. The lease payments would provide the income stream to pay out the pensions. The members would own the fund, which would be internally democratic. Obviously, the fund could only fail if the government decided to close out the service without replacing the building - but if the lease had not yet been paid off, the assets would revert to the fund. The constitution of the fund would stipulate that it could not be converted to a private company. To get the ball rolling, the current right to contract out of the second state pension and have your contributions placed in a privately managed fund would be replaced with a clause alowing you to put them into one of these instead. Although the money would leave the national insurance fund, it would return to government as the funding for public construction projects. As the pension payments would replace either PFI payouts or interest repayments on the national debt, the whole thing would be cash-neutral. (Comparing it to the private finance initiative as a means of financing government construction, it would likely be cheaper.) Seems like a good idea to me.

NEF suggest that the schemes be as small and localised as possible, but I feel this could be a problem - after all, projects below a certain size would be uneconomic to set up, and even bigger ones might be problematic in the sense that members would need to join several to get a living income. And how will they achieve such democracy then? But this is probably soluble - funds could of course take on a group of small projects, or a large institution like a city council or Regional Development Agency could set up a single big'un. Comments please.