Call for ballot on ethical pensions

17 Jul 08
Liverpool City Council is pressing the Merseyside Pension Fund to give its members a vote on whether ethical issues should be included in its investment principles.

18 July 2008

Liverpool City Council is pressing the Merseyside Pension Fund to give its members a vote on whether ethical issues should be included in its investment principles.

The £4.3bn fund holds the pension savings of about 100,000 staff at five local authorities and other employers. Its investments include arms maker BAE Systems and military supplier Rolls Royce.

Liverpool council is now demanding a ballot of beneficiaries, to see if they want 'an ethical dimension' added to the fund's Statement of Investment Principles, in line with a resolution passed unanimously by councillors on July 9.

Liberal Democrat councillor Richard Oglethorpe, who proposed the motion, said: 'Decisions about the use of these funds, which belong to the pension fund members, have traditionally been left in the hands of a few councillors and council officers and their consultant advisers. I am calling for the views of pension fund members to also be heard.'

Beneficiaries should be able to say whether they 'mind their money potentially being invested in nuclear power, in countries with oppressive regimes, in the arms industry or in polluting activities', Oglethorpe added.

But a spokeswoman for the fund said it did not agree that a ballot was necessary. It had a legal obligation to make the most from its investments, she said, adding: 'Excluding certain stocks or activities from investment portfolios would create additional risk, which may not be rewarded by a higher return.'

Oglethorpe – who was nominated to the board of the fund at Liverpool's council meeting – said he would continue to put the authority's case. 'I'm meeting with the finance director of Wirral Council [which manages the fund] in the next couple of weeks.' Liverpool has also written to the other local authorities involved in the fund to seek their support.

The question of ethical investment has increasingly been raised in universities, but has received less attention elsewhere in the public sector.

Nigel Keogh, secretary to CIPFA's pensions panel, did not want to comment on the Merseyside fund but said: 'We would encourage funds to take a look and consider how they might reflect the principles of responsible investment in their investment policies.'

PFjul2008

Did you enjoy this article?

AddToAny

Top