Falkirk’s Lorna Binnie on pension fund communication
As local authority pension schemes face increasing scrutiny over investment decisions and member communication, those tasked with governance are balancing fiduciary duty with growing demands for transparency and responsible investment.
Councillor Lorna Binnie, Convener of the Falkirk Pension Committee, is at the forefront of these challenges. Overseeing a scheme that serves thousands of members across the local authority, she works with trade union representatives and fellow councillors to scrutinise investment strategies and ensure effective member engagement.
Speaking to LAPF Investments at the LAPF Investment Strategic Forum at The Grove in Watford, Binnie discussed how her committee navigates the complex world of pension governance, from implementing new digital dashboards to responding to ESG concerns raised by members and lobby groups.
These are some of the highlights of our interview with her. To see the full interview, click the video below.
Binnie on Communication
When discussing member engagement, the chair’s priorities become clear. “Member engagement and communication for me and the committee is paramount. Communication is paramount in every organisation, especially when it comes to pensions,” she emphasised.
The complexity of pension arrangements makes clear communication essential. “Pensions for members are very complex and I would want all the members to have as much communication and as much information as possible.”
Currently, Falkirk Council maintains a comprehensive website with regularly updated pension information, managed by pension fund employees. Members also receive annual statements and notifications about any changes to their pensions.
However, the chair expressed particular enthusiasm about upcoming technological improvements. “I’m really excited about the pensions dashboards coming online. The first phase in Falkirk Council will be complete by October this year, and that’ll be absolutely brilliant because members out there really want to find out about the pensions.”
Binnie on ESG
The growing focus on environmental, social, and governance (ESG) factors presents both opportunities and challenges for pension funds. The chair acknowledged this evolving landscape while maintaining clarity about priorities.
“Falkirk Council is very good when it comes to these concerns,” she said. “I will say fiduciary is important, that is our first priority, but we can’t ignore any social or environmental concerns that’s happening in the world today. And the pace is getting faster when members of the public are coming to us asking how we are dealing with it, but we do deal with it very responsibly.”
The scheme has established mechanisms to address ESG concerns through third-party engagement. “We have a statement of responsibilities if we’ve got concerns, we employ Hermes EOS, they can go to companies direct and listen to how and where they’re investing, and the amount of money they’re investing. And if it goes against our statement of responsibilities, we can ask them to lobby that company.”
Binnie on Priorities
Looking ahead, the chair emphasised the committee’s scrutiny role while acknowledging that priorities often emerge from the pension fund managers. “When it comes to our priorities. The priorities in a sense actually come from the pension fund managers to the committee, and our role is more to scrutinise.”
However, the committee maintains an active monitoring approach. “However, during the year certain things come up where we go to our finance director and pension fund manager [and raise concerns].”
The chair shared a recent example that illustrates this vigilance in action. “I had one quite recently where a lobby came to me about a certain company, and I thought ‘oh my goodness, does that actually happen there?’ So I sent that on to the finance director and I asked her to send that to Hermes, because that was really important as I was really quite shocked.”
This example demonstrates how the Falkirk Pension Scheme balances its fiduciary responsibilities with broader social and environmental considerations, ensuring that member interests are protected while maintaining ethical investment standards.
Click here to see the full interview
