Unison, the trade union for local government workers, has attacked the idea of investment decisions for local government pension funds being made by central government.
The union said that plans to pool the assets of 89 local government pension funds into a handful of much larger funds of around £26 billion should not affect investment decision-making. Investments must be made in the best interests of present and future pensioners, it said. It fears that the plan for national wealth funds, consisting of LGPS assets, will lead to funds being invested in big national infrastructure projects, such as new roads, at the behest of central government.
Unison said that while it is not opposed to LGPS funds working together to invest on a larger scale, it is much less enthusiastic about government direction of investment policies. It believes that union-nominated representatives should be appointed for the new governance structures, to ensure that investment decisions are made in the interests of Unison members.
Unison general secretary, Dave Prentis, commented: “Making pension funds plough their assets into the latest government initiative could very well mean poor returns for workers in the LGPS pension scheme. The local government pension scheme should not be a sovereign wealth fund for the government to spend as it sees fit.” Unison has also requested that the government apply EU investment regulations, which cover all other pension funds in the EU, to LGPS funds.