Debate in the House the Local Government Pension Scheme Investment Regulations
5 million people rely on the LGPS to pay their pensions. Government wants powers over LGPS investment funds, but they could gamble away members’ money on infrastructure projects. This is not allowed in any other UK scheme, including the MPs'. The LGPS must be invested in members’ best interests.
Parliament must debate this issue and make the government accountable for these powers of intervention as any such direction may breach the law. Specifically Article 18 paragraph 3 of the EU Directive 41/2003 Institutions for Occupational Retire Provision: “Member States shall not require institutions located in their territory to invest in particular categories of assets.”
Government responseLGPS investment decisions will remain matters for local authorities, but councils should compare their investments in infrastructure against the example set by leading global pension fund investors.
Councils must invest local government pension scheme funds in the best interests of scheme members.
The Government has no intention of setting targets for infrastructure investment or removing the right of individual pension fund authorities to make their own decisions about strategic asset allocation. However, the pooling scheme assets announced at the July 2015 Budget will improve their capacity to invest in infrastructure, as well as achieving significant cost savings, while maintaining returns.
We have recently consulted on proposals to grant the Secretary of State a power of intervention which would further protect members’ and taxpayers’ interests. We expect that the power to intervene would be used exceptionally when there was clear evidence that a pension fund authority was not acting reasonably and lawfully, The Government is currently considering the responses to the consultation.
Department for Communities and Local Government
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Currently ranked 70 out of 101,126 petitions ever created.
Colin David Meech
Friday 25 March 2016
Saturday 24 September 2016