The statutory body that oversees the Local Government Pension Scheme has requested an urgent meeting with the local government minister to discuss the legal position of council pension funds amid the conflict in Gaza.
Council pensions funds, also referred to as administering authorities (AAs), have come under pressure from pro-Palestinian campaigners to divest from companies linked to the conflict.
Groups such as the Palestine Solidarity Campaign have questioned the legal duties of the LGPS in matters of international human rights law.
Last October the LGPS Advisory Board wrote to then local government minister Alison McGovern asking her to “advise the view of the UK government when a specific legal liability may arise through holding conflict-related investments in a particular scenario”.
This week the advisory board said in a statement: “The earlier reply from the previous minister simply did not address the key point about whether the government accepts the legal arguments about the AA function being sufficiently connected to the state to require it to have regard to international human rights law duties engaged by the ongoing conflict in Gaza.”
Advisory board chair Roger Phillips (Con) and George Georgiou, GMB national pensions organiser and advisory board vice-chair, said the board had therefore written to new local government minister Jim McMahon “to seek an urgent meeting on this question”.
The statement added: “The board is in no doubt that AAs are endeavouring to follow the law, their responsible investment beliefs and their fiduciary duty. However, the board is concerned that individual funds may be expected to shoulder significant legal, financial and reputational risk arising from uncertainty over the legal position.
“It is unreasonable to expect individual AAs to navigate a novel and contested legal question without greater certainty as to the basis on which those judgments are expected to be made.”
The SAB went on to say that AAs were entitled to understand the government’s position when it came to the legal question of these investments, so they could make their own decisions with a clear understanding of the legal context surrounding them.
LGC has contacted the Ministry of Housing, Communities & Local Government for comment.