The fund administers the Local Government Pension Scheme (LGPS) to employees of local authorities and other participating employers within Shropshire, which also includes Telford and Wrekin.
It collects contributions, calculates and pays pension benefits to members and their dependants, and invests the fund’s assets to ensure “long-term financial security” for its members and employers.
However, data uncovered by the Palestine Solidarity Campaign (PSC) showed that £142,458,890 has been invested into companies believed to have been complicit in the genocide being carried out by Israel.
This includes Northrop Grumman, which reportedly supplies the Israeli Air Force with missile delivery systems for its fighter jets and helicopters; and Honeywell, which allegedly supplies components for bombs, missiles, and drones used against Palestinian civilians including infants and children.
In September, the PSC issued a letter to all councils in England and Wales overseeing an LGPS fund that they “must take steps to divest from companies enabling and profiting from Israel’s genocide, military occupation and apartheid against Palestinians” and outlined the legal risks of not doing so.
The issue was raised at meetings held by the Pensions Committee in September and December, with protests taking place outside the Guildhall in Shrewsbury.
Peter Chadderton, pensions investment and responsible investment manager, said it is something that “the fund has wrestled with” since the conflict began. He added that legal advice was sought through the Scheme Advisory Board (SAB), which confirmed that, provided the fund was “engaging with and taking account of the UN practices”, it was its duty to ensure it protected the benefits of the fund.
A corporate governance monitoring report also showed that the majority of companies identified by the PSC as supporting Israel are multinationals that operate globally, such as Amazon, HSBC, Mitsbubishi, Barclays, and McDonalds. It said the fund does have direct exposure to some Israeli companies through its pooled passive investment companies with Legal & General Investment Management Limited.
This is in the form of Israeli banks and IT companies and totalled around £5.5m as of June 30. Campaigners were again at the Guildhall on Friday (January 23) for a Pensions Board meeting.
Jamie Russell asked if the board was comfortable “with the refusal to actively engage with employers and members on this important issue”, noting that several other local pension schemes have decided to divest.
Head of pensions, Justin Bridges reiterated what Mr Chadderton said, namely that the fund has referred the matter to SAB, as its legal opinion is contradictory to that of the PSC’s.
“Once this guidance has been referred, a further update will be presented to the Pensions Committee and Board,” said Mr Bridges.
“Investment decisions are delegated to specialist investment managers. Scheme members or employers do not make investment decisions on behalf of the fund.”
Fellow campaigner, Joanna Blackman also asked if members were content with a statement that was sent to the Pensions Commttee saying that, while recognising the hardship for people living in conflict-affected and high-risk areas, the fund believes that the effective stewardship of assets,provides the best long-term outcomes for stakeholders and society.
Mr Bridges said it had been sent to the Pensions Committee, and while it has not specifically come to the Board, it is aware of it.