Government should not gamble with pension funds, Unison cautions

Unison has warned that the government should not risk investing local government pension funds on government projects.

It argued that pension money authority should instead lie with local authorities. Currently the government is planning to pool the 89 funds which make up the Local Government Pension Scheme (LGPS) and invest the funding in infrastructure projects.

However, Unison has questioned the role of ministers in making such investment decisions and the notion of subsidising government projects. Instead, Unison proposes that union-nominated representatives should be appointed to be responsible for pension funds to ensure ‘that any investment works for the millions of teaching assistants, refuse collectors, homecare workers and other town hall workers whose pensions are held by the scheme’.

Dave Prentis, Unison general secretary, said: “Pension funds are supposed to invest for the benefit of fund members, and should not be used as a substitute for investment that should be coming from the public purse.

“Making pension funds plough their assets into the latest government initiative could very well mean poor returns for workers in the LGPS pension scheme. Funds should not have to risk gambling away their members’ retirement incomes by subsidising an infrastructure project that should be funded from government coffers or by the private sector.

"The local government pension scheme should not be a sovereign wealth fund for the government to spend as it sees fit.’