The Local Government Pension Scheme (LGPS) is a very different public sector pension scheme to other schemes, in that it takes in employee contributions and employer contributions and invests these to make returns, with all three sources of income then funding the pensions of retired members.
The teachers’ pension scheme, for example, only has employee contributions and employer contributions and central government pays out pensions to retired teachers thereafter out of general taxation.
The LGPS across the country is split into individual funds, and UNISON West Sussex members are, unsurprisingly, members of the West Sussex LGPS Fund.
Key facts
The West Sussex LGPS has 95,000 members, made up of active contributors who are in work, retired members, and ‘deferred’ members who contributed at one or more points in their careers but are not yet taking a pension.
There are 250 active employers in the scheme, ranging from West Sussex County Council to Chichester College Group to Multi Academy Trusts.
Because the West Sussex LGPS invests its employee and employer contributions, it now has reached a point where it holds a staggering £6 billion in investments on behalf of its 95,000 members. This £6 billion is your deferred wages.
How to invest £6 billion?
The core aim of the West Sussex LGPS is to invest your deferred wages in ways that provide a profitable return, so the pension income you are guaranteed through the scheme can always be paid without having to ask for higher contributions. But how that £6 billion is invested matters because investing a sum as large as £6 billion can have huge social, economic and environmental impacts.
The West Sussex LGPS fund must therefore, by law, produce an ‘Investment Strategy Statement’. This must set out the social, environmental or corporate governance considerations which are taken into account in the selection and disposal of investments. This year, your LGPS Fund is refreshing its Investment Strategy and to this end is surveying West Sussex members for your views on what types of investments it should make on your behalf.
For example, should the Fund invest in:
- Companies which profit from oil and gas i.e. fossil fuels, which impact on climate change and the environment
- Companies which profit from industries which can have anti-social impacts on communities, such as gambling
- Companies which profit from products that are known to be harmful to health, such as tobacco
- Companies which profit from armaments and weapons, which can often impact on innocent civilians and children in conflict areas and sometimes can be wholly insidious in their design, such as landmines and phosphorus bombs
- Companies which profit from operations in conflict-affected regions of the world where there are profound concerns about systematic violations of human rights and international law.
The £6 billion in funds in the West Sussex LGPS is not their money. It is yours. It only exists because of the deferred wages of workers, like you, saving for your retirement, through a beneficial pension scheme negotiated at a national level by your trade union, UNISON.
Who are LGPS scheme members?
That’s us! Public service workers who educate, protect, rescue, care, nurture, nourish and plan for the residents who use our services. Sometimes the people who use the services we provide are the most vulnerable adults and children in our communities.
If we spend a working lifetime caring, educating and protecting, why would we tolerate having our deferred wages being used to do the opposite? Ruining health, killing innocents, oppressing populations, undermining our communities, destroying our environment.
The Investment Strategy survey is your chance to have your say.
UNISON is urging all its members to take part.
It’s important there is a high turnout in the survey. Please tell your work colleagues.
The survey is long and important in all its areas, but it is not compulsory to answer all questions in order to be able to submit a response.
Even if you are not able to complete all of the survey, please ensure you complete the fifth section, titled Responsible Investment, which is questions 15 to 20.
We are recommending the following answers, which are in line with UNISON’s democratically established policies and priorities, as determined at its annual conference.
Go to Recommendations on questions 15 to 20
Next steps
The survey closes on 5th July. The West Sussex Pension Committee will then meet on 29th July to consider the results of the survey and to agree its Investment Strategy.
UNISON Branch Secretary, Dan Sartin, is one member of the Pension Committee, but the majority of its members are elected County Councillors.
If you have any questions, get in touch!