Apart from our own, the only pension fund investments on which we all have a right to comment are those of our local authority. Its performance will be reflected in the levels of council tax we pay, and this gives us the status of beneficiaries. Not many people will be aware of this, as we tend to think of beneficiaries as only those who are employees or pensioners.

Local authority pension funds can be quite substantial. The largest, is Tameside, valued at £5.3 billion in March 2003. Even the smallest, Orkney, at £45 million is considerably greater than most of the charitable funds we come across.

Getting information

If a Local Authority is unwilling to give details of shareholdings and you do not progress even using the Freedom of Information Act, you can obtain the information by viewing their accounts.

Local Authorities are required to have all their accounts on public display for a short period every year before they are audited. There is no fixed date for this to happen. The financial year ends on March 31st, so they are unlikely to be ready much before May at the earliest, and could be a lot later. As a council-tax payer you are entitled to scrutinise these accounts. You could phone the council offices and ask when the period of public display will be. Try the treasurer’s department for this information, and be prepared have to keep phoning if they cannot give you a date straight away. This information must also be published in local papers.

When the time comes, you need to ask to see the pension fund accounts. Hopefully the reports of the fund managers will be there and you will be able to read the list of investments. If the investments are in code, you should ask for a list of the codes, because you are entitled to be able to understand what you are reading.

If you have difficulties in getting to see details of the pension fund investments:
• Ask to be given in writing, from where they think they get their authority to withhold this information
• Show that you know your request must be passed on to the auditor.

Campaigning for policy change
Remember that the councillors on the investment subcommittee may not be financially sophisticated, but will be very aware of their responsibilities and deeply anxious to avoid falling foul of the law. Send copies of any letters to the leader of the council as well as to your own councillor. If they are not sympathetic look for some others.

Where else can you get support?
Ask for a copy of the pension fund annual report. This will have a list of admitted bodies – organisations that are allowed to participate in the scheme even though they are not local authority employees.

Some of these may be charities that would be happy to join you in campaigning for an ethically managed pension fund. It would be worthwhile telling them to whom they should write if they wish to do so – i.e. the Councillors who are responsible for formulating policy, not the paid officers in the Treasury Department.

Write to the local branch of UNISON. They may have a non-voting place on the pension fund investment committee and be able to speak up for an ethically managed fund. Similarly try your local political parties. They can press their councillors to raise the issue and stimulate debate. A decision to divest is unlikely to be taken without reference to the whole council where a majority of councillors would need to be in favour.

Given the legal constraints on trustees, the council would certainly want to get legal advice. The Chief Executive and most senior legal officers will feel it is their responsibility to point out all the dangers of such a policy and may succeed in scaring the councillors! But if they persist, they will, at some point, need to take expert advice from outside their own staff resources. This is where it is crucial that they go to someone who is an expert in the field.

Some Local Authorities have made a positive first step of investing a small percentage of their pension fund in a portfolio managed according to specified social, environmental or ethical criteria. This is a prudent measure we can suggest for Local Authorities who have not yet taken it. For those that have, we can ask about their plans and criteria for expanding the ethically managed portion.