A PENSION fund has voted to continue to invest in the arms industry because only 42% of its members wanted it to stop.
The Avon Pension Fund, which has 135,000 members in mainly public sector jobs across the former county of Avon, was the first in the country to survey its members on divesting from the aerospace and defence sector.
The fund has been under pressure to divest from companies involved in the arms trade after some members warned their pensions were being used to ‘fund human rights abuses by Israeli forces in Palestine’.
Pro-Palestine campaigners held a demonstration in Keynsham when the pension fund committee debated the issue a year ago.
As the committee met on December 12 in Bath’s Guildhall to vote on the issue, members of the public attached images of children killed and suffering in Gaza to empty seats in the council chamber as they urged the committee to vote to divest.
But councillors said it could be unlawful to do so because there was not enough support from the people whose pensions are in the fund.
The £6 billion pension fund has £18 million invested in 20 companies in the aerospace and defence sector, including some companies that sell weapons to Israel but excluding those which produce “controversial” weapons such as cluster bombs and anti-personnel mines.
The committee’s legal advice said that to make an investment decision for non-financial reasons, it needed to be satisfied of two things: that it would cause no “significant financial risk and financial detriment” and that there was good reason to believe that the scheme members would support the decision. Councillors were told their decision would be “unlawful” if both conditions were not satisfied.
Divesting was estimated to cost just under £1m in additional administration costs on top of the current £30m annual cost of the fund. Although several councillors said this additional cost would not be a “significant” detriment, most councillors agreed there was not enough support among the scheme’s members to legally defend divesting.
The survey carried out in September had found that 74% of the fund were concerned that the products made by these companies may be used to harm civilians. However, only 42% supported divesting, while a slightly higher 47% supported continuing to invest in the sector. 11% were unsure.
Committee member Fi Hance, Green councillor for Redland on Bristol City Council, told the meeting: “I am probably not alone in the room in being deeply disappointed in the result of the survey. But to disregard it simply because I don’t like the outcome, I don’t think is right.”
But John Leach, Liberal Democrat councillor for Walcott on Bath and North East Somerset Council, said he did not have confidence in the survey and would vote to divest.
The committee also heard from five public speakers, including members of the fund, who all urged it to divest.
One speaker told the committee: “At most the results show a membership which is divided, uncertain, and increasingly conscious of ethical implications of defence sector investments.
“The 42% figure is too substantial to dismiss, especially when this group includes a clear majority of women and members under 45. You cannot reasonably conclude that members support the status quo.”
Another speaker held up two images of a young girl in his family who had been killed. One photograph showed her smiling at the camera. The second showed her body wrapped in white fabric.
Urging the committee to divest, he said: “Because something is legal or unlegal, doesn’t make it ethical.”
The committee voted 8-2 to continue investing in the aerospace and defence sector, but it added a clause to note the strength of views expressed by members of the fund and communicate them to Local Pension Partnership Investments (LPPI) to inform the fund’s investment policies. LPPI is a pool of pensions which the Avon Pension Fund is joining as part of government reforms.
Vice chair of the committee George Leach (Liberal Democrat councillor for Keynsham North on Bath and North East Somerset Council) joined John Leach, who is no relation, in voting against.
The two Green councillors on the committee, who were among those that voted to continue investment, said in a statement that they were “bitterly disappointed” by the result of the member survey but that it was not in the gift of the committee to overrule it.
A total of 20,000 randomly selected members of the fund were contacted by email to take part in the survey, with a response rate of 9.5%, which is double the expected response rate for similar surveys.
John Wimperis, Local Democracy Reporting Service
Pictured, protesters outside the pension fund committee meeting in Keynsham in December 2024
Pension fund will not divest from arms
