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Bid to have 'seat at the table' of pension fund is defeated

CALLS for East Lothian Council to have a “seat at the table” of its employees’ pension fund have been narrowly rejected despite claims there was a “democratic deficit”.

Lothian Pension Fund (LPF) is currently considering a merger with Falkirk Council’s Pension Fund which would create a combined 115,000 members and assets of £11.3billion.

At a meeting of East Lothian Council this week, Scottish Greens Councillor Shona McIntosh raised concerns that despite LPF representing the retirement pots for workers at four councils – West Lothian, Midlothian, East Lothian and Edinburgh – only Edinburgh City Council members will take an active part in the vote alongside Falkirk colleagues.

She told councillors the local authority had invested £19 million in its staff pensions fund last year with no say over how it is invested.

In a motion to councillors, she called on council leader Councillor Norman Hampshire to write to LPF pension committee and leaders of Edinburgh and Falkirk Council “expressing concern at the possibility of any loss of democratic oversight over the local government pension fund for our area”.

And it asked Mr Hampshire to urge them to take the opportunity to “strengthen democratic oversight, by ensuring that any new board has broad representation from trade unions and employers, and also contains elected members drawn proportionately from all participating local authority areas.”

However, at the meeting, Mr Hampshire said Councillor McIntosh had misunderstood the role of the LPF board describing her motion as “irrelevant”.

He said: “I think Councillor McIntosh has got the situation wrong here, anyone that is represented on the pension board is on the board representing the 79,000 members of the pension fund.

“They are not there as an elected representative they are there purely to take decisions in the best interest of the pension members.

“It is regulated quite strictly by the FCA and Edinburgh pension  fund, or Lothian pension fund run by Edinburgh is seen as one of the best in the country.

“This motion is not relevant because it does not meet what the pension fund is about and I cannot support it.”

His position was backed by Provost John McMillan who said he had spoken to someone who had been involved in the fund and believed the merger would be a good thing.

LPF announced it was consider the merger in May this year.

Councillor Cher Cassini told the virtual council meeting she supported the motion to have more ‘democratic oversight’ of the fund adding: “Having worked in the pension industry I always felt the ones that were more accountable to the people whose pensions they were dealing with were better run, better performing and to me there is a good point about finding out more information.”

Councillor Lachlan Bruce, Conservative group leader, also backed the motion.

He said: “I think there is a point from Councillor McIntosh’s motion about democratic oversight and that changes are being made and as an employer we do have a responsibility toe ensure pensions are being invested wisely and managed wisely.”

The council voted by 10 to nine to reject the motion.