A UK government push to persuade local authority pension funds to plough billions of pounds into levelling up projects may conflict with trustees’ duty to secure the best returns for pensioners, one of Britain’s largest town hall schemes has warned.
Gordon Ross, chief investment officer of LGPS Central, told the Financial Times that any required target to invest in projects aimed at regenerating needier areas of the country “may not always align” with schemes’ investment obligations. LGPS Central, which invests on behalf of a pool of eight local authority pension funds in the Midlands, has a combined £55bn of assets.
His comments come as the government prepares to publish its plans for increasing local investment through town hall funds. Ministers have set out plans to tap more than £16bn of cash in local authority pension funds by setting an ambition for these retirement schemes to invest up to 5 per cent of their portfolios in projects that help “level up” poorer areas.