Lobbying and protests on investments of local authority funds have intensified, and administering authorities should have a process for officers or elected members to raise concerns when inappropriate behaviour or language are directed against them, the Local Government Pension Scheme Advisory Board has said.

In a statement published on Tuesday, the SAB said while the majority of lobbying and decision-making was done in a respectful and transparent manner, “the Board is aware that LGPS administering authorities (AAs) are dealing with increasing levels and extreme forms of lobbying about how LGPS funds are invested”.  

It said councillors were often unsure as to where to go for support in their councils, adding: “Therefore, there should be a clear and formalised process for raising concerns, either through a specific individual or department, and responsible persons should be assigned who are well equipped and located in the council to provide them with the support they need.”  

Officers, elected members and others have the right to go about their lawful duty of administering the LGPS without abuse, it stressed, adding that where a protest amounts to attempting to intimidate, cause unease or harass those administering the scheme, “then this needs to be taken very seriously and reported to the appropriate authorities”.  

The SAB also reminded pension funds that their decisions should not be driven by political views: “They should not use committee meetings as a forum to rehearse their own political positions or engage in antagonistic debate with other committee members. They must not direct unfair comments or abuse at officers or others invited to attend meetings to present to the Committee.”  

Referring to the Supreme Court’s 2020 judgment on the Palestine Solidarity Campaign case, SAB said “it is not appropriate for political preferences, whether local or national, to take precedence over what is required under the fiduciary duty”.  

It added: “The Supreme Court (in the above case) was clear that administering LGPS funds is not best understood as a 'local government function' or 'part of the machinery of the state', instead Pension Committees operate in a quasi-trustee role.”  

The Supreme Court’s ruling against the government prompted the latter to introduce a bill regulating the economic activities of public bodies last year. The bill ceased its progress when parliament was dissolved in May.  

The discussion about fiduciary duty in the LGPS is resurfacing as the new government seeks to drive domestic investment and further consolidation of the scheme. SAB is considering getting an updated legal opinion from counsel on fiduciary duty. The last opinion was received almost 10 years ago. In 2014, the Law Commission said that “it is likely” that rules similar to those that apply to trust-based schemes will also apply to the LGPS. However, it said “it should be put beyond doubt” that the LGPS must invest in the best interests of members as some legal uncertainty remained.