Motion to extend oversight following proposed LGPS merger rejected

A motion to ensure that elected representatives from local authorities were included in any new board should the Lothian Pension Fund and Falkirk Council Pension Fund merge has been rejected by the East Lothian Council 10 votes to nine.

The motion, proposed by Councillor Shona McIntosh and seconded by Councillor Lee-Anne Menzies, argued that the proposed merger could weaken oversight over the pension fund, with the current pension committees to be replaced by a “company board”.

McIntosh suggested that such a board would not have the same level of elected member, trade union, and employer representation, warning that there is already an “existing democratic deficit” in the Lothian Pension Fund, which means that despite the fund being administered for four local authorities, only one is represented on the pension committee.

In light of this, the motion called for the leader of the council to write to the Lothian Pension Fund Committee, and to the Leaders of Edinburgh and Falkirk councils to express concern at the possibility of any loss of democratic oversight over the local government pension fund, if elected members were to be omitted from the new board.

It also requested that the Council be encouraged to take this opportunity to instead strengthen democratic oversight, by ensuring that any new board contains elected members drawn proportionately from all participating local authorities’ areas, alongside broad representation from trade unions and employers.

At a recent East Lothian Council meeting, Councillor Cher Cassini, backed the motion, highlighting it as an “opportunity to extend the democratic oversight” of the pension fund.

Councillor Lachlan Bruce also supported the motion, stressing that the important thing about the pension fund is ensuring that it delivers pensions regularly and gets good returns on the investments it makes.

“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 to ensure pensions are being invested wisely and the pension funds are employees use are managed correctly," Bruce said.

However, Council Leader, Norman Hampshire, did not support the motion, suggesting that “Councillor McIntosh has got the situation wrong here”, explaining that "anybody on the board is there representing pension holders, not the Council".

He stated: “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 pension funds in the country.”

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

Provost Councillor John McMillan agreed, confirming that he had sought professional advice, which emphasised that this was “not a political issue”, and highlighted the merger as “great progress” that will provide "massive efficiencies" and improvements in risk mitigation.

The motion was rejected nine to 10 in a subsequent vote.

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