December 11 2013 Latest news:
Norwich South MP Simon Wright says Norfolk County Council should stop Norfolk Pension Fund investing in tobacco companies, now the authority is responsible for public health. Photo: Peter Byrne/PA Wire
Thursday, October 31, 2013
A pension fund for almost 70,000 people in Norfolk must stub out its multi-million investments in tobacco companies, an MP has said.
Norfolk County Council administers the Norfolk Pension Fund, on behalf of more than 130 employers, 26,000 contributing workers and 43,000 pensioners and deferred members.
A review of the fund carried out last year found it had a total exposure to the tobacco sector of £44m.
But with the county council now responsible for promoting good public health in the county, Norwich South MP Simon Wright has said it is time to pull out of investments in tobacco companies.
He has written to Anne Gibson, the council’s acting managing director, asking that the authority use its influence to stop such investments.
He said: “Through its support for the Stoptober campaign, Norfolk County Council has been encouraging others to give up smoking. But we also need pension fund managers in the county to kick their habit of investing in tobacco.
“It surely cannot be right that on the one hand, Norfolk County Council is responsible for promoting good public health, while on the other its pension fund managers are investing in the tobacco trade.
“The council must stop sending the wrong message on tobacco and cease its investment in these firms. Only then can the council argue that it is focused clearly on tackling poor health related to smoking.”
Administration of the fund is overseen by a pension committee, which is charged with overseeing strategies to obtain the best return on investment for members and employers while maintaining an appropriate level of investment risk.
It has assets of more than £2bn and the fund managers have the discretion to buy shares in any companies quoted on the markets in which the fund invests.
A Norfolk county council spokeswoman said: “We appreciate that people, for a variety of reasons, may have concerns about certain aspects of some companies such as tobacco.
“However, to instruct our investment managers not to invest in large global companies may potentially limit the return of the fund.
“Any change in investment policy would be a matter for the pension committee, but their decisions would have to be compatible with the fiduciary duties placed upon them to ensure that the fund is properly managed to protect the interests of employers, members and ultimately the tax payer.
“Nevertheless the pension committee recognises the apparent conflict between the county council’s public health duties and the fund managers’ investment decisions and has raised the issue nationally but no further guidance has yet been given.”
But Mr Wright, a lead sponsor of a parliamentary motion calling on local authority pension fund managers to review their tobacco investments, said other councils had ditched tobacco investments.
He said: “Councils such as Newham and Brent have withdrawn their investments in tobacco. Norfolk should follow suit. There is no statutory reason for pension funds to invest in tobacco.
“While tobacco may have traditionally been considered a ‘safe’ investment, if councils are doing their job in promoting good public health, then the value of their investments will decline.
“Instead, the council’s pension committee should inject an ethical dimension to their investments. Rather than backing big tobacco businesses, instead investments should focus on the well-being of Norfolk.”