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Pension funds stay in tobacco industry
8:30am Friday 25th January 2013 in News
A SECOND attempt to get Worcestershire County Council to withdraw £21 million of investments in the tobacco industry has failed – with bosses saying it would be a raw deal for pensioners.
During a fierce debate at County Hall, Liberal Democrat councillor Penelope Morgan said it was time the council looked at it again.
The pension fund, which has £1.5 billion in assets, has £15 million invested in British American Tobacco and £6 million with Imperial Tobacco.
Last September the Labour group asked the council to withdraw the money, calling it “grossly hypocritical” and “immoral”, but it was rejected.
Since then new details have come to light revealing the council’s pension fund, which also accepts employees from a range of other organisations, is among the best performing in the country.
It currently stands ninth out of 104 public sector schemes nationwide, with the value of the assets outstripping the vast majority of its rivals.
Coun Morgan said given the performance of the fund it could afford to take a stand and take out the tobacco cash.
She said: “Given the success of our pension scheme, are we going to finally look again at withdrawing our investments from the tobacco industry?
“We are ninth out of over 100, surely we need to look at this seriously.”
Coun Adrian Hardman, the Conservative leader of the authority, said: “This fund is ultimately not owned by the council, it’s the pensioners’ fund, and they need the best return they can get otherwise the burden will fall on council tax payers.
“My concern is that if you take this line to withdraw funds in something which is a perfectly legal activity, where do you stop?
“Some people will think it contradictory, but I for one don’t.”
He said over the last few years there had been calls to withdraw funds from “pretty much all of the top 100” company investments, including the likes of Tesco, and his stance remained the same.
Coun Hardman is one of four politicians responsible for monitoring the investments in the fund.
The county’s retirement stash has 21,000 people paying into it every year, and accepts members from other councils, the NHS, police, fire service, schools, colleges and scores of other organisations.
It has equity in the likes of BP, Vodafone, HSBC and healthcare company Glaxosmithkline.