Shropshire County Pension Fund 'investing millions in firms profiting from genocide in Gaza'

That is what transpired during a lengthy debate at a meeting of Shropshire Council's Pensions Committee on Friday (September 19).

The fund administers the Local Government Pension Scheme (LGPS) for employees of local authorities and other participating employers within Shropshire, which also includes Telford and Wrekin.

It collects contributions, calculates and pays pension benefits to members and their dependants, and invests the fund’s assets to ensure the long-term financial security for its members and employers.

However, data uncovered by the Palestine Solidarity Campaign (PSC) shows £142,458,890 has been invested into companies believed to have been complicit in the genocide.

This includes Northrop Grumman, which reportedly supplies the Israeli Air Force with missile delivery systems for its fighter jets and helicopters; and Honeywell, which allegedly supplies components for bombs, missiles, and drones used against Palestinian civilians including infants and children.

Earlier this month, the PSC issued a notice to all councils in England and Wales overseeing an LGPS fund that they “must take steps to divest from companies enabling and profiting from Israel’s genocide, military occupation and apartheid against Palestinians” and outlined the legal risks of not doing so.

Dr Jamie Russell, a member of the public, spoke at the meeting to ask the committee if the fund plans to divest from companies complicit in genocide, in accordance with international law, if such divestment requires a vote from full council, and what the legal implications would be for the fund and pension committee members if the fund was found to be complicit in genocide.

Peter Chadderton, pensions investment and responsible investment manager, said it is something that “the fund has wrestled with” since the conflict began.

“We took legal opinion back in 2024 through the Scheme Advisory Board (SAB) and that confirmed our position that, provided we were engaging and taking account of the UN practices around these things, it’s our duty to make sure we still look after the benefits of the fund,” said Mr Chadderton.

“Now, what we’ve effectively had from the Palestine Solidarity Campaign is a conflicting legal opinion: something that hasn’t taken any reference to the opinion that was given previously in November 2024.

“It’s something that raises the question as to whether that opinion is correct.

“It doesn’t just impact the Shropshire pension fund, it impacts the whole of the LGPS. We therefore believe, and we are in agreement with SAB, that this position is best handled by central government.

“When the Russia/Ukraine war started, central government were quite clear in terms of what local authority pension funds could invest in and made a clear statement that we could not invest in Russian companies.

“No such guidance has been given by central government in respect of the Israel and Palestine situation. So, at this particular moment in time, we believe that statement we were given in terms of conflict-affected, high-risk areas remains valid.

“We believe all the actions we have taken so far are aligned with the legal advice we have received and there is no risk to the committee.”

'Highly emotive and highly subjective'

Mr Chadderton added that the SAB is still awaiting a response from central government and members are still considering whether or not they need to take additional legal advice on behalf of the LGPS.

“They’ve effectively confirmed that, provided we are following our own responsible investment practices, they don’t see a risk to funds at this particular stage,” he said.

“We will continue to keep the position under review. This is a highly emotive and highly subjective issue and we’ve probably all got slightly different views.

"What we have to remember is, as a Pensions Committee, what we are here to do is to protect the fund and to look after what is effectively the financial reputation of the fund.

“What we will do is be more public about our position. What we intend to do is make that available on our website and make it open and transparent about what the fund’s position is.”

However, Councillor Charles Shackerley-Bennett (Reform UK, Clee), said that the fund is not a “marketable commodity” so the committee doesn’t have to worry too much about its reputation.

“Its job is to simply provide the maximum amount of funds available to paid pensions,” he said.

“I am also concerned about the reference to the guidance from the Government. I would be very interested to learn on what the legal basis is for their guidance because we’re not talking about trading with the enemy here.

“We’re not enemies with Russia, we’re not enemies with Israel or anybody else.

“It seems to me that decisions here should be based on the best financial results of the fund and political issues don’t come into it.

“If the Government chooses to advise us on how we should invest, then there should be some legal basis for that. If there isn’t one, then I don’t think we should be following the Government’s advice on this.”

Mr Chadderton said that the committee hasn’t gone out specifically to individual members and asked what their opinion is.

“Obviously the committee is open to public questions,” he said.

“We have received one today, hence my reasoning for actually thinking we need to be more transparent in our approach so members are aware.

“I think we have to be careful in looking for engagement in what we’re actually promising as a result of it.”

Councillor Gary Groves (Lib Dems, Wem), who was chairing the meeting, said he understood everyone’s point of view.

“I personally think we have to look at the fund and get the best return for the people who are contributing towards it,” he said.