Scottish Parliamentary Pension Scheme (Investment Strategy and Principles)

– in the Scottish Parliament on 8th March 2018.

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Photo of John Finnie John Finnie Green

3. To ask the Scottish Parliamentary Corporate Body what discussions it has had with the fund trustees regarding updating the Scottish parliamentary pension scheme’s investment strategy and statement of investment principles, and how it will ensure that the scheme’s members are consulted about this. (S5O-01876)

Photo of Sandra White Sandra White Scottish National Party

I thank John Finnie for his question and note his tenacity on the subject.

The Scottish Parliamentary Corporate Body discussed engaging with the fund trustees about the scheme’s investment strategy at its most recent meeting, on 22 February. It was agreed that a series of meetings involving the SPCB and the fund trustees should be arranged, commencing in March, to discuss and exchange views on the scheme’s investment strategy.

It is standard practice for the fund trustees to review the scheme’s statement of investment principles at least every three years and to update the SPCB on a revised statement. Under schedule 1, part B, rule 5 of the Scottish Parliamentary Pensions Act 2009, the fund trustees are responsible for the governance, management and administration of the scheme, and for the management of the scheme’s assets, including decisions about setting the scheme’s investment strategy.

Photo of John Finnie John Finnie Green

I thank the member for her detailed response. A number of people have a long-standing interest in the issue, and it is important to say that we are in charge of the strategy, not the people whom we engage to operate the fund, although that impression has sometimes been given in the past.

I wonder whether the member is aware of research, which I am happy to share, that shows that 72 per cent of people think that our MSP pension fund should not be able to invest in companies that are involved in arms manufacture, fossil fuel extraction and tobacco.

Indeed, in December the UK Government said:

“government supports the ... view that trustees should consider members’ ethical and other concerns, and may respond by acting on them where they have good reason to think members share the concern and it does not involve a risk of significant financial detriment.”

The best way for trustees to know what fund members’ ethical concerns are would be to consult them. That would involve consultation only with current and previous MSPs—not a massive group of people or a massive expense. Given that the pension fund’s investment strategy and statement of investment principles are under three-yearly active review, as the member said, will the SPCB write to pension trustees in support of a consultation on potential divestment from arms manufacture, fossil fuel extraction and tobacco?

Photo of Sandra White Sandra White Scottish National Party

We will certainly be happy to look at work that has been done.

As I said, the SPCB will be meeting the fund trustees. I am sure that the consultation that John Finnie proposes will be part and parcel of our discussions.

Mr Finnie will be aware that the trustees are representatives of all the political parties, including his. It is not for me to suggest who he might want to speak to, but perhaps he—and any other member who feels as strongly as he does—could speak to the member of their party who is represented on the board of trustees.

I will be happy to take forward suggestions and requests for further information from the member.

Photo of Jamie Halcro Johnston Jamie Halcro Johnston Conservative

Will the Scottish Parliamentary Corporate Body seek clarity from the fund trustees that the existing investment strategy is consistent with market standards?

Photo of Sandra White Sandra White Scottish National Party

I thank the member for that question. I know that he has an interest in the area, and in the council area also. Certainly, we can take that forward at the next meeting of the SPCB, along with the trustees as well.

The Deputy Presiding Officer:

That concludes questions to the Scottish Parliamentary Corporate Body. I will allow a couple of moments for members to change seats.