AMs' pension fund invests in fracking, tobacco and Burberry

ITV Wales can reveal Assembly Members' pensions are benefiting from investments in tobacco and gambling companies, along with a firm involved in so-called 'fracking' for shale gas.

The members' scheme is also investing around £90,000 in Burberry - a company which made staff redundant from its factory in Treorchy back in 2007 and saw a strong campaign from a number of AMs to keep the work in Wales.

Members pay into a pension scheme, which also receives contributions from the public purse.

There is no suggestion of any impropriety on the part of AMs, but, campaigners have questioned the wisdom of some of these investments.

Friends of the Earth are demanding the Assembly looks again at where the funds are invested.

I think the National Assembly for Wales needs to look very closely at these investments and decides where it goes in the future. There needs to be a full review and it needs to happen very quickly.

– Gareth Clubb, Friends of the Earth

William Graham AM, Chair of the Trustees of the AMs’ pension scheme, said he was "satisfied" that the Trustees had acted reasonably and in accordance with professional advice.

Here is Mr Graham's statement in full:

The Trustees have discussed the issue of ethical investments on a number of occasions and have sought professional advice in conducting a review of their investment strategy.

The Trustees have a legal duty to act in the best (financial) interests of Scheme beneficiaries, while the Pensions Regulator, the Government body, responsible for regulating work-based pension schemes in the UK has stated that trustees have a ‘fiduciary duty to choose investments that are in the best financial interests of the scheme members – for example, you must not let your ethical or political convictions get in the way of achieving the best returns for the scheme’.

In order to undertake specific stock selection, the Trustees would need to invest in a segregated fund. However, due to the size of the Scheme, it is not in a position currently to invest in non-pooled funds, as the dealing costs and management fees of so doing would be disproportionately high and potentially adversely prejudicing members’ interests.

To improve transparency the Trustees receive regular reports from Baillie Gifford on their Corporate Governance and Socially Responsible Investment policies and how these have been implemented. I am satisfied that the Trustees have acted reasonably and in accordance with professional advice on investment issues.

– William Graham AM, Chair of the Trustees of the AMs’ pension scheme