UKLFI has written to the Chairs of all the Local Government Pension Scheme (LGPS) Committees in England to correct the inaccuracies and misconceptions that were contained in a letter sent by the Palestine Solidarity Campaign (PSC).
On 13 May 2020 PSC sent a letter to LGPS Committee Chairs, attempting to exploit the recent majority decision of the Supreme Court which held that some of the guidance given by Ministers exceeded their powers.
The PSC letter accused Israel of “grave violations of Palestinian human rights and international law” and asked the pension committees to “act to ensure adequate screening and due diligence procedures are in place to guarantee the scheme is not complicit in Israel’s violations of international law”.
UKLFI’s letter reminds the recipients that
Scheme administrators must act in the best interests of their members, not in the best interests of PSC. PSC is an unregulated company and is not a scheme member.
The PSC letter contains a number of claims regarding the State of Israel that are inaccurate in fact and in law. These claims do not constitute reliable information or independent research and no reasonable scheme administrator or investment manager could reasonably rely on them when making investment decisions.
The decision of the Supreme Court did not change the common law regarding the inclusion of non-financial consideration in the investment management process, which are that non-financial considerations can only be taken into account if this would not involve significant risk of financial detriment, and the scheme administrator must have good reason to think that scheme members would support the decision.