Belfast councillor slates pension body for “investing as much in Israel as in Northern Ireland”

A Belfast councillor has given a scathing critique of the NI local authority pension body for “underperforming” and “investing as much in Israel as in Northern Ireland”.

North Belfast SDLP Councillor Carl Whyte made the remark about the Northern Ireland Local Government Officer’s Superannuation Committee, also known as NILGOSC, at a recent council committee meeting at City Hall in which elected representatives decided to make an independent review of its pension scheme model.

Elected members also instructed City Hall officials to write to NILGOSC to ask the fund not to invest in the Israeli government again. This part of a motion was opposed by the DUP, who said they were “deeply concerned” that the pension fund’s decision to divest from the Israeli government was a result of “political pressure”.

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Councillor Whyte acknowledged that while NILGOSC had recently announced they would be divesting business from Israeli government bonds, he criticised the body for at one point investing in Israeli business as much as it did with Northern Ireland business.

At the November meeting of the council’s Strategic Policy and Resources Committee, Councillor Whyte referred to a previous motion he had tabled. He said: “I submitted a motion after successfully requesting that NILGOSC sell their holdings in Israeli government bonds.

“Since May of this year, I have been in communication with NILGOSC, who are the legally required pension providers for all local government authorities in Northern Ireland, about their investments. (They were) Just general discussions regarding climate change and geopolitical risk.

“It emerged during that discussion that NILGOSC had invested almost the same amount directly in Israel as a whole, ie its stockmarket and equities, as it does in Northern Ireland. That’s around £15 million each. So I requested they sell the Israeli government bond, which they did, but they still have bond holdings in Israel proper, which is up to them.”

He added: “Since then, the fund has produced its annual report. My motion has two requests. Firstly, as a council we should make it clear to our pension provider that they should not be investing in a government that is now led by an indicted war criminal.

“But secondly, and more importantly NILGOSC works as an employer contribution scheme, so when we all retire, there is an amount we are due, councillors and employers, and that amount has to be paid, whether NILGOSC has the money to pay or not.

"The way they work that, is that they impose on the council every year an employer contribution, which they value at 19 percent, which is significantly more than the employer contribution that any of us get on our pension. And that is because they need to cover the eventuality of the fund not performing.

“If you look at NILGOSC’s performance, it is 7.62 percent behind target. You might say to yourself that it is not significant. But this fund is £11 billion in size - so 7.62 percent means it is underperforming by £796.2 million. That is an absolutely staggering amount of money.”

He said: “Anyone who works anywhere else, in the private sector, there will be a pension provider, where the financial director may say, we do not like the performance of this fund, we are going to switch funds. It is a normal procedure, and happens all the time.

“There is no possibility for us to do that. The council is legally required to have its pension with NILGOSC. They have us and ten other councils banked. We have no option and nowhere else to go.”

He said: “NILGOSC has a commitment to invest £50 million in Northern Ireland. They only invested £15 million directly, and the report says they invested 0.39 percent of their total 11 billion is invested here, some of that indirectly by UK funds.”

He called on the council to write to NILGOSC to not invest in the Israeli government in the future, and to bring in an independent expert to review the current model for council pensions, “to see if is working.”

DUP Councillor Sarah Bunting said: “We are happy with the request on secondary issues that Carl has raised. The first part of the motion is null and void - according to an Irish News article on October 10 NILGOSC has confirmed it does not have any shares in the Israeli government, therefore we would be asking a question about something that doesn’t exist any longer.

“(NILGOSC) said the total out of their fund invested was 0.007 percent. But this does raise some concerns - if NILGOSC has divested these funds, due to any form of political pressure, then it goes against their own policies, ratified on September 23 this year, that they do not divest or invest according to political, or members, views.

“I believe it is deeply concerning that NILGOSC has divested these, and it does seem to be due to political pressure. We need clarity from NILGOSC as to why they decided to divest from those shares.”

A DUP amendment to write to NILGOSC to ask if the decision to divest from the Israeli government was political, was unsuccessful, with five votes in favour from the DUP, and 13 votes against from Sinn Féin, Alliance, the SDLP, and the Green Party.

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