The Avon Pension Fund Committee has voted to remain invested in aerospace and defence holdings, despite its recent survey revealing mixed views on whether the £6bn Local Government Pension Scheme (LGPS) fund should continue investing in this field.

In a public meeting in Bath, the Avon Fund Pension Committee voted to maintain its current approach to investing in aerospace and defence, with committee members voting eight to two in favour of confirming its ‘in principle’ decision, taken in March 2025.

The committee noted the strength of the views expressed by fund members and agreed to communicate them to its new investment pool, Local Pension Partnership Investments, to inform their investment policies.

Indeed, the fund's recent survey of members found that many were divided on this issue, as while 47 per cent of respondents said the fund should continue investing in aerospace and defence companies, 42 per cent believed such investments should cease.

The fund opted to gather member views on aerospace and defence holdings after receiving multiple petitions calling on it to divest from companies supplying Israel, triggered by concern about the conflict in Gaza and wider occupied territories.

However, the committee decided not to focus specifically on Israel, instead suggesting that it could compliantly address the issue by deciding whether the fund should continue investing in the aerospace and defence sector.

The committee took the ‘in principle’ decision in March 2025 to remain invested, subject to seeking an assessment of member views through a survey alongside further consideration of the legal position.

The fund also noted that the UK government has published its Fit for the Future proposals, which shift key investment accountabilities from LGPS funds to their investment pools.
 
The committee's legal advice suggested that any decision to exclude investment in aerospace and defence around non-financial factors would need to not involve a significant risk of financial detriment to the fund, and that there is a good reason to think that scheme members would support the decision.

After the meeting, Councillor and Avon Pension Fund Committee chair, Toby Simon, said:
“Committee members recognised that this is a difficult and sensitive issue, which is why the committee sought member views through a survey, sought further legal advice, and has taken its time to reach a decision.

"Committee members showed their empathy with the many different and sometimes strongly-held views of stakeholders.

“The committee has met and decided its approach, which is to remain invested in the aerospace and defence sector.

"We recognise that some stakeholders will be disappointed with this decision, but the committee believes it is the right decision given the further work undertaken.

"We note the strength of stakeholder views and agree to communicate them to our new investment pool, Local Pension Partnership Investments, which we will join in April, to inform their investment policies.

“The fund takes all member views seriously and, in reaching a decision, the committee has balanced those views with its wider fiduciary duty, legal advice, financial considerations, and the wider regulatory context with the evolution of pooling.

"The committee is grateful for the time taken by members to respond to the survey and for wider input received from stakeholders.”

  

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