The Avon Pension Fund, one of the UK’s significant pension schemes with 135,000 members primarily in public sector roles across the former county of Avon, has voted to maintain its investments in the arms industry. This decision comes despite a strong ethical debate and pressure from members calling for divestment from aerospace and defence companies.
In a landmark approach, the Avon Pension Fund was the first in the country to conduct a formal survey among its members about divesting from the aerospace and defence sector. The fund holds about £18 million invested in 20 companies within this industry, including firms that sell weapons to Israel, though it excludes those involved with controversial arms like cluster bombs and anti-personnel mines.
The issue has intensified amid allegations that pension investments could be linked to human rights abuses by Israeli forces in Palestine. On December 12, during the committee meeting held at Bath’s Guildhall, public advocates attached poignant images of children killed in Gaza to empty council seats, urging divestment.
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However, councillors raised legal concerns, highlighting that without sufficient member support, the decision to divest could be considered unlawful. The fund’s legal advisors outlined two critical conditions for making investment decisions based on non-financial grounds: assurance that the decision would not pose significant financial risk or detriment, and reasonable confidence that the majority of scheme members would support the move.
The survey indicated a divided membership. While 74% expressed concern that products from these companies could be used to harm civilians, only 42% favored divestment, while 47% preferred to continue investing in the sector, and 11% were undecided. Additionally, divestment was projected to cost nearly £1 million in extra administrative expenses beyond the current £30 million annual fund costs.
During the meeting, Green Party councillor Fi Hance expressed disappointment in the survey outcome but emphasized the importance of respecting the legal framework. “I personally do not support investment in the arms industry,” she said, “but politicians must uphold the law even if the outcome is unfavorable.” In contrast, Liberal Democrat councillor John Leach criticized the survey’s impartiality and voted in favor of divestment.
Public speakers passionately appealed for change, highlighting the ethical and emotional weight of the issue. One speaker, displaying poignant images of a young family member killed, reminded the committee, “Because something is legal or illegal, doesn’t make it ethical.” Another emphasized that the membership appeared divided but increasingly aware of the moral implications of such investments.
Ultimately, the committee voted 8-2 to continue investments in the aerospace and defence sector. However, they appended a clause recognizing the strength of members’ views and committed to conveying these perspectives to the Local Pension Partnership Investments (LPPI), a new pension pool Avon Pension Fund is joining as part of government reforms.
Vice-chair George Leach and councillor John Leach cast the dissenting votes. The two Green Party councillors who voted to maintain investments expressed their profound disappointment with the survey results but acknowledged the committee’s legal limitations. Councillor Joanna Wright underscored the conflict between ethical views and legal thresholds, noting the necessity of respecting the survey’s legal implications.
Fi Hance reflected on member reactions, stating, “Many scheme members are horrified their pensions are invested in the aerospace and defence industry. We are dismayed not to achieve the change we hoped for but remain grateful to campaigners for their dedication and respectful engagement.”
Committee chair Toby Simon affirmed the complexity of the decision, emphasizing thorough consultation, legal advice, and due consideration of all stakeholder views. “While we recognize some disappointment, the committee believes its decision balances fiduciary duty, member opinions, and legal and financial realities,” he explained. He also committed to ensuring that members' concerns will influence the investment strategies of LPPI in the future.
The survey reached 20,000 randomly selected fund members by email, achieving a 9.5% response rate — double the norm for such surveys. Responses were statistically weighted to accurately represent the fund’s membership demographics, ensuring a robust analysis despite the modest response level.