Pension bosses attack Rachel Reeves’ megafund plans over fears of government ‘cash grab’

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. Read our privacy policy Pension bosses have attacked Reeves’s plan to merge local authority pension funds and get them to invest in projects like housing, fearing the government is trying to grab their cash after years of prudent investing. open image in gallery Local authority pension funds have been able to invest in US shares which have grown in leaps in the last decade He credits much of the fund’s success to being able to pick active funds, which select companies its executives think will grow quickly and buy shares in them. Ms Reeves said in a recent speech that merging the funds “could unlock around £80 billion for investment in private equity, including exciting growth businesses and in vital infrastructure projects including transport, energy and housing projects here in the UK.” open image in gallery Investing in new homes is low-return and not what pension funds are for, bosses have said Cllr Thompson said: “persuading pension funds to invest in housing, I think, is just a non-starter” because of few builders and local services to construct and support them. open image in gallery The UK is borrowing more than the government would like - pension funds offer ready investment He has a duty to get the best returns for his pensioner members, who work for the council, “and I don’t think that there’s any evidence that us investing in local infrastructure will enhance those returns in any shape or form,” John Gray, chair of Newham Council’s £1.7bn pension fund and a Labour councillor, says he is also wary of housing investments, since the return will be lower than investing in shares.