The local government pension fund for Tayside is selling off its shares in Russia’s biggest bank in the wake of the war in Ukraine.
Dundee City Council, which administers the pension pot, told The Courier its managers were “currently in the process of sale”.
But the authority would not reveal the extent of the Tayside fund’s likely losses from the collapse in the value of shares in Sberbank, which were worth £3.4 million in 2020.
The Highland local government pension fund has confirmed its investments in Russia-based businesses, including Sberbank, stood at just £176,000 last week, down from more than £5.5m last year.
Sberbank, which is Russia’s biggest lender and is majority owned by Vladimir Putin’s government, has been hit with crippling sanctions in the wake of the Ukraine invasion.
We previously reported that the Tayside fund was reviewing its holdings, amid widespread calls to disinvest in Russia-linked businesses.
‘Currently in the process of sale’
On Monday, a Dundee City Council spokeswoman said: “The shares in Sberbank that Tayside Pension Fund holds through one of its appointed managers are currently in the process of sale, therefore we are not in a position to provide further details.”
The Local Government Pension Scheme in Scotland holds assets worth more than £45 billion.
It serves more than 236,000 active members, more than 140,000 deferred members and more than 169,000 pensioners and dependents.
Employers participating in the Tayside Pension Fund include Angus Council, Dundee City Council, Dundee & Angus College, Perth & Kinross Council, Perth College UHI, as well as non-uniformed Police Scotland and Scottish Fire & Rescue Service staff.
The Fife local government pension fund is not believed to have had holdings in Sberbank.
Elaine Muir, head of finance at Fife Council, said it was highly diversified.
She added: “Given the volatility of world markets at this time, the pensions committee supported by investment advisers and fund managers will keep the fund’s investment strategy under constant review.
“An initial review has indicated that there is unlikely that the fund has any direct exposure to any Russian equities or stock.
“Fund managers who are monitoring the situation will be expected to take any necessary action in relation to UK/international sanctions.”
Should you be worried about your pension?
Barry O’Neill, investment director for Carbon Financial Partners, said people with pensions linked to these local government funds did not need to worry.
“Pension fund valuations change from day to day, depending upon the risks in the different markets they have money invested in,” he said.
“Any exposure to Russia should be relatively limited, but you know, any such exposure will have taken a pounding valuation-wise over the last week, that’s for sure.
“But it should be a very small part of the overall asset valuation, and most other developed world markets have actually held up reasonably well in the last seven days or so.”
