“The local government pension scheme should not be a sovereign wealth fund for the government to spend as it sees fit,” said Prentis.Chancellor of the Exchequer George Osborne has repeatedly referred to the new pooled arrangements as British wealth funds.The trade union notes that it has argued that the LGPS should invest in line with European law, just like other pension funds, and should not be singled out for special intervention.As part of a planned structural reform of the LGPS, the Department for Communities and Local Government (DCLG) has proposed deregulating their investment.It is looking to remove the current statutory investment rules, which set out upper limits on certain types of investments – including infrastructure – and to replace this with a requirement that funds publish an investment strategy statement. This would allow investments as long as they are prudent.As part of its consultation on the reform, the DCLG urged local authority funds to “explain” how infrastructure would feature within the new pooling arrangements, as well as how pooling could improve their ability to invest in the asset class.The proposed new regulation also gives the UK government the right to intervene in the investment function of a fund’s administering authority in certain cases, such as when it is “carrying out another pension-related function poorly”.This authority to grant the secretary of state the right to direct investments been described as “unprecedented” by some observers. The DCLG is consulting on its proposed new framework, with a deadline of 19 February for responses.Unison has for some time argued that the LGPS should invest in line with European law.Together with the LGPS Scheme Advisory Board for England and Wales and the Law Commission, the trade union has therefore requested that the government apply the investment regulations applicable to all other pension funds. Union-nominated representatives should be appointed to the proposed UK local government pension schemes’ (LGPS) asset pools, according to Unison, which sees a risk of the government’s “dictating” the funds’ investment decisions. The trade union said it was not against the pooling of LGPS funds to make them large enough to invest in big infrastructure projects, but it “is much less enthusiastic about the government being able to direct where scheme members’ money is invested”.Unison general secretary Dave Prentis said pension funds “should not be used as a substitute” for investment that should be made by the government or the private sector.He referred to pension funds being “made to plough their assets into the latest government initiative” and said this could hurt LGPS returns.