UK - A local government pension scheme (LGPS) in London is calling on other local authority funds to oppose director bonuses at banking group Barclays in protest at lower-than-expected forecast dividends of 2.5p per share.

The £550m (€642m) Croydon Pension Scheme will instruct its five equity fund managers - which collectively manage £300m in assets - to vote against any proposal for directors' remuneration at the bank's AGM in April.

In a letter to be sent out next week, it will urge fellow shareholders in other local authority pension schemes to do the same.

Danny Brierley, a spokesman for Croydon, pointed out that Barclays dividend had fallen over the last few years.

The highest payment since 2005 was made three years ago, when shareholders recieved 22.5p per share. Since then, it has slipped to 1.5p per share in 2010, rebounding to 2.5p this year.

"As we have 140,000 shares, the difference between that and the latest expected dividend of 2.5p adds up to tens of thousands of pounds that are not going into our pension fund," he said.

"When you multiply that across local authorities, that's a lot of money not being paid to pension funds."

He added: "It may not have the profits it did a few years ago but the bank is still in profit. Barclays is a healthy organisation."

The idea of building a consensus across London pension schemes is understood to have come from Dudley Mead, local Conservative councillor in charge of asset management at Croydon.

Mead said in a statement: "The public and businesses generally are getting a raw deal from the banks, and now council pension funds are [too] - at a time when there is enormous pressure on public finances."

This is the first time London local authorities will have formed a bloc vote on a specific issue. A manager at Brent, one of the pension schemes targeted, said:  "It's difficult to say whether it will work. We don't see other pension funds regularly enough to know what issues we have in common. It's difficult to know if there will be a consensus."
Brierley said:  "Realistically, I don't think there's that much chance we'll be able to stop them this time, but joining together will give pension funds more influence in future."

Barclays did not respond to requests at time of publication.