Tice said the public sector should have a “relentless focus on buying British”, and that the new proposed fund would pursue the national interest by investing in defence, steel and energy.
He said it was “our patriotic duty to use our energy treasures”, including energy resources in the North Sea.
Unlike state pensions, which are paid out of general taxation, local governments and their workers pay into schemes that guarantee a level of income in retirement, often linked to final or average salaries.
There are nearly 100 of these “defined benefit” local government pension schemes across the UK with more than 7 million members or pensioners and over £400bn in assets.
But Tice said the current schemes were “underperforming hugely”, had “no coordination” and were investing in “woke nonsense”.
Reform plans to bar any new entrants to the current schemes and, like most of the private sector, enrol new employees into defined contribution schemes. In those schemes payout is not guaranteed, but instead depends on contributions made by the employee and employer, and gains (or losses) from market investments.
Tice said the current system could be transformed into “a British sovereign wealth fund… patriotically backing Britain”, that was “akin” to the success of the London stock market.
When this idea was first floated last November, the public sector union Prospect described it as “a baseless attack on public servants” which would “only worsen the current recruitment and retention crisis in our public services, and would plunge the services people rely on into staffing chaos”.
Jon Richards, assistant general secretary of the public service union Unison, said those in charge of Reform were not on the side of working people.
“Forcing council staff on to inferior pensions would leave retired workers poorer and worsen an already severe recruitment crisis for local government,” he said.
Reform officials confirmed these changes were now party policy.