Agenda and minutes

To receive disclosures of personal interest from Members in accordance with the Code of Conduct

Note:

1.     Members are requested to identify the item number and subject matter that their interest relates to and signify the nature of the personal interest: and

2.   Where Members withdraw from a meeting as a consequence of the disclosure of a prejudicial interest they must notify the Chairman when they leave.

In accordance with the Council’s Code of Conduct, there were no declarations made pertaining to the agenda.

To receive the minutes of the previous meeting of the Pensions Fund Committee held on

“That the press and public be excluded from the meeting under Section 100A(4) of the Local Government Act (as amended) for the following item of business on the grounds that it involves the likely disclosure of the exempt information as defined in paragraph 14 of Part 4 of the Schedule 12A of the Act”.

RESOLVED: That the press and public be excluded from the meeting under Section 100A(4) of the Local Government Act (as amended) for the following item of business (Learning and Development)  on the grounds that it involves the likely disclosure of the exempt information as defined in paragraph 14 of Part 4 of the Schedule 12A of the Act

Responsible Investing -To receive a presentation from BlackRock on low carbon evolution

RESOLVED: members noted the contents of the presentation from Blackrock 

The Director of Finance and Digital Services presented the report to members and set out the key issues being addressed as delegated functions, as specified in the Pension Fund Governance Policy Statement.  He advised members that during the quarter ended 30^th September 2020, the overall value of the Fund increased from £3,905 million to £4,040 million.

He further advised members that the rolling 3 year performance of the Fund was 9.1% positive as compared to a benchmark of 6.2%.  For the last quarter (i.e. quarter 3), the Global Opportunities high alpha equity portfolio, Global Growth high alpha equity portfolio, UK Credit and CBRE property portfolio underperformed their respective benchmarks.  BlackRock passive equity portfolio performed in line with benchmark. He added that Baillie Gifford, the traditional equity portfolio, outperformed their benchmark which drove the overall positive relative performance for the quarter.    

Following the recent actuarial valuation Aon have been engaged as strategic investment advisers to assist in considering the current investment strategy, how the Fund should respond given the improvement in the funding position since the last actuarial valuation, whilst taking into account the Fund’s focus on ESG, including climate change.  

Following agreement at the October 2019 Committee to move the investments of the current mandate with Blackrock to the ACS World Low Carbon Equity Tracker Fund, the transition was due to take place during March 2020.  This transition was delayed due to market volatility and Covid-19.  The transition commenced 24^th November 2020 with a completion target date of 8^th December 2020.    

The Service Director Pensions, Procurement and Transactional Services provided the update in respect of administration.  He advised members that further to the legislative update provided at the October Pension Committee, the HM Treasury regulations on ‘Exit CAP’ payments have since come into force on the 4^th November 2020, limiting the costs of exits to £95k for organisations in scope.  He added that as these regulations currently conflict with the LGPS scheme regulations, changes to the scheme have been proposed by the Ministry of Housing, Communities and Local Government (MHCLG).  The Council acting as scheme Administrator an Employer has responded to this consultation which closed on 9^th November 2020, raising a number of significant concerns with regards to the proposals.

The Service Director Pensions, Procurement and Transactional Services advised that the implementation of benefits during this period of regulatory conflict has led to some confusion.  Local Government Association guidance has been issued to the Fund Employers and Fund Administrators advising of the approach and process of evidencing any wavier that may be supported by the Welsh Government.

The Chairman stated that it was unbelievable that we had been put in this position and government knew that bringing this into place would arise a clash.  The escalation and speed to implement this when local Gov is going above and beyond is not good in terms of timelines.  Full facts and implications were not fully understood.  He added that hopefully the message consistently that  ...  view the full minutes text for item 21.

The Service Director for Performance and Improvement presented the report to members the report and referred them to Appendix 1 of the report.

He advised members that it was still early days and hopefully performance would improve over time.

The Service Director Finance and Digital Services added that global growth and opportunity’s in WPP had positive and negative performance.  He added that with the long term in mind we were now invested in fixed interest, though this would continue to be monitored. 

The Chair referred to the risk category on material breach and asked if this was in line with the auditor’s way of looking at a material breach.  The Service Director responded that this was a request of the pension’s board and that we have a policy where it categorises and colour codes how it constitutes a material breach. 

The Senior Accountant for Pensions and Treasury Management presented the report to members which updated them on the work and progress with regards to the Wales Pension Partnership (WPP) and Joint Governance Committee (JGC)

The last meeting of the JGC was held on the 11^th September 2020 and the Committee were updated on the following:

·         WPP Sub Funds – 4 of the 5 fixed income sub funds have now launched and the ARB will be launching later in the month.  Work has continued with the next tranches of sub funds. 

·         WPP annual Report

·         WPP Governance Manual was now available to members.  

She advised that the next meeting would take place on the 24^th February 2020 and would be used as a training date to review guidelines and processes. The JGC would then formally meet on the 24^th March 2021.  She advised members that a scheme member representative report also went to the last meeting for approval to approve a co-opted pension member to the Committee which now needs to go back in to council for approval. Press releases on this would be available through the website

The Director Finance and Digital Services presented the report to members with regard to the approval process for the Pension Fund Accounts and provided members with the opportunity to discharge their responsibilities in this respect.

He advised members that the Pension Fund was approved on the 25 November 2020 and the outcome of the external audit undertaken by Audit Wales was an unqualified audit opinion. 

To consider any urgent items as the Chairman feels appropriate