Agenda and minutes

Apologies for absence were received from County Borough Councillor M Ashford and G Jones.

The Chair welcomed County Borough Councillor N Morgan to his first meeting of the Pension Fund Committee.

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 Pension Fund Committee held on 28 October 2022

It was RESOLVED to approve the minutes of the 28^th October 2022  as an accurate reflection of the meeting.

“That the press and public be excluded from the meeting under Section

100A(4) of the Local Government Act (as amended) for the following

agenda items of business - Items 4 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 1972 for the next item of business on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 12 of Part 4 of Schedule 12A of the Act.

Through the aid of a PowerPoint presentation, representatives from Baillie Gifford provided Members with an overview of their environmental, social and governance aims and principles. After a detailed discussion in respect of the presentation, the Committee RESOLVED:

      I.         To note the contents of the presentation.

The Director of Finance and Digital Services provided Members with the key issues being addressed as delegated functions, as specified in the Pension Fund Governance Policy Statement.

The Director reminded Members of the exception quarterly reporting cycle for pension fund investment performance and reference that during the quarter ending the 30^th September 2022, the overall value of the Fund decreased from £4,108 million to £3,995 million.

The Committee were advised that the rolling 3-year performance of the Fund was 2.8% positive as compared to benchmark of 2.4% and during quarter 3 Global Opportunities high alpha equity portfolio, BlackRock Passive UK Equity (low carbon), Baillie Gifford traditional equity portfolio and UK Credit outperformed their benchmarks.

Members were referred to the table set within 4.7 of the report which provided detail of the revised asset allocation strategy together with the current allocation. In respect of infrastructure, the approach was for the Fund to invest over a number of years in order to secure and optimise opportunities across the different time periods (and vintage years).

The Service Director, Pensions, Procurement & Transactional Services provided the Committee with an administration update which included details of the RCT Pension Board Annual Report, current consultation on the Funds governance documents and details on the Employer Cost Cap and Specified Restricted Scheme.

Reference was made to the use of biometrics technology to provide assurance on the details / status of Members that live abroad with the life certification exercise.

It was advised that the service’s performance and service volumes remain positive, with a focus on team development and recruitment. The report was concluded with details of the most recent Pension Board meeting.

A Member queried the fluctuation of the Fund from £4.1M to £3.9m. The Director commented on market volatility and assured Members that this would continue to be monitored.

Members discussed the advantages of a future briefing session with Officers on the investment performance including details on the Wales Pension Partnership.

Following discussions, it was RESOLVED:

      I.         To note the issues addressed within the report

    II.         To take forward a future briefing session with Officers.

The Service Director, Finance & Improvement Services provided Members with an overview of the arrangements in place to manage risk within the Pension Fund. 

The Service Director advised Members that the Fund maintains a Risk Register which is reviewed and updated on a quarterly basis and referred Members to the Risk Register attached at Appendix 1 for their consideration. Members were informed that there had been no impact or changes to the register and that there were in total 38 risks identified .

One Member commented on the inflation uplift and whether this had caused a pressure in respect of cashflow.   The Director responded by advising of several marketing engagement sessions and evaluations that were undertaken, which Members would be kept appraised of.

A further query was noted in respect of the 1 high risk identified within the risk register and the Service Director provided detail of the control measures in place to mitigate the risks identified.

Following discussions it was RESOLVED:

      I.         To note the arrangements in place for the management of risk within the Fund.

The Director of Finance and Digital Services presented Members with the Pension Fund Statement of Accounts (2021/22) and advised of the role and responsibilities of the Committee with regard to the approval process for the Accounts.

He advised members that the Pension Fund accounts were approved by full Council on the 23rd November 2022 and the outcome of the external audit undertaken by Audit Wales was an unqualified audit opinion.

Members commented that it was a positive report and RESOLVED:

      I.         To note the audited financial statements of the Pension Fund for the financial year 2021/22.

The Senior Accountant, Pensions and Treasury Management provided the Committee with an update on the work and progress of the Wales Pension Partnership (WPP) and Joint Governance Committee (JGC).  Members were advised of the content of discussions at the most recent meeting of the JGC which included developing areas and priorities going forward such as Development of the Private Markets Sub-Funds and Operator contract procurement process. The Senior Account discussed the importance of TCFD reporting and advised that the consultation in respect of this ended in November.  Members were advised of the aspirations to become ‘carbon neutral’ through using the framework with the framework also producing a consistent approach to climate-related financial risk disclosures across 8 Local Authorities.

Members RESOLVED to:

      I.         Note the update provided.

To consider any urgent items as the Chairman feels appropriate