Wrthi'n llwytho
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RESOLVED:To approve the I. WPP Business Plan for 2026/27. WPP Investment Management Company Business Plan 2026-2027.
RESOLVED: To • Note the progress with the 2025 Valuation approve the attached Funding Strategy Statement.
None received.
Cllr Weaver declared a personal interest as a member of the JGC and also on the Scheme Advisory Board for the local government pension scheme. Councillor Taylor declared a personal interest as his employer has received an investment from the Welsh Pension Partnership.
Y penderfyniad fel y'i cofnodwyd
RESOLVED:To approve the I. WPP Business Plan for 2026/27. WPP Investment Management Company Business Plan 2026-2027.
Chris Lee provided members with a comprehensive update on theWales Pension Partnership (WPP) and WPP Investment Management Company (IMCo) Business Plans 2026/27. The Chairperson thanked Chris Lee for the detailed information and opened up discussion on this item. The Committee noted that the matters under consideration were previously discussed at the Joint Governance Committee and were approved at its meeting held the other week. It was recognised that this is a transitional year, and therefore there is a degree of understanding as to how the arrangements will operate once fully embedded. Members welcomed the WPP Business Plan, in particular the anticipated reduction in the use of external advisers, as the IMCO develops and increasingly takes on an advisory role to the partner funds. The Committee further noted that the Joint Governance Committee was clear that a review of the governance arrangements will take place within the first 12–18 months to assess whether the new structure is operating as intended. It was confirmed that there is a commitment to make adjustments and improvements where necessary as the arrangements mature. It was also reiterated that the Joint Governance Committee expects external adviser costs to reduce over time, including those supporting the WPP and Joint Governance Committee, wherever possible, to ensure the efficient use of resources within the new company, of which the funds are shareholders. Overall, the Committee agreed that the Business Plans represent a reasonable and pragmatic approach for the year ahead, reflecting the transitional nature of the arrangements, with a clear intention to review and refine the model as the company grows and governance arrangements become established. Cllr Cowan asked a question about recruitment. She noted the aim to recruit 12 additional people, but considered the recruitment costs at £282,000 seemed exceptionally excessive for that kind of figure, and sought clarification on this. The Committee was advised that, as part of the company’s regulatory requirements, a number of Senior Management Function (SMF) roles have been appointed. These are specialist posts requiring FCA approval, necessitating more extensive and specialist recruitment processes than would typically apply within local government. The SMF roles include, but are not limited to, Director of Risk, Director of Finance, and Director of Investments. The individuals appointed to these positions have generally been recruited from City and other specialist financial institutions, reflecting the expertise required to meet regulatory expectations. As a result, the associated recruitment and remuneration costs are higher than standard local government benchmarks. Members were assured that this remains an area subject to ongoing review and monitoring. It was further noted that any salaries or costs arising from these appointments are fully transparent and subject to shareholder scrutiny. These costs are considered as part of the company’s annual business plan, which is presented to shareholders, and members can expect regular challenge and scrutiny to ensure value for money and ongoing justification of costs. Cllr Taylor noted that the report refers to future staffing projections of approximately 30 posts in total. Members queried the extent to which the associated payroll costs may exceed current requirements, acknowledging that the precise position will depend on timing and final staffing decisions. It was highlighted that the operating budget of £9 million is already £2 million higher than that assumed within the original business case, reflecting in part the bringing forward of some posts into year one. Members sought clarification on whether all Senior Management Function (SMF) roles have now been recruited, or are in the process of being recruited. The Committee further requested information on the ongoing financial commitment associated with these senior and higher-cost posts, including the longer-term implications for the payroll budget once the organisation reaches steady state. Members were advised that, in response to UK Government requirements effective from 1 April, the company is required to provide professional pension advice to all pension funds. As a result, the funds are not permitted to procure such advice independently, and all advice must be commissioned through the company. It was noted that the Chief Executive has been keen to accelerate the appointment of key officers to ensure that the required level of advice and support is available from the outset. Members were informed, as highlighted by Councillor Taylor, that this has resulted in an increase in costs above those set out in the original business case. This reflects revised expectations around the level of advice and support required from day one, which is greater than initially anticipated. While the increased costs are shared across the eight funds, this nonetheless represents a significant overall increase, and it was recognised that this position will need to be kept under review and closely monitored. Members were updated on recent appointments, noting that several Senior Management Function (SMF) roles have now commenced. The Director of Investment commenced their role last Monday; the Director of Finance is due to start next week; and the Head of Communications commenced today. These appointments are actively populating the agreed structure. It was further confirmed that the office will be located in Cardiff. Members acknowledged that the establishment of the centre and the appointment of these key individuals is expected to have a positive local impact and provide appropriate support for the fund going forward. Cllr Taylor asked a further question around material amendments of the business plan. Chris Lee explained the Shareholder Board expected to receive regular financial and operational reports from the company. It was emphasised that any unexpected or significant cost variations would be a matter of concern, and Members would be particularly disappointed were there to be any sudden increases approaching the 10% variation threshold. It was highlighted that prior to the establishment of the company, contract variations with external providers had exceeded 10%, and that the current arrangements had therefore reduced variation to a maximum of 10%. This was considered to reflect the transitional nature of the current year. The Committee was reminded that it had been clearly communicated to the company that a full review would be undertaken within a 12–18 month period. This review would encompass governance documentation, governance arrangements, and the effectiveness of reporting lines and meeting structures, as well as an assessment of budget requirements and the appropriateness of permitted budget variation. Members noted that the setting of the budget remained a reserved matter for the Shareholder Board, which retained full control in this respect. However, it was acknowledged that a degree of budgetary flexibility was necessary to enable the company to operate effectively. It was further acknowledged that the company was not operating for profit, but on behalf of the eight pension funds. The Committee agreed that it would expect regular reporting to the Shareholder Board on any variations in expenditure. Cllr Taylor commented that the prominence given to Environmental, Social and Governance (ESG) considerations and local impact investment opportunities was particularly welcome and viewed positively. The Chairperson commented that this was a positive development. It was noted that the Chief Executive of the new company was highly business?focused and commercially minded, and had a clear vision of the opportunities available, both for Wales and for the partner pension funds, to deliver wider positive impact. The Committee noted that the Chief Executive had been very positive about embedding Environmental, Social and Governance (ESG) considerations and responsible investment principles into the business from its inception. Members welcomed the clear commitment to integrating ESG as a core part of the company’s operations from day one. The Chairperson further highlighted that this strong focus on ESG and responsible investment was balanced by a clear understanding of fiduciary duty and commercial requirements. Although the company operates on a non?profit basis, it was emphasised that it would function as a professional investment management organisation, which was regarded positively by the Committee. The Chairperson commented that he wished to place on record his thanks to Chris Lee in particular, as well as to all officers who had contributed to the work undertaken. The Chairperson noted that Chris Lee had served in a transitional role on the Board during what had been an intensive and demanding period of work. It was acknowledged that the Committee had been well represented over the past year by the four Section 151 Officers involved in this process. The Chairperson stated that he had been especially pleased that Chris Lee had been part of this work, as his involvement had provided additional assurance that the process had been approached thoroughly and robustly. The Committee recorded its appreciation for the significant commitment and hard work undertaken by Chris Lee and the other officers throughout the year. RESOLVED:To approve the I. WPP Business Plan for 2026/27. WPP Investment Management Company Business Plan 2026-2027.
Y penderfyniad fel y'i cofnodwyd
RESOLVED: To • Note the progress with the 2025 Valuation approve the attached Funding Strategy Statement.
Officers provided a comprehensive outline of the report, after which the Chairperson invited questions and comments from Committee Members. The Chairperson noted that it was very pleasing to see the outcomes of the three?year valuation, particularly the improvement in the Fund’s overall funding level and the increased probability of success. These results were welcomed as they demonstrate enhanced prudence and resilience within the Fund’s strategy. The Chairperson highlighted that the continued discussion around retaining a 10% funding buffer, both for employers in surplus and the Fund as a whole, was appropriate and reflected the need for continued prudence in pension fund management. In the context of ongoing global economic uncertainty, the Chairperson expressed reassurance that the valuation results showed a strengthening of the Fund’s financial position and risk profile, and concluded by stating that he was very pleased with the improvements achieved. RESOLVED: To • Note the progress with the 2025 Valuation approve the attached Funding Strategy Statement.
None.
To be confirmed following the Annual Meeting of Council.
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