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Resolved: i. The Board accepted the paper with the condition that the risk register be updated as above. ii. The Pension Fund Manager would circulate the updated risk register.
RESOLVED that in accordance with Section 106 [8] Local Government Pension Scheme [LGPS] Regulations 2013 the Board goes into the confidential agenda with the public and press being excluded as some of the information may relate to financial or business affairs of a particular person or organisation.
Apologies were received from: David Powell (Scheme Member Representative).
There were no declarations of interest.
The minutes of the last meeting held on 02 September 2024 were agreed as a correct record as a correct record.
The Chair stated that agenda items would cover matters arising.
The minutes from 07 October and the draft minutes from 22 October 2024 (Responsible Investment) were noted and aligned with the Pension Board agenda. The Chair noted the following: 07 October The Committee reviewed the outcomes of the Risk Register deep dive. Discussions covered responsible investment, with a questionnaire nearing completion by Committee members to identify investment beliefs and noted that the Scheme Advisory Board had published a statement to provide guidance to LGPS administering authorities regarding their fiduciary duty. WPP would provide a training session later in the month on responsible investment, followed by an additional Pensions and Investment Committee meeting early in the new year. Details would be shared by the Pension Fund Manager. 22 October The meeting focused on Pension Administration Team resources. It was the Boards responsibility to seek assurance that sufficient resources were in place to ensure effective administration and staff well-being. Clarification was provided at the meeting on how resources were funded. David Powell had submitted written comments on these Committee minutes: “As the Council's ex S151 Officer and lead on the pension fund I welcome the Committee's approval of recommendations proposed by Aon to strengthen the Pension Section resource. Aon's reasons are sound around compliance and at a time of change the team needs to be resilient. It is important to stress that the associated costs do not fall on the Council's General Fund and are outside of the Council's overall budget setting process leading to council tax setting. Therefore, increasing the resilience of a relatively small team will not be at a cost to council services." The Committee unanimously agreed to advance the proposal made by Aon. The Pension Fund Manager added that Aon had factored in and considered local authority and pension fund resource comparisons, additional impacts on the team due to rapid changes and increased expectations on the Fund.
The Pension Fund Manager provided a verbal update, the new general code of practice had been implemented six months before (27 March 2024). A high-level assessment had been conducted in line with new requirements and a report provided to the Board. The Board were reassured that work was ongoing, with plans in place for deep dive meetings to cover each module and acknowledged several recent changes in which additional resources would enable focus for task completion.
The Board received the Operational and Administration report. The Pension Fund Manager highlighted that the report provided was for the period 01 July to 30 September 2024 which evidenced the cash flow and high-level membership statistics which had increased slightly. David Powell had submitted written comments on this report: "Would welcome any comment on cashflow given the quarter shows an increasing gap' albeit one skewed by transfers and lump sums. Clearly not the whole picture as the issue of investment performance is outside of the figures on page 23. A point of assurance". The Pension Fund Manager stated that the cash flow figures excluded investment and governance-related data and assured the Board that the Fund was cashflow positive when including investment income. Assurance was also given that the Committee had approved a cash flow matching strategy that would manage the cashflow position in the medium term. The Chair added that the predicted cash flow will be factored-in when the Fund’s asset allocation will be reviewed during the first quarter next year. The Pension Fund Manager confirmed that relevant training would be arranged prior to the asset allocation review.
The Board noted the Legislation and Governance changes Update. The Pension Fund Manager highlighted: 2.0 Scheme Advisory Board Updates 2.2 - The ‘call for evidence’ by the Government had been completed, submitted and would be made public in due course. A nine-week consultation had been launched by Chancellor of the Exchequer Rachel Reeves after her first Mansion House speech on the14 November 2024 regarding investment pooling within the UK. It was noted that the Government’s intention is that LGPS funds must pool all their assets into Financial Conduct Authority (FCA) regulated structures by March 2026 . Powys assets consisting of long-term investments would need consideration. Regarding the need for LGPS pools to be FCA regulated structures, the Chair added that explicit reference had been made to Wales in the consultation, and further clarification would be sought. The Chair also explained that a different strand to the consultation included the ‘Good Governance’ review, which would result in a framework being issued. An additional risk to the risk register would be considered by the Pension Fund Manager regarding the requirement to pool 100% of our assets, and the requirement for Welsh Pension Partnership (WPP) to become a FCA regulated structure, or to merge with another pool. 3. LGPS Updates 3.1 – A retrospective data exercise to ensure all checks had been conducted for those members that moved to the career average scheme from the final salary scheme, complexities were explained including the historic cross over of information gathering. David Powell had submitted written comments on this matter: "The consideration of a hybrid form for the McCloud Pensions history form - wanted to ask if this approach is consistent with other administering authorities?" The Pension Fund Manager confirmed that the approach was in line with other authorities and clarified option two would be the main focus, and that all members would receive communication in order to obtain as much information as possible but acknowledged that gaps in data would materialise and therefore the Pensions Team would conduct further checks when necessary. 3.2 - TPR Scheme return Reassurances were provided that the return was submitted on 11 November 2024 ahead of the deadline. 3.3 – Awaiting confirmation of the expected pension increase in April 2025 of 1.7%, in line with the Consumer Prices Index (CPI) applicable at the end of September 2024. 3.4 – The Pension Team continued to review and analyse tasks to ensure processes were as efficient and effective as possible. Reassurances were provided that every new calculation had the McCloud remedy applied, and historic calculations would be revisited. 4.0 Pension Dashboard 4.1 - The Pension Dashboard was set to launch in October 2025. Ongoing meetings with software providers focused on data quality and data cleansing exercises. Impacts were unknown on the Pensions Team who were also conducting data exercises in preparation. 4.2 – The Pensions Regulator had provided guidance on the upcoming launch of the Pension Dashboard. 5.0 Board Vacancies There was a Scheme Member Representative and Scheme Employer Representative vacancy on the Powys Pension Board.
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Resolved: i. The Board accepted the paper with the condition that the risk register be updated as above. ii. The Pension Fund Manager would circulate the updated risk register.
The Board received the Investment Pillar of the Risk Register. Regarding possible impacts to the Fund around pooling of assets, the Pension Fund Manager would consider wording for an additional risk and circulate to the Board. It was agreed to work through the Register in sequence. INVEST0001 – long-term returns - Agreed by Board. INVEST0002 - investment strategy - Would be reviewed in the first quarter of next year, aligned with the Pension Fund Actuary’s schedule. INVEST0003 – investment manager performance - It was felt that multiple layers were in place to monitor and control the risk, including the WPP and operationally Russell Investments for global growth. An oversight advisor was also in place to identify and rectify issues at the earliest opportunity. INVEST0004 – deficit recovery - Like many in the LGPS, some employers were identified to be in a deficit position; however, a fund recovery period supported recovering the deficit over a shorter period and would be highlighted in the upcoming training session. INVEST0005 – stepping contribution rate changes - Recognised impacts on the employer contribution rate with an acknowledged stepped approach to manage the risk was agreed by Board. INVEST0006 – pay and price inflation - A buffer was introduced at the last valuation to manage the period of high inflation for the short term. INVEST0007 – insolvency of an asset manager - Assurance was provided that processes were in place for actions to be taken quickly, if necessary, with the scheme of delegation. The Pension Fund Manager would consider a new risk or provide updated commentary regarding any possible change in circumstances related to the pool’s operator, or fund allocators, as well as asset managers. INVEST0008 - pooling of assets – As discussed under the Legislation and Governance changes update, and above under INVEST0007. The commentary would be updated based on the recent consultation to address the fund pooling structure and potential timescale risks. INVEST0009 – Markets in Financial Instruments Directive (MIFID) II Institutional Investor Status - the historical score of 12 in the ‘uncontrolled’ column was discussed, and it was suggested that this may now have settled . The Pension Fund Manager would consider archiving the risk with the approval from the Committee. INVEST0010 – returns on Government bonds - it was felt that the risk was subset of INVEST0001, while a risk-based valuation approach had reduced reliance on bond yields. The Pension Fund Manager would consider archiving the risk with the approval from the Committee. INVEST0012 – Environmental, Social and Governance (ESG) factors - The Pension Fund Manager would update the commentary to reflect not only climate change, but other social aspects including relevant world conflicts. Resolved: i. The Board accepted the paper with the condition that the risk register be updated as above. ii. The Pension Fund Manager would circulate the updated risk register.
The Board noted the quarterly Wales Pension Partnership (WPP) update. Discussions were held around the report including: • 2.2 – The responsible investment update by the Pool Oversight Advisor had been included for the first time. • A summary of the Joint Governance Committee meeting had been provided. • Page 35 showed a table demonstrating the pooling of assets as at 31 March 2024. • The performance summary showed that pooled funds / asset managers had not outperformed expected benchmarks. Reassurance was provided to the Board that swift action was taken to remedy issues, as required.
The Board noted the following in respect of standing items: a) Breaches Register – no update. b) Audit Reports - awaiting outcome from Audit Wales. c) Internal Dispute Resolution Procedure [IDRP] – no update.
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RESOLVED that in accordance with Section 106 [8] Local Government Pension Scheme [LGPS] Regulations 2013 the Board goes into the confidential agenda with the public and press being excluded as some of the information may relate to financial or business affairs of a particular person or organisation.
RESOLVED that in accordance with Section 106 [8] Local Government Pension Scheme [LGPS] Regulations 2013 the Board goes into the confidential agenda with the public and press being excluded as some of the information may relate to financial or business affairs of a particular person or organisation.
Future dates and progress of membership noted.
Rhaid i gynghorwyr ddweud pan fydd ganddyn nhw gysylltiad personol â rhywbeth sy'n cael ei drafod, fel swydd, eiddo neu aelod o'r teulu. Mae buddiant sy'n rhagfarnu yn ddigon cryf i'r cynghorydd adael yr ystafell fel arfer a pheidio â chymryd rhan.
Caiff datganiadau eu darllen o'r cofnodion unwaith y byddan nhw wedi'u cyhoeddi.
Dyw'r cyngor ddim wedi cofnodi presenoldeb ar gyfer y cyfarfod hwn.
Yn rhestru cynghorwyr presennol y cyngor yn unig. Nid yw aelodau cyfetholedig, swyddogion a chyn-gynghorwyr yn cael eu dangos.