Wrthi'n llwytho
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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.
There were no apologies for absence.
There were no declarations of interest relating to the items to be discussed on the agenda.
The Board moved to approve the Chair to sign the Minutes of the meeting held on the 13th of February as a true record.
Item 6 - At minute 6, it was noted that the amount of resource required needed to run the LGPS is increasing due to the scale and complexity of the work. This would be picked up at today’s meeting under the operational and legislation updates. Item 7 – An action made under item 7 would be picked up under the operational and administration update. Item 8 – KC’s Legal opinion would be discussed today with a link to the Scheme Advisory Board Notes.
The recommendations made by the Pensions Board regarding the Risk Register were agreed and accepted by the Pensions Committee. The decision of the Committee to invest locally in natural capital was noted. The Board noted the Minutes of the Pensions and Investment Committee.
• The Pension Fund Manager presented the Report. • The Board’s request to be presented with an annual snapshot was accepted and demonstrated in this report. The total for the year was also shown. • Annual outgoing pension benefits were £40million, income from contributions was £36million, excluding investments, due to the fund maturing over time. This is common in the LGPS and required regular monitoring of the investment strategy. In response to this, the Pensions and Investment Committee approved a cash flow modelling strategy in 2024 to monitor income over expenditure. • The fund was currently in a positive cash flow position. However, this was expected to move into a negative cash flow position over the medium term. • The Chair noted that the actuaries present at the LGC Conference at Carden Park were suggesting reductions in employer contribution rates generally, emanating from the expected positive valuation, but that would impact negatively on the cash flow of nearly all LGPS funds. Suggesting a need for careful consideration around investment allocation to different asset classes to have more income generating assets. • Any expected contribution rate reductions were off the back of improving funding levels. • The Member Statistics on page 22 indicated a reduction of 48 members, primarily due to the team’s efforts in reviewing and consolidating historical records. The apparent decrease in membership was attributed to the process of merging records where scheme members had multiple jobs. Questions Raised Responses Received It was questioned whether an accounting issue was presented in the March figures, due to the transfer figures being significantly greater than in other months. The Pension Fund Manager to confirm this to the Board. It was asked whether Powys Pensions Fund was an outlier in cash flow position? Assurance was given that Powys Pension Fund was in a similar position to others throughout Wales. Consideration was given to whether adjustments to contribution levels, or a combination of changes in investment allocation and employer contributions would take place when the strategy changed. The Pension Fund Manager explained that if valuation results suggested that contribution rates reduced, the contribution amounts in the table would also reflect that. The Board noted the report.
• 2.2 The Local Government Association's annual LGPS Governance Conference will take place on the 29th and 30th of January in Cardiff. • 2.3 The McCloud Remedy is a check the administration team is carrying out to determine if members in a certain group would be better off under the old final salary arrangements, compared with their benefits under the new CARE arrangements. The members are then paid the best of the two scenarios. The problem is that the team must revisit lots of historic cases that had already been paid out on the career average basis. Work is ongoing to unpick those cases and pay the better of the two scenarios. Many of the employers in the fund had been completed and were awaiting checking and sign off. • 3. The Chair of the Scheme Advisory Board met with the Chairs of pension committees. It was positive to have dialogue with bodies representing the LGPS in discussions with the Government. • 3.2 Acknowledges the Government’s response to the business cases put forward regarding the LGPS Fit for the Future consultation. • 3.3 A summary note on fiduciary responsibility had been issued by the Scheme Advisory Board, providing guidance on how administering authorities should act in the best interests of scheme members when making investment decisions, particularly in light of the increasing importance of ESG factors and the need to balance financial returns with wider considerations. The key takeaway was that non-financial factors can be taken into account when making investment decisions, where to do so would not involve significant risk of financial detriment to the fund, and where there is good reason to think that scheme members would support the decision. So, committees can consider things that are maybe non-financial, but they must pass those two tests, i.e. significant risk is not involved, and scheme membership support. • 4. The Pension Fund Manager had no concerns with the Pensions Dashboard programme at this stage. It is still unknown what will happen when pension savers begin to use the dashboard. Comfortable that Powys PF are in a good place in preparation. • Low number of data errors. Pleased with progress and optimistic will hit the October deadline. • 5.1 The Pensions and Investment Committee approved additional resources at the end of 2024. Advert now out for a Governance and Communications Officer. • 5.2 - Vacancies on Powys Pension Board had gone to employers on several occasions to seek a volunteer for employer vacancy. This was unsuccessful, but the plan is to go back out to continue to try to fill the vacancy. The County Council have been approached to fill the Scheme Member Representative vacancy via a trade union representative. Questions Raised Responses Received It was noted that the links in the agenda were not working. The Pension Fund Manager agreed to pick this up with Democratic Services. The Chair of the Board requested that a timeline for completion of the McCloud Remedy should be presented to the next Board meeting in July 2025, to give assurance to the Pensions Board that the work would be completed by the statutory deadline. It was agreed that this would be an item on the agenda for the July 2025 meeting. Did the Pension Services have enough resources and support required? The Pension Fund Manager explained that the administration service was in a good place. Due to the Local Government Pensions Scheme being complicated, it has required extensive training for new staff, but the improvements and progress would be seen going forward. The Board was pleased to see tangible evidence of support for the Pension Fund Manager. The Board noted the report.
• The Chair of the Pensions Board presented the draft report he had prepared. • This document would form part of the Pension Fund’s Annual Report for the 2024/25 year. Subheadings had been added to the previous version, and more prominence given to current issues, such as the McCloud Remedy, investment pooling developments, and risk management generally. • The Future Work Plan has identified the following ongoing topics: good governance legislation, staff structures and recruitment, McCloud, Dashboards, and WPP’s response to pooling legislation. • Thanks were given to the Board and officers for the welcome given to the Chair during 2024/25. Questions Raised Responses Received Was there a need to ensure the Committee understood the role of the Board, had this been covered in the report? Paragraphs 7 & 8 covered that. It was felt that the Committee understood the role of the Board, and Members were clearly receptive to the Chair of the Board when making recommendations. The Board moved to approve the report.
• It was noted that, following the recent valuation and prior discussions regarding cash-flow, a review of the Investment Strategy Statement (ISS) was anticipated within the year. As this fell primarily under the Pensions and Investment Committee’s remit, it was not prominently featured in the Board’s Annual Report. The 2022 valuation reflected increased prudence through a reduced recovery period and a higher probability of funding success—an approach that had proven effective historically. The committee intended to continue monitoring this as part of the ISS review. Questions Raised Responses Received Risk INVEST0008 refers to changes in legislation relating to the pooling of assets. That legislation is still to come. The uncontrolled risk could be reduced now with the recent letter from Ministers, although awaiting legislation to be formally approved. Nothing had changed over the short term, but it could be considered whether the scores were appropriate. It was considered that maybe this needed to be reviewed sooner than the review period. Would the requirement around non-financial considerations regarding Fiduciary duty LGPS affect the uncontrolled risk pillar of the risk register, and did it require a policy to be put into place, or inclusion in the investment strategy? This could be included somewhere within the responsible investment policy. A Communication post was now being advertised. The risk had not been tested yet but could be acknowledged. Concerns were raised regarding recent media coverage of pension fund investments, considering geopolitical events, such as the invasion of Ukraine, which prompted a review of potentially non-compliant holdings. The discussion touched on the complexity of fiduciary duty, especially in the context of pooling arrangements and the pressure to invest in infrastructure. It was noted that this balance should be reflected in the risk register going forward. The Chair of the Board acknowledged that this could be considered in future. The KC’s legal opinion did not heighten the risk, so the change did not make it more of an omission. It was agreed that the risk should be watched to see what developed from pools going forward. It was agreed that the Pension Fund Manager would notify the Pension and Investment Committee of the discussion held by the Board.
• The policy helps decision makers who may have grievance against the Pension Fund by providing the process for what they can do. It tells Scheme Members how complaints will be dealt with and the process of making a complaint. • The original policy was considered by the Pension Fund Manager to be appropriate and relevant with very little change needed. Questions Raised Responses Received The Professional Lead for Legal requested that any amendments made to the original policy be made in a different coloured text, for ease of reference for those reading. It was agreed that a version highlighting the changes could be shared with Board members for information, and this practice / format would be adopted when presenting equivalent documents in future. 3.3 – It was suggested that there should be an addition in point 3.3 to explain that a complaint must be clear to progress. The Pension Fund Manager agreed to look at the Council’s policy and take advice from that. 6.1 – Where it says ‘If you are not satisfied with the outcome of your complaint, having taken it through the two stage IDRP process, you may wish to refer the matter to the Pensions Ombudsman’. Should it say ‘If you are not satisfied with the outcome of your complaint, having taken it through the three stage IDRP process, you may wish to refer the matter to the Pensions Ombudsman’? The Pension Fund Manager explained that the process was compliant with the LGPS Regulations. The Professional Lead for Legal Services asked that clarification be included in the policy that all internal pathways to report complaints must be exhausted before contacting the Ombudsman. This was accepted by the Pension Fund Manager and would be added to the Policy. Who would be the adjudicator for a complaint? The term adjudicator has had to be used in fitting with the LGPS regulations and can be flexible to fit the need and stage of the complaint. At stage one it would be flexible, with likely a HR officer in the role. At stage two it could come to a senior officer of the Pension Fund. The Pension Fund Manager agreed to circulate the revised version to members of the Board ahead of taking it to the Pensions and Investment Committee for approval.
• This policy had not changed from the previous version. • The policy was a requirement under the General Code of Practice. • The policy is procedural; allowing people to understand whether a breach is recordable and reportable and supports anyone involved in the Pension Scheme to report breaches. Questions Raised Responses Received Would the Board be made aware of a breach before it was reported to the regulator? Yes, if a breach was noted, it would be discussed by the Board and brought to the Pensions and Investment Committee. Would there have to be a wait until a Pensions Board or Pensions and Investment Committee Meeting to report a breach? If a reportable breach was suspected, it would be brought to the attention of the Board, and a high priority meeting would quickly be arranged to discuss the matter. The Board noted the report and supported its approval by the Pensions and Investment Committee.
· Further details on this item will be discussed in the confidential part of the meeting today, which includes this update. · At recent meetings, the Wales Pension Partnership had proposed the next evolution of the pool, which had been submitted to the Westminster Government. The LGPS Fit for the Future consultation response appeared to have approved this. · A business case was developed to support retaining the Wales Pool, aligning it with the Government’s long-term vision for Wales. The case emphasised the importance of maintaining local investment ownership, ensuring contributions from Welsh scheme members and employers remained within Wales, where the appropriate opportunity arose. · It was noted that failure to convince the Westminster Government could have led to a forced merger with another pool, potentially diluting local investment opportunities and weakening Wales’ influence. · A comprehensive and compelling business case was presented to the Government in late February · The Joint Governance Committee endorsed the proposal to develop Wales Pension Partnership Version 2, which met the Government’s consultation criteria and expectations. · The Minister for Pensions recently attended a repurposed coal mine which had received investment from the WPP as a battery storage facility, which demonstrated the impact of the benefits created by retaining ownership of a Wales investment pool. · The Chair of the Pensions Board had attended several meetings with WPP, and thanked the staff involved (including Powys’ Pension Fund Manager) for their hard work on several work streams, and congratulated them on Ministers showing support for WPP proceeding as set out in the bid. · Further meetings of the Joint Governance Committee were planned for June 2025. The plan would then go to pension committees and full council meetings in July 2025. · Members discussed the possibility of establishing a shareholder board to ensure appropriate governance arrangements with the new company structure. The Board noted the report.
It was noted that the next Pensions Board meeting was scheduled for the 18th July 2025, and would take place in person at County Hall.
Y penderfyniad fel y'i cofnodwyd
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.
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.