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The decisions as the council's minutes record them. A plain-language summary follows once it has been written.
RESOLVED: The minutes of 19 March 2025 were received, approved, and will be signed by the Chairman.
RESOLVED: The Committee agreed to recommend to Flintshire County Council that it approves the recommendations set out within the WPP joint report attached, with the stipulation that the delegation to the Deputy Section 151 Officer be replaced with the Head of Clwyd Pension Fund, and also to add a sixth recommendation that the Council does not consider the case proven for mandatory pooling.
RESOLVED: a) That the Committee consider the update and provide any comments. b) That the Committee agree that delegated responsibility to approve the final response to MHCLG’s Access and Fairness consultation is jointly provided to the Pensions Administration Manager and Head of Clwyd Pension Fund, noting that Committee and Board members will be asked to share any views as part of the training on the afternoon of the meeting.
RESOLVED: a) The Committee considered and noted the update, and provided comments and questions. b) The Committee approved the updated CPF Business Plan 2025/26 for the additional Funding section task.
RESOLVED: The Committee noted the report.
RESOLVED: The Committee noted the report.
RESOLVED: The Committee noted the upcoming Committee dates, and agreed to review the timing of the 25th March meeting. The Chairman thanked everyone for their attendance and participation. The next formal Committee meeting is on 10 September 2025. The meeting finished at 12.15pm.
The Chair invited attendees to declare any potential conflicts of interest that they may have in relation to the Fund, other than those already recorded in the Fund’s register. Mr Latham highlighted that item 11 (Update on the Pension Fund’s Resourcing) refers to the roles of some officers present at the meeting. There were no new declarations.
The Chairman stated that whoever is appointed Vice Chair, will also be appointed as the deputy representative on the Joint Governance Committee (JGC) for the Wales Pension Partnership (WPP). The Chairman asked for nominations for this role. Following nomination from Cllr Mullin, Cllr Shallcross was appointed as the Vice Chair. RESOLVED: The Committee appointed the Vice Chair and noted that the Chair and Vice-Chair are therefore appointed as Member and Deputy (alternate) respectively of the Joint Governance Committee for the Wales Pension Partnership.
Decision as recorded
RESOLVED: The minutes of 19 March 2025 were received, approved, and will be signed by the Chairman.
The minutes of the meeting of the Committee held on 19 March 2025 were agreed. RESOLVED: The minutes of 19 March 2025 were received, approved, and will be signed by the Chairman.
RESOLVED: That the press and public be excluded for the following item by virtue of exempt information under Paragraph(s) 14 of Part 4 of Schedule 12A of the Local Government Act 1972 (as amended).
Decision as recorded
RESOLVED: The Committee agreed to recommend to Flintshire County Council that it approves the recommendations set out within the WPP joint report attached, with the stipulation that the delegation to the Deputy Section 151 Officer be replaced with the Head of Clwyd Pension Fund, and also to add a sixth recommendation that the Council does not consider the case proven for mandatory pooling.
Mr Latham took the Committee through this report, highlighting the legal advice that the approval required for the creation of the Wales Pension Partnership Investment Management Company (WPP IMCo) is a responsibility of Flintshire County Council and cannot be delegated to the Committee. The report provided is a draft document prepared by the WPP Project Snowdon Steering Group, which will be presented to all eight Constituent Authorities including FCC. This along with the updated budget was approved by the WPP Joint Governance Committee (JGC) on 4 June. Mr Latham set out the requirements of Clwyd Pension Fund and the Committee’s expectations for WPP IMCo which include: o An appropriate governance structure which includes member representation. o Retention of the Fund’s risk management framework o Ability to implement responsible investment and climate policy o Geographical spread of local investment in Wales The Committee were asked to recommend for the Council to approve the recommendations set out within the report, however with the role ‘Deputy Section 151 officer’ to be replaced with ‘Head of Clwyd Pension Fund’. Mr Hibbert said he was concerned with the draft recommendations and asked if the recommendation to Council should specify the Committee’s areas of concern in relation to the formation of WPP IMCo, as listed in the Fund’s response to the Fit for the Future Consultation, to ensure WPP IMCo are fully aware of them and have time to address them. Cllr Ibbotson said he shares Mr Hibbert’s concerns, and that the Committee’s agreed view that the case for mandatory pooling is not proven should be reflected in the recommendation to Council. He moved to accept the recommendations with the stipulation that the delegation to the Deputy Section 151 Officer be replaced with the Head of Clwyd Pension Fund, and to add a sixth recommendation that FCC does not consider the case proven for mandatory pooling. This proposal was seconded. Cllr Shallcross asked officers and advisers to advise on this proposal. Mr Latham said that while he feels the likelihood of a change of direction from UK Government on pooling is unlikely, it is important for the Committee to continue to express the view it has agreed collaboratively. Mr Ettles and the Chair agreed that the UK Government is unlikely to change its decision especially considering the fast pace of progress. Mr Hibbert said it should be made clear that the Clwyd Pension Fund Committee does not agree that the cost of mandatory pooling is in the best interest of its members. Cllr Mullin agreed with the points raised but added that he feels it would be nearly impossible to change the UK Government’s mind on the matter and it would be a waste of resource to attempt it. Cllr Wedlake said that the UK Government has reversed decisions on other matters recently under political pressure, so it is possible they may reverse this decision. He was concerned that the changes proposed would be made at a cost to the Fund. He felt it should be made clear to the Council that while this is the best option available, it is not optimal and not a decision the Fund would have made. Cllr Ibbotson summarised that the Committee agrees it should continue to advocate for the best interest of the scheme members by expressing its view that the case is not proven for mandatory pooling, and by asking the Council to share that view. He said that most members of the Council will be unaware of the mandatory pooling debate, and the Committee’s role is to provide guidance on this. Cllr Rutherford noted that while he agrees with the comments made, the recent decisions reversed by Government involved substantial public support, whereas the LGPS pooling debates have been less public and scheme member awareness is limited. He said the Committee should express its view and raise awareness. He highlighted that regardless of the outcome, the Fund needs to ensure that some Clwyd Pension Fund assets should be invested in the Clwyd area for the members to see the benefits. RESOLVED: The Committee agreed to recommend to Flintshire County Council that it approves the recommendations set out within the WPP joint report attached, with the stipulation that the delegation to the Deputy Section 151 Officer be replaced with the Head of Clwyd Pension Fund, and also to add a sixth recommendation that the Council does not consider the case proven for mandatory pooling.
Decision as recorded
RESOLVED: a) That the Committee consider the update and provide any comments. b) That the Committee agree that delegated responsibility to approve the final response to MHCLG’s Access and Fairness consultation is jointly provided to the Pensions Administration Manager and Head of Clwyd Pension Fund, noting that Committee and Board members will be asked to share any views as part of the training on the afternoon of the meeting.
Mr Ettles took the Committee through this report, including progress against the business plan, the Access and Fairness Consultation, and a delegation which had been approved relating to an employer exiting the Fund with exit credit, in line with the Fund’s agreed process. He highlighted the later agenda item relating to resourcing. Mr Hibbert asked about the circumstances of the exiting employer and what information was provided to the affected members prior to their exit. Mr Latham and Mr Middleman confirmed that they were not aware of the specifics of the employer’s reason for exiting. Mr Emmerson advised that it is common for LGPS funds to only be made aware of exits after the fact. Cllr Wedlake commented that the ongoing issue regarding job evaluation seems to have been going on for a number of years. He said that given the pooling changes will create a number of well paid jobs coming up in the sector, there is a serious retention risk for Fund officers. He asked what the next point of escalation of the risk is, and whether this appears on the Flintshire County Council risk register. Mr Latham said he has liaised with FCC about possible solutions according to the Council pay policy including market supplements in lieu of the required job evaluation exercise being completed, which will be discussed in a later agenda item. Cllr Wedlake felt that there should also be an escalation point from a governance perspective in order for the Committee to fully address the risk. Committee agreed to accept the recommendation. RESOLVED: a) That the Committee consider the update and provide any comments. b) That the Committee agree that delegated responsibility to approve the final response to MHCLG’s Access and Fairness consultation is jointly provided to the Pensions Administration Manager and Head of Clwyd Pension Fund, noting that Committee and Board members will be asked to share any views as part of the training on the afternoon of the meeting.
Decision as recorded
RESOLVED: a) The Committee considered and noted the update, and provided comments and questions. b) The Committee approved the updated CPF Business Plan 2025/26 for the additional Funding section task.
Mr Hughes presented this report, highlighting the update to the Fund’s business plan, WPP matters, and responsible investment including an update on the legal advice received regarding consulting with members on a proposed exclusion policy. Mr Hibbert said he was concerned that the Fund was focusing on consulting on a specific area of concern (the Office of the United Nations High Commission for Human Rights database or “OHCHR”) rather than the principles upon which the Fund should divest. He believes that it is generally accepted that the LGPS does not invest in tobacco, pornography or weapons. He would prefer to consult with members on principles of divestment rather than a specific issue, and for members to delegate authority to the Committee to make decisions aligned with their general views. Cllr Wedlake said that having moved the resolution to pursue the exclusion policy, it was originally felt it would be helpful to gain a specific consensus on the UN OHCHR database rather than a wider definition, but if that decision is preventing implementation of an exclusion policy, the Committee should consider a different approach. Cllr Ibbotson expressed his view that members should be included in decision-making as much as possible, and a broad consultation with members should be taken, which may include asking members for their preference between a broad spread of principles for exclusion or specific issues such as the OHCHR list. He said no single issue should be sacrificed over another. The outcome of any survey undertaken should inform the Committee on decisions and discussions now and in future. Mr Hibbert agreed with this, and clarified his earlier point that consultation should be applicable to future discussions but not exclude the specific issue of the UN OHCHR database. Mr Ettles explained that officers and advisers held discussions with legal advisers on the requirements for consulting appropriately with members. The Fund received a strong steer from the legal adviser to aim to take a financial grounds approach, due to legal uncertainty and lack of precedent around the non-financial approach to investment exclusions. The Fund’s investment consultant advised that it would be difficult in this case to exclude the holdings based purely on financial grounds, meaning if the Committee wishes to pursue an exclusion policy, the Fund should survey the membership. The Fund has already met the requirement to confirm there will be no significant financial detriment to the decision. Mr Hibbert felt that there should not be a need to consult with members if the materiality of the divestment is not a significant proportion of Fund assets. Mr Turner said that there will need to be careful consideration given to the wording of any consultation with members, and with respect to the suggestion of a materiality threshold, the Fund will need to be cautious of the cumulative impact of potentially multiple exclusions. He said he was not aware of another fund taking this approach, so it would need to be considered carefully. Mr Emmerson confirmed that the Supreme Court’s ruling on this does not specify a threshold level for materiality. The Chair said that the Committee’s main consideration should be the benefit to members financially but that other considerations are important within the Fund’s principles and policies. He noted that there is a risk of a broad exclusion policy allowing issues to be pursued based on Committee members’ interests which could be subject to legal challenge in future, unless the views of members are researched on all those issues when they arise. Mr Hibbert said he would prefer to proceed and then deal with any legal challenges arising as a result. The Chair highlighted that the cost of legal challenge would fall on the Fund which would not be an appropriate use of financial resources, and the Committee should not make decisions relating to personal views and ideologies. Cllr Ibbotson requested for the legal basis for existing exclusions to be researched and provided to the Committee ahead of the next meeting. Mr Latham confirmed this will be looked at but advised that to his knowledge the Fund does not have a specific investment policy statement on this matter, although the Fund invests in some sub-funds which have been created with exclusions based on principles resulting from engagement with fund managers. Cllr Ibbotson said that operating an unpublished policy to request exclusions from fund managers could also be subject to legal challenge, and it is important for the Committee to understand the legal basis for the current operations. He highlighted that potential exclusions on issues which are more politically controversial than the existing exclusions could attract increased risk. The Chair asked for clarification on any existing arrangements to exclude investments in tobacco, pornography and armaments. Mr Turner said the Fund’s responsible investment policy does not make specific references to those sectors of companies, however there are restrictions in place which are determined by the investment managers of the WPP sub-funds that the Fund has invested in. Mr Turner further suggested it would be helpful to revisit the objectives of these at a future meeting. Mr Latham confirmed that exclusions within the Sustainable Active Equity fund were agreed by WPP, so the documentation and governance is in place, but within WPP rather than the Fund’s investment strategy statement. There was some discussion over the possibility of implementing a de minimis level of disinvestment that would not require consultation with members. The Chair noted the advice from advisers that the Fund should seek legal advice as to whether this is feasible and the associated risks, and said his view was that this advice as well as consultation with members is needed before any further decision can be made. Cllr Wedlake said that his original proposal on this issue was made in order to be pragmatic with the understanding of the resource requirements of ongoing national changes for the Fund, while respecting the evidence that members were supportive of the exclusion. He was concerned about the cost of taking legal advice that he felt is unlikely to provide clarity and may be used as an excuse not to take action, particularly given the Fund has not been open to legal challenge on existing exclusions. Cllr Ibbotson requested that when seeking advice on a de minimis exemption, the Fund should also ask for advice on whether any policy agreed should be operated for a fixed number of years before reviewing members’ support to continue. Cllr Ibbotson also said that the Fund’s decision to invest in funds which operate exclusion policies is a policy choice. He reiterated that he would like the Committee to receive an explanation of the current policy, where it is drawn from, and the legal basis for this. The Chair reiterated that a strong legal steer from expert counsel is required to ensure the Committee’s decisions are not subject to legal challenge, as well as clarity on the existing exclusions. He suggested avoiding widening the scope of the survey and potential exclusions until feedback has been received from a legal adviser on the current matter at hand. The recommendation was moved, seconded and accepted by the Committee. RESOLVED: a) The Committee considered and noted the update, and provided comments and questions. b) The Committee approved the updated CPF Business Plan 2025/26 for the additional Funding section task.
Decision as recorded
RESOLVED: The Committee noted the report.
Mr Middleman took the Committee through the funding, flightpath, and valuation aspects of this report, and Mr Turner presented the investment performance section, including the impact of US tariffs, and the underperformance of the WPP Sustainable Active Equity Fund (SAE) and Multi-Asset Credit (MAC) Fund. Cllr Ibbotson noted the underperformance of the SAE fund. He said there has been significant growth in sustainable funds over the last few years but within those portfolios some companies have grown better than others, so the percentage of the investment fund those companies represent has increased. He said that over-concentration of the Fund’s investment in a particular company within the portfolio due to positive performance poses significant risk, for example Tesla’s share prices have been volatile in recent months due to political factors in the US which has resulted in an outsized impact on sustainable funds. He said that while there is an incentive to remain invested in the best performing shares while they are on the way up however there is also an incentive to diversify away from those as quickly as possible. He asked: - How much of the drop in performance of the SAE fund is due to Tesla’s performance? - With respect to WPP sub-funds more broadly, how much reallocation of funds is there away from stocks showing growth in order to diversify further, and how is that managed within WPP? - Are there any other companies to which the Fund is particularly exposed in this way? Mr Turner said that active management in global equities has struggled to outperform the index over the last 5 years: recent analysis showed ~70% of active managers were underperforming the benchmark (delivering return worse than the index), and managers invested on a dedicated sustainable theme have struggled further due to being underweight with respect to US equities and ‘large cap’ stocks. He said Cllr Ibbotson’s questions can be looked into, but he would be cautious of attributing performance challenges in the WPP funds to the performance of a single stock. He noted that while the weighting of investments is variable, Tesla was not a top 10 stock in the SAE fund at the end of Q1 2025, suggesting it has not been a significant contributor to negative performance. He also clarified that Russell Investments are the multi-manager (on behalf of WPP) and are responsible for the selection of the managers within the fund, and they will be looking to ensure the level of diversification remains appropriate within the portfolio. Mr Latham said the Fund invites representatives from Russell and Waystone to present at Committee meetings annually, to enable the Committee to ask questions directly to the investment managers. Mr Hibbert noted that para 1.06 states the estimated funding position as at 28 February 2025 was ahead of the expected funding level from the 2022 valuation by 8%, and asked how this figure was reached as he thought it would be 6%. Mr Middleman explained that this is based on a projected figure also accounting for the expected 2% reduction in funding level due to employers use of surplus since the last valuation which meant you were comparing 111% with 103% not the 105% funding level at the last valuation. RESOLVED: The Committee noted the report.
Decision as recorded
RESOLVED: The Committee noted the report.
There were no questions or comments on this item. RESOLVED: The Committee noted the report.
RESOLVED: That the press and public be excluded for the remainder of the meeting by virtue of exempt information under Paragraph 14 of Part 4 of Schedule 12A of the Local Government Act 1972 (as amended).
Decision as recorded
RESOLVED: The Committee noted the upcoming Committee dates, and agreed to review the timing of the 25th March meeting. The Chairman thanked everyone for their attendance and participation. The next formal Committee meeting is on 10 September 2025. The meeting finished at 12.15pm.
The Chairman asked the Committee to note the following future Committee meetings: • 2.00 pm on Wednesday 10 September 2025 • 9.30 am on Wednesday 26 November 2025 • 9.30 am on Wednesday 25 February 2026 • 2.00 pm on Wednesday 25 March 2026 – To be confirmed • 9.30am on Wednesday 17 June 2026 Cllr Wedlake raised that there are some clashes with Wrexham Council including full Council on 25 March, and requested for this meeting to be started half an hour earlier to allow him to attend both. RESOLVED: The Committee noted the upcoming Committee dates, and agreed to review the timing of the 25th March meeting. The Chairman thanked everyone for their attendance and participation. The next formal Committee meeting is on 10 September 2025. The meeting finished at 12.15pm.
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