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The decisions as the council's minutes record them. A plain-language summary follows once it has been written.
RESOLVED to exclude the public for the following items of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007).
Apologies were received from Officer Mari Thomas and Luke Hammond of Aon.
Members of the Committee declared interests as members of the Local Government Pensions Scheme. These are personal interests, not prejudicial interests in accordance with Paragraph 12(b) (iv) of the Members Code of Conduct 2016.
The Chair, Councillor Peter Lewis, opened the meeting by noting the significant volume of work undertaken by officers in preparation for the agenda items, emphasising that substantial activity had taken place ahead of the March deadlines and that some elements were still being refined. He expressed appreciation for the considerable efforts of officers, particularly Chris Hurst and Jane Thomas, acknowledging that both had been extremely busy in supporting the Committee’s work.
· It was explained that the Wales Pension Partnership (WPP) had originally been created following the 2015 Chancellor’s initiative that encouraged LGPS funds to pool assets to achieve economies of scale and increase investment in UK infrastructure. · The WPP had been formed using the operator-based model, renting investment management expertise through Waystone rather than forming its own FCA‑regulated company. · The existing governance framework had been based on an Inter‑Authority Agreement (IAA) between the eight Welsh administering authorities, supported by a Joint Governance Committee (JGC) and an Officer Working Group (OWG). · In 2024, the UK Government issued its Fit for the Future consultation, aiming to reform LGPS asset pools, increase UK‑based investment, and strengthen governance of both administering authorities and asset pools. · In response, the WPP submitted a business case in early 2025, which was approved by the Minister in April 2025. The implementation project was known as Project Snowdon. · As a result of the new requirements, the WPP now needed to create a wholly owned Investment Management Company (IMCO) regulated by the FCA and owned jointly by the eight Welsh funds. · Powys County Council had approved the creation of the IMCO in July 2025 and delegated certain decisions to the Pension Investment Committee and the Section 151 Officer. · Following advice from monitoring officers, the proposed amendments to the Inter‑Authority Agreement were required to be taken back to full Council for approval, scheduled for 5 March. · The revised governance structure included a new Shareholder Forum, revised Terms of Reference for the JGC and OWG, and updated legal documents drafted by Burgess Salmon, with oversight from Hymans Robertson. · The Pension Fund Manager confirmed that the IAA amendments removed responsibilities no longer relevant (e.g., operator appointment), inserted new responsibilities relating to client expectations of the IMCO, and updated governance Terms of Reference to align with future legislation. · Financial implications were noted, including the requirement for regulatory capital and ongoing IMCO operating costs. · It was explained that minor amendments might still be required once legislation was finalised on 1 April, and a formal governance review was expected in 2027. Issues Raised by the Committee Responses Received Was the inter‑authority agreement required to be taken back to full Council for approval, and what was the timetable for this. It was confirmed that the Committee’s role was to approve the amended inter‑authority agreement for recommendation to full Council, and that full Council approval was scheduled for 5 March. How could the documents be legally completed by 31 March when the final government guidance would not be issued until 1 April. It was explained that the FCA required legal completion by 31 March and that work was therefore proceeding on the basis of draft legislation, with only minor amendments expected once the final regulations were published. Did “legal completion” refer to the inter‑authority agreement or to the IMCO documentation. It was confirmed that “legal completion” applied to all three documents: the inter‑authority agreement, the shareholder agreement and the client services agreement. Could the required governance documents be amended at a later date if necessary. It was stated that a review was expected within 12–18 months, during 2027, providing an opportunity to revisit any areas requiring amendment. Would all WPP constituent authorities be required to take the amended inter‑authority agreement back to their own full councils. It was confirmed that all eight Welsh authorities were following the same process and would submit the agreement to their respective full councils. Would PCC officers sit on the Shareholder Forum. It was confirmed that the Shareholder Forum would be an officer‑based body, normally comprising Section 151 Officers or their nominated representatives. Who would populate the Officer Working Group under the revised arrangements. It was explained that the Officer Working Group would continue to consist of Section 151 Officers and senior pension practitioners, providing support to the Joint Governance Committee. Would fact sheets be produced to support members of the public in understanding the changes. Officers acknowledged the value of fact sheets and reassured the Committee that the changes related solely to investment pooling arrangements, not administration. Could the creation of the IMCO have any impact on pension payments, given the recent issues reported in the Civil Service pension scheme in England. It was confirmed that the issues in England related to administration, which was not part of this project; administration would remain local and unchanged. Would the changes relating to investment pooling have any effect on pension administration. It was reiterated that only investment governance was changing and that no administrative functions were included within the IMCO proposals. Could additional time be provided to allow Committee Members to interrogate the extensive legal documentation, given concerns about feeling ill‑equipped to approve the changes. Officers acknowledged the volume and complexity of the documents, explaining that significant legal and governance expertise had been used to ensure clarity, consistency and reliability, supported by cross‑authority collaboration and external oversight from Burgess Salmon and Hymans Robertson. Why was a Shareholder Forum being created rather than elevating the Joint Governance Committee to fulfil that role. Officers explained that the Joint Governance Committee would continue to scrutinise investment performance and relay shareholder expectations, but that the Shareholder Forum was required as part of the new nationally mandated governance structure for instructing and overseeing the IMCO. How would democratic oversight be maintained, given concerns that both the Shareholder Forum and the Officer Working Group were heavily officer‑dominated. It was explained that officers would act strictly on the instructions of Pension Committees and the Joint Governance Committee, and that acting contrary to elected‑member direction would place officers in an untenable position. Assurance was provided that democratic strategy‑setting remained unchanged. Who would sit on the IMCO board, how many members would there be, and from where would they be drawn. It was explained that the IMCO would be responsible for implementing the investment strategy and providing investment advice, in line with legislative requirements. Officers noted that more detail could be covered under the shareholder agreement item. Could a specific review of the IMCO board structure and the membership of the Shareholder Forum be undertaken as part of the governance review planned for 2027. It was confirmed that once the new arrangements were in place, such matters could be raised and considered during the 2027 review. Did the explanation in the updated IAA summary note regarding the optional nature of the Joint Governance Committee imply that its public‑facing role would still serve a purpose. Officers noted that the Joint Governance Committee continued to play an important public‑facing role in client governance and that its structure had proved effective. Could further clarity be provided on the purpose and function of the Class A and Class B shares in the shareholder arrangements. It was explained that Class A shares represented voting rights, with each authority holding one vote, while Class B shares related to regulatory capital requirements and would be allocated proportionally based on fund size. Could the questions regarding the Class A and B share structures be addressed during the confidential section of the meeting. It was agreed by officers that detailed discussion of share structures could be covered under the confidential item. The recommendations were accepted by the Committee.
Decision as recorded
RESOLVED to exclude the public for the following items of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007).
RESOLVED to exclude the public for the following items of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007).
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