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The minutes are published. No summary has been written yet.
1.1 No apologies were received.
2.1 Members confirmed the following declarations of personal interest: Councillor In Receipt of Pension Contributor Huw Bevan NONE Self Glyn Caron Self and wife Self and son-in-law Veronica Crick Husband Self Jon Horlor NONE Self Peter Jones Wife Self and wife 2.2 In addition to the above, Councillor Veronica Crick also confirmed a personal interest as a board member of Bron Afon Community Housing. 2.3 The CLO left the meeting.
3.1 The minutes of the meeting held on 13 September 2021 were confirmed as an accurate record.
4.1 The minutes of the meeting held on 15 November 2021 were confirmed as an accurate record.
5.1 The Committee noted the minutes.
6.1 The HoP highlighted the following key headlines from the report: • Tranches 1 and 2 (Global Opportunities Equities and UK Opportunities Equities respectively) had been trading for over two years and summary level performance was available in the tables within paragraphs 6.1.A and 6.1.B of the report. • With regards to Tranche 4 – Emerging Markets, Pensions Committee had agreed to proceed with a 2% allocation to this asset class at their June 2021 meeting, in accordance with the investment strategy. Current assets within this fund amounted to £73.4m as at the end of October 2021. Early stage performance details would be available at the March 2022 meeting of the Committee. • With regards to Tranche 5 – Alternative Investments (Private Markets), an extensive procurement process was underway. An update would be provided at the next meeting of the Committee and it was hoped that investment proposals would also be available for consideration. 6.2 The Pensions Committee agreed to note the contents of the report.
7.1 The PM highlighted the following key headlines from the report: • On 15 October 2021 the Scheme Advisory Board (SAB) published the results of its cost management process for the 2016 Scheme valuation and the SAB confirmed that they were not recommending any benefit changes based on the outcome of their 2016 cost management process. Going forward, the SAB would revisit tier three ill health pension and contributions for the lowest paid members. • On 4 October 2021 HM Treasury published its response to the Public Service Pensions: cost control mechanism consultation. The Government’s response confirmed that it would proceed with all three proposed reforms outlined in paragraph 5.3 of the report. • As at 30 November 2021, 6,262 members had signed up to My Pension Online (MPO), which equated to 12.24% of the Fund’s total membership. Pensioner members were being encouraged to sign up to MPO via their Annual Gwent Grapevine newsletter. • 33 out of 57 employers were now submitting their data to the Fund through i-Connect. These were mostly small and medium sized organisations; however the Fund was working with larger organisations in order for them to use i-Connect in the coming months. • The Fund continues to work on the McCloud project, updating members records with service breaks and change to hours. All employers with the exception of one had now either provided data to the Fund or confirmed the data that they had already submitted was complete and accurate. • On 8 November 2021, the Occupational and Personal Pension Schemes (Conditions for Transfer) Regulations 2021 were laid and these took effect from 30 November 2021. These regulations set out additional checks that all pension schemes must make before paying a transfer value to a new scheme and the conditions were listed in paragraph 10.3 of the report. The Fund had carried out a review of its transfer procedure and member communications relating to transfers in order to ensure that the new regulations were met. 7.2 Following questions from the Committee, the PM made the following points: • Members of the Fund, particularly pensioner members, who did not wish to sign up to MPO would continue to receive hard copies of their Annual Benefit Statement and correspondence. • The reference to the cost corridor being widened from 2% to 3% of pensionable pay, within paragraph 5.3 of the report, would result in less of an impact on the benefit structure of the Fund. 7.3 The Pensions Committee agreed to note the content of the report.
8.1 The HoP highlighted the following key headlines from the report: • The quarter had been a positive period on an absolute basis. The Fund posted a return of +0.91%, marginally underperforming the benchmark return of +0.93% by -0.02%. During the quarter the value of the Fund had increased by approximately £33m to £3.757bn, and at the end of November 2021 the value of the Fund was just over £3.8bn. • Mixed performance had been seen across the markets during the quarter; however some Equities markets and Property markets had performed particularly well. • As requested at the previous meeting of the Pensions Committee, the table within paragraph 4.2 of the report now also included an extra column in order to compare actual asset allocation versus target asset allocation. • Fixed Interest investments were consciously overweight whilst the Fund awaited options around Private Markets via the Wales Pension Partnership (WPP). Investments were underweight in terms of Infrastructure and Private Markets but it was expected that solutions provided by the WPP were forthcoming in order to address this. • The most notable difference could be seen in terms of European Equities investments, as the strategic allocation was nil, but the Fund’s asset allocation stood at 13%. The HoP confirmed that steps were being taken in this area and that over £100m had been redeemed from this mandate during the last 12 months for rebalancing purposes; however performance growth of this mandate had been very strong (+16% year to date vs +12.5% average Fund equity performance) leading to disproportionate increases in this area. 8.2 The IA provided the following headlines from Appendix 2 of the report: · The markets had been more volatile since the beginning of December 2021 and sharp falls were seen after the Omicron variant of COVID-19 was discovered; however markets had since rallied. · A debate was ongoing around inflation, with some markets being more concerned than others regarding it. · Technology markets had continued to perform well during the COVID-19 pandemic and renewable energy and electric vehicle markets had seen growth following the COP 26 conference held in Glasgow in October 2021. The direction of travel for future years had also become apparent since the above conference, with particular focus on such things as green credentials and forests. · Emerging markets continued to underperform established markets. · With regards to currency, Sterling had weakened during the fourth quarter, which benefitted the Fund due to its global exposure in terms of its investments. · The global nature of recent rises in energy prices was stark; however this would have eased somewhat with the recent fall in oil. 8.3 Following a question from the Committee, the HoP confirmed that the WPP was currently prioritising its new asset classes; however he assured members of the Committee that property investment was a long-term priority for the WPP and suggested that the Committee may wish to consider timelines and options. The RA added that property investments could be very complex and potentially conflict-ridden for local government pension funds and the IA suggested it was easier to gain consensus regarding future investments than around legacy portfolios. 8.4 A discussion took place around the recent issues encountered by some companies, particularly Evergrande. The IA suggested that the impact would be prolonged, and the market would be volatile; however opportunities also existed in terms of investments in China. 8.5 With regards to the above companies, the HoP confirmed that he had written to all of the Fund’s investment managers in September 2021 and could confirm that the Fund’s exposure was very minimal; however he would explore this issue again in order to alleviate any concerns. 8.6 The Pensions Committee agreed to note the investment performance that had taken place during quarter three of 2021. 8.7 Cllr Peter Jones and the ACER left the meeting.
9.1 The HoP highlighted the following key headlines from the report: • Since the risk register (available in Appendix 1 of the report) was last formally considered by the Pensions Committee in September 2021, the current version had been reviewed by officers as well as the Pension Board, and several updates had been issued, with new narrative shown in red, but where the residual risk had not changed. • In addition to the above, one risk (Risk FG11) had received a moderate score increase during the quarter, with the new narrative being shown in red and the risk highlighted yellow. Risk FG11 related to the new system being used for MPO, and it was anticipated that as more members signed up to using it in the coming months its risk score would be managed back down to a low level. • The report documented the annual review of all risks included within the Fund Risk Register, at the request of the Pension Board. 9.2 Following a question from the Committee, the HoP confirmed that two risks already existed on the risk register around Environmental, Social and Governance (ESG) issues and Responsible Investing; however it was a Fund priority to review its policies during 2022 and additional risks in these areas were possible as a result. 9.3 The Pensions Committee agreed to note the updated risk register.
10.1 The PM presented the report and thanked members of the Pensions Committee who had completed the Hymans Local Government Pension Scheme (LGPS) Knowledge Progress Assessment, adding that the results would be shared at a future meeting of the Committee. 10.2 With regards to the Annual Training Plan 2021-2022 (Appendix 3 of the report), the PM confirmed that further information around the LGPS Committee Members Spring Seminar would be circulated in the New Year. 10.3 Following a question from the Committee, the PM confirmed that officers were aware of the potential changes to the Committee that could be caused via the local government elections in May 2022, and she reassured members of the Committee that any new members would receive sufficient training. 10.4 The Pensions Committee agreed to note the updated training log and training programme provided within the report.
11.1 The next meeting is scheduled to take place on 14 March 2022.
12.1 The Committee agreed to the exclusion of the press and public from the meeting as presentations and meeting papers were not for publication because in accordance with paragraphs 12 and 14 of part 4 of Schedule 12a of the Local Government Act 1972 (as amended by the Access to Information Variation Order Wales 2007), it contained information about a particular individual and information relating to the financial and business affairs of particular persons including the Council and in all the circumstances of the case the public interest in maintaining the exemptions outweighs the public interest in disclosing the information. 12.2 The Chair invited the four members of the Pension Board to continue observing the meeting. Items 13 and 14 were exempt from the press and public.
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