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The minutes are published. No summary has been written yet.
1.1 Apologies were received from Councillor Williams.
2.1 Members confirmed the following declarations of personal interest: Councillor In Receipt of Pension Contributor Alfie Best NONE NONE Karl Gauden NONE Self, wife, step-daughter and step-daughter’s partner Jon Horlor NONE Self Nathan Yeowell Father and two other family members (aunts) Self 2.2 In addition to the above, Councillor Gauden declared an interest due to his work as a Unison Official. 2.3 The PS left the meeting.
3.1 The minutes of the meeting held on 11th December 2023 were confirmed as an accurate record.
4.1 The Committee noted the minutes.
5.1 The PM outlined the report and provided an update on the administration services provided by the Pension Section. 5.2 The PM highlighted a number of areas of current activity and development: · There were currently a total of 21,437 members registered for My Pension Online with 1090 of these members registering between October and February 2024. · There had been a second pension awareness session held for Torfaen County Borough Council which had 67 bookable appointments available. · There were a number of services offered as part of pension awareness day, such as helping members sign up to My Pension Online, discussing pension estimates and help with updating any personal details. · The pension fund has also held training for Monmouthshire County Council and are in discussions with Newport City Council to hold a Pension Awareness session with their staff in the summer. · Over the forthcoming months, the Fund will be concentrating on its communication approach, and will be looking at different ways that it can communicate with members and employers to ensure that all participating employers take up the pension awareness and training sessions that the Fund offers. · The Pension Fund completed their annual Cyber Security exercise with Heywood Pensions Technologies in December. This had been a positive exercise and ensured business plans in place were appropriately able to respond to a cyber-attack. · The McCloud Regulations were introduced in October 2023 and the pension administration system had now been updated to take this into account. · Appendix one showed the Data Improvement Plan. The common data results had improved and this was almost at 100%. 5.3 Following questions from the Committee, the PM made the following points: • My Pension Online allowed for the pension team to maintain stronger connections with pension recipients and contributors to the fund. • It was acknowledged that a number of members of the fund may not have access to online services, but efforts were made to stay in communication with these members via alternative methods. 5.4 The Pensions Committee noted the content of this report.
6.1 The HoP outlined the report and presented the Pension Fund annual budget for the financial year 2024/2025. This budget operated independently from and did not affect Torfaen County Borough Council’s revenue budget. 6.2 The key assumptions, on page 45 of the report, were driven by expert advice from independent advisors and the actuary. No material assumptions were made regarding changes in the upcoming year’s strategy due to uncertainty of what this may look like. Instead, the forecast was made considering the current position of assets. 6.3 Page 46 set out the Cash Investment Strategy 2024/2025. The flexibility of this strategy was increased following Pension Committee approval in November 2023 due to two previously unforeseen events leading to two of the Fund’s investment mandates being liquidated and cash returned. Whilst the held cash was still higher than it had been historically, some of these reserves had now been re-deployed into long-term assets per the Fund’s strategic allocation. The parameters surrounding the Cash Investment Strategy could be seen within the table at the bottom of page 46. 6.4 Page 47 showed the forecast income and expenditure for 2024/2025. This included equalisation receipts and payments, which were interest and entry costs into new investments. Entering an investment early incurred higher financial costs and risk, resulting in interest payments to the investor. Entering an investment late meant that other investors were paid for their evaluation uplift. The HoP stated that it was important to highlight these transactions, especially as the Fund continues to build its private market allocations and so equalisation will continue to occur in future. 6.5 The IA and Chair noted that this was a clear and transparent report. 6.6 Following questions from the Committee, the HoP & IA made the following points: • The predicted management expenses on page 50 was representative of the full value of the fund, including assets and increase in private market investments. • Real assets typically incurred higher management fees; however it was ensured that the best possible rates were secured across asset classes and the impact of LGPS pooling was also assisting by ensuring lower and competitive management fees. • Entering a fund at a later point could have benefits, as it allows greater visibility of the underlying investments and for an investors commitment to be put to work more quickly. . 6.7 The Pensions Committee noted the contents of this report and approved the Pension Fund budget for 2024/25.
Part of an issue followed across 2 meetings
7.1 The HoP outlined the report and provided an update on the Pension Fund investment performance for the period 1st October 2023 through to 31st December 2023 (Q4 2023), 7.2 The Fund had a positive return of 4.8% within quarter 4, however this slightly underperformed the benchmark. Long term returns could be seen on page 57 of the report, which was the primary focus to ensure the sustainability of the fund. The table on page 65 was a new introduction to the report to provide a list of investments. 7.3 The IA made the following points: · Most markets were beginning to improve due to the resilient consumer, but the UK equity market was an outlier in this regard, unable to compete with the technological boom. · The “Magnificent 7” stocks were now acting as the “Magnificent 4.” · The drive around AI seemed to be meaningful as there was both revenue and demand seen. · Strain from inflation was experienced differently by each consumer and it was unsure when inflation would start to reduce. · Geo-political issues, such as the unexpected conflict in the Middle East and the on-going war in Ukraine were still a factor. However, these had not significantly impacted markets historically. · There was not much demand for real estate currently. · 60% of active equity managers underperformed their benchmark within Quarter 4. · The Fund was on the correct side of current momentum. 7.4 The RA explained that each allocation in the portfolio had a benchmark. The figures within the report represented the averages of how these allocations performed against their individual benchmarks during the quarter. There had been consideration of adding another method to the report to show performance data. 7.5 Following questions from the Committee, the HoP, IA & RA made the following points: • Brexit represented a rare systemic change; therefore the US election would likely not have as much impact on markets. Whilst there was a level of uncertainty both before and immediately after the more recent election results, it was largely contained within markets. · The election was not expected to significantly impact the market, given the strength of the dollar, job retention rates, and the overall robustness of the market. 7.6 The Pensions Committee noted the investment performance that had taken place during quarter four of 2023.
8.1 The HoP outlined the report and provided an update on the contents of the Investment Strategy Statement and the revised changes ready for implementation from 1 April 2024. The policy had been revised following a comprehensive review of the Investment Strategy and Strategic Asset Allocation during 2023. The draft version had been considered by Local Pension Board and a number of changes had been made to reflect comments made. 8.2 Following feedback received within the consultation process, the Committee were asked whether they wished to emphasise that climate change could be considered both an opportunity as well as a risk, as the current draft of the Investment Strategy Statement implied, and this was agreed. The Chair suggested that the HoP consider this wording and circulate to members for information, but that the strategy did not need to be revisited in a committee meeting. 8.3 The Pensions Committee approved the revised Investment Strategy Statement.
9.1 The HoP outlined the report and provided a quarterly update to the Pension Committee on how the Pension Fund approaches its management of risk. Any changes or updates to the Risk Register were denoted in red text. In accordance with the Risk Management policy, there would be a detailed annual risk score assessment undertaken on both the operational and strategic risks contained within the Risk Register over the upcoming months. 9.2 The Pensions Committee noted the updated Risk Register.
10.1 The PM outlined the report and provided an update on the annual training programme. 10.2 If there was any specific training that members of the Committee wished to attend then this would be incorporated into the plan. There had been a session included on Cyber Security which would be an annual event. 10.3 The Pensions Committee agreed to note the training update.
11.1 The next meeting is scheduled to take place on 24/06/2024.
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.
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