Agenda item

SUMMARY OF THE PENSION FUND COMMITTEE MEETING OF 15 DECEMBER 2023

This report provides the Local Pension Board (the Board) with a summary of the Surrey Pension Fund Committee (the Committee) meeting held since the last meeting of the Board.

 

Minutes:

Speakers:

Nick Harrison, Chair Surrey Pension Fund Committee

Neil Mason, Assistant Director, LGPS Senior Officer

 

Key points raised during the discussion:

1.    The Chair of the Surrey Pension Fund Committee introduced this report and highlighted the following items:

a)    That MySurrey had already been discussed under the Tracker item in this agenda.

b)    That funding level was 140% which does change very rapidly with the various changes in interest rates so to be taken with a great deal of caution.

c)    The Committee spent some time discussing ESG and responsible investments and there was a discussion on private markets which was helpful.

2.    The LGPS Senior Officer reported that the Service Delivery Team had been shortlisted for Administration at the Pensions Age Awards.  This was testament to the good work undertaken by the Head of Service Delivery and his team.

3.    The LGPS Senior Officer also highlighted areas within the report which included:

a)    Approval of a pass-through arrangement, which will be of interest to employer representatives on the Board. This means that when the Council lets contracts, essentially the risk is retained by the Council. The pensions risk is retained by the Council.

b)    The Committee had requested officers to analyse the impact of divesting from the 25 largest fossil fuel companies, so there will be a piece of analysis as to the impact assessment on that.

c)    That the Scheme was now, after the advice of an Islamic cleric, considered to be Shariah compliant.

d)    He explained work from the Scheme Advisory Board (SAB) regarding funding levels and to look at what scope there was for changes to relationships between employers and the funds.  The SAB concluded that any changes to contribution rates from employers should not be on the basis of economic factors altering funding rates. Therefore, the position of the fund is that it has the same amount of assets as before the last valuation, but it is the long term gilt yield which is driving down the discount rate. So that the value of future benefits has reduced.

e)    The Committee also received a paper that summarised the government's response to the consultation on pooling and highlighted the following from it:

  1. the view is that this is on a comply basis and not on a statutory requirement at the stage.
  2. the government expects all assets to be pooled by April 2025.
  3. It is expected that there will be a smaller number of pools with an optimal size of £200 billion.
  4. It has also laid out its expectations for funds to provide in their investment strategy statement some explanation of how they will meet a 5% commitment to levelling up.
  1. In response to a Member query about the pass-through and what happens when a contractor leaves the Scheme the LGPS Senior Officer explained that as long as a contractor had paid their contributions they simply walk away and there was no exit correction contribution.

 

Actions/ further information to be provided:

None.

 

Recommendations:

 

That the report be noted and there were no recommendations to be made to the Pension Fund Committee.

 

Supporting documents: