Agenda item

The Board is invited to review the final position against the Annual Business Plan for 2021/22 as considered by the Pension Fund Committee at their meeting on 4 March 2022, and the new Business Plan agreed for 2022/23, and to offer any comments to the Committee.

The report set out the business plan and budget for the Pension Fund for 2022/23. It followed on from the Workshop held on 4 February 2022 to which all Members of the Pension Fund Committee and the Local Pension Board were invited.

The Plan detailed the key priorities for the Fund as agreed at the workshop, the key service activities for the year, and included the proposed budget and cash management strategy for the service.

The Board was provided with an update of the four key service priorities set for 2020/21: -

·       Delivering Key Progress on the Implementation of the Climate Change Policy - There had been a lot of progress in this area, and this would be carried forward to the 2022 Business Plan. Investing in climate solutions was the only area of shortfall and this would be picked up.

·       Delivering further improvements to the governance arrangements of the Fund – The Board was informed that all key measures of success against this priority which had been recommended by the Hymans Robertson review had been delivered with the exception of the appointment of the new Governance and Communications Team Leader which was being progressed.

·       Further improving the data management arrangements between the Fund and scheme employers and scheme members – The Board was informed the measure associated with improving customer satisfaction scores through the customer survey had been amended to Red reflecting the very low numbers of surveys returned, which meant there had been no meaningful feedback. Central guidance was still awaited on the implementation of the remedy to age discrimination identified in the McCloud case. 

·       On reviewing the reporting arrangements with Brunel following the transition of the majority of Fund assets to Brunel portfolios – Brunel were currently taking this forward to improve the quality of the quarterly performance reports.

Discussion took place on the low returns on the customer satisfaction survey and it was suggested the Board Members complete the survey. The Board was informed that in next Year’s Business Plan would include how communication could improve with scheme members. The impact of responses being made on-line was discussed and whether this was a reason for a poor response.

The Board was informed that there was a general lack of knowledge of pensions amongst some scheme members and this needed to be addressed to increase scheme member participation.

The Service Manager for Pensions Insurance and Money Management reported that as a result of the Workshop held on 4 February 2022, the priorities, resources and measures of success were agreed, and they have been incorporated into the draft Business Plan and Budget for 2022/23. The focus was on four key priorities:-

·       Reviewing the scheme data

·       Delivering a holistic approach to technology (including cyber security)

·       Enhancing the delivery of the responsible investment priorities. This included the continuation of the current work on implementing the Climate Change Policy, but also looking to widen the focus to the rest of the environmental issues facing the Fund, alongside the key social and governance issues. ESG was wider than just climate, there was Biodiversity, Social and Governance issues, the war in Ukraine and the impact on investments in Russia and risks associated with emerging markets

·       Improving the delivery of service performance to scheme members and ensuring service standards were consistently maintained. The objective of the Fund was to pay scheme members accurately. In 2021/22 performance levels dropped due to staffing shortages in the team. The Pension Fund Committee requested that service standards were consistently maintained throughout the year.

The Board was informed that the appointment of new staff required the new staff being trained, which put a burden on other team members. Update reports would be submitted to both the Board and the Pension Fund Committee on progress made.

Reference was made to the service priority of enhanced delivery of Responsible Investment responsibilities, and the appointment of the Responsible Investment (RI) Officer. The Board was informed that subject to the recruitment process, it was expected that reports from RI would be submitted to the Board.

The Board noted the report and the following decisions made by the Pension Fund Committee:

“(1) That the progress against the service priorities for 2021/22 be noted.

(2) That approval be given to the Business Plan and Budget for 2022/23 as set out in Annex 1 of the report.

(3) That approval be given to the Pension Fund Cash Management Strategy for 2022/23.

(4) That delegated authority be given to Director of Finance to make changes necessary to the Pension Fund Cash Management Strategy during the year, in line with changes to the County Council’s Treasury Management Strategy.

(5) That delegated authority be given to the Director of Finance to open separate pension fund bank, deposit and investment accounts as appropriate.

(6) That delegated authority be given to the Director of Finance to borrow money for the pension fund in accordance with the regulations.”