Agenda and draft minutes

There were no apologies for absence.

There were no declarations of personal interest made at the meeting.

AGREED that the minutes ofAGREED that the minutes of the meeting for the Pension Board held on the 24^th July, 2024 be confirmed as a correct record.

 the meeting for the Pension Board held on the 24^th July, 2024 be confirmed as a correct record.

The Board considered the reports which were submitted to the Dyfed Pension Fund Committee for consideration at its meeting held on 19^th September, 2024, as follows:-

The Board considered the Dyfed Pension Fund Budget Monitoring report which provided an update on the latest budgetary monitoring and cash position as at 30^th June 2024.  The Committee was informed of an under spend compared to budget of £116k.

AGREED that the report be noted. 

The Board considered a report providing a progress update on the activities within the Pensions Administration service and included regulatory matters, breaches register, i-Connect, GMP reconciliation and workflows.

Reference was made to section 1c of the report – Pension Dashboards.  Clarification was sought on the paragraph ‘We must be in a position to go live on 1st October 2025, however, there must also be a 1-year lead in connection period which will start no later than 1st October 2024’.  The Pensions Manager explained that schemes were required to include a one-year lead in period.  In terms of the Dyfed Pension Fund Scheme, it was October 2025.  The backstop for all pension schemes was set at October 2026.  Therefore, between October 2024 and October 2025 a letter would be expected confirming the connection date.  Currently, data was being validated on the system to ensure that key pensions identifiers were on the system.  On going work was taking place with the software provider to ensure that data would be easily uploaded and extracted from the pensions system.  This work was being carried out in conjunction with the 3 AVC providers - Prudential, Utmost and Standard Life.

In response to a further query, the Pensions Manager assured the Board that all work was currently on target.

AGREED that the Pension Administration Report in relation to the Dyfed Pension Fund be noted. 

The Board received for consideration the Breaches Report in relation to the Dyfed Pension Fund. It was noted that Section 70 of the Pension Act 2004 sets out the legal duty to report breaches of the law. In the Code of Practice No. 14, published by the Pensions Regulator in April 2015, paragraphs 241 to 275 provide guidance on reporting these breaches.

It was noted there had been no cases of late receipt of contributions from Employers since the previous meeting.

AGREED that the Breaches Report in relation to the Dyfed Pension Fund be noted. 

The Board received for consideration a report providing an update on the Risk Register. 

The Board was advised that the Risk Register was a working document that highlighted all the risks identified in relation to the functions of the Dyfed Pension Fund.  It was noted that the register included details of all identified risks; assessment of the potential impact probability and risk rating; the risk control measures that are in place; the responsible officer and the target date (if applicable) and was regularly reviewed to ensure risks had been identified and assessed.

The register focused upon the 13 Funding and Investments risks (identified as risk numbers F1-F13 in the register) and it was confirmed that following a review of the register, there had been no changes to individual risks since the register had been approved at the Committee’s meeting in March 2024.

Reference was made to risk F4 within the report.  In relation to the risk, it was asked if steps had been taken to address the issues and how it could impact on the fund?  The Treasury & Pension Investments Manager explained that the Independent Investment Advisor presents an independent report on the performance of the fund on a quarterly basis to the Committee meetings.   With the majority of assets now invested within the Wales Pension Partnership (WPP), monitoring of sub funds takes place at the WPP Joint Governance Committee and the Dyfed Pension Fund Committee.

In response to a further query raised in respect of risk reference F4 and the concern in regard to the underperformance of Baille Gifford, the Treasury & Pension Investments Manager reported that Baille Gifford across the Global Alpha product, which was invested in via WPP, had been underperforming.  It was explained that the management of the Global Growth Fund sub fund which Baille Gifford was an underlying manager was moving from Waystone to Russell Investments.  In essence, this meant that Baille Gifford remained a manager within the sub fund, but the percentage of its holdings had reduced from 40% to 18%. 

Reference was made to risk reference G4 – ‘Lack of training for officers and members; turnover in officers and members….’.  It was asked if this was a concern?  The Treasury & Pension Investments Manager explained that since WPP was established in 2016 regular online training via the WPP for Committee and Board members had increased. The amount of training now being provided is deemed sufficient for the current needs of the Committee and Board.

Agreed that the risk register report be noted. 

The Board received an update on the Training Plan for 2024-2025 which detailed the schedule of committee meetings, and training events for members and officers of the Dyfed Pension Fund.

AGREED that the update on the Dyfed Pension Fund Training Plan for the period 2024/25 be noted. 

The Board received the report submitted to the Dyfed Pension Fund Committee on the Board’s referral from its meeting held on the 14^th May, 2024 relating to correspondence from Councillor A. Lenny on the Wales Pension Partnership’s investment in the Bute Group of companies and its Tywi-Usk and Tywi-Teifi energy projects.

The Board was informed that the Pension Committee would be issuing a response to the resolution at its next meeting.

AGREED that the report be noted

The Board received for consideration an update from the WPP’s JGC meeting held on the 17^th July 2024 providing an update on the following:

·           Governance

·           On-going Sub-Fund Development

·           Operator Services

·           Investments and Reporting

·           Communication and Training

·           Resources, Budget and Fees

·           Training Plan

The report incorporated the Operator report providing an update on the following: 

-   Market Updates

-   Business Update – Oversight of Third Parties Q1 2024

-   WPP Sub-Gund Values as at 31 March 2024

-   March 2024Fund Snapshot – Equities and Fixed Income

-   Fund Launches and Changes

-   Waystone Corporate Update & Engagement

The report also appended a summary and commentary on WPP’s investment performance for Q1 2024 (January – March 2024).

AGREED that the update report on the WPP’S JGC meeting held on the 17^th July 2024 be noted

The Board received the WPP’s Responsible Investments update report as at 30^th June 2024 detailing recent Responsible Investments activity together with information on the following Sub-Funds in which the Dyfed Pension Fund had invested:

·       Global Growth

·       Sustainable Active Equity

·       Global Credit

In addition to the above, the update also provided a Stewardship Summary together with the relevant appendices numbered 1-4 within the report.

AGREED that the Wales Pension Partnership’s Responsible Investments update report as at 30 June 2024 be noted.

AGREED that the draft minutes of the meeting of the Dyfed Pension Fund Committee held on the 19^th September, 2024 be noted. 

The Board considered the Pension Board Budget Monitoring report for the period 1^st April 2024 – 30^th September 2024. Total actual expenditure incurred was £12.8k.  The expenditure for the year was forecast to be below budget by £2.5k.

AGREED that the report be noted. 

The Board considered the Pension Board Work Plan for 2024 which outlined the work of the Pension Board throughout 2024 and the items to be presented at each meeting. It was noted the Plan was reviewed at each Board meeting and revised as necessary.

AGREED that the Pension Board Work Plan for 2024 be noted.

The Board considered the Pension Board Work Plan for 2025 which outlined the work of the Pension Board throughout 2025 and the items to be presented at each meeting. It was noted the Plan was reviewed at each Board meeting and revised as necessary.

AGREED that the Pension Board Work Plan for 2025 be approved.

The Board considered the Pension Board Action Log that included details of actions and updates from previous meetings. It was noted the log was reviewed at each Board meeting and updated as necessary.

AGREED that the Pension Board Action Log be noted.

THE REPORTS RELATING TO THE FOLLOWING ITEMS ARE NOT FOR PUBLICATION AS THEY CONTAIN EXEMPT INFORMATION AS DEFINED IN PARAGRAPH 14 OF PART 4 OF SCHEDULE 12A TO THE LOCAL GOVERNMENT ACT 1972 AS AMENDED BY THE LOCAL GOVERNMENT (ACCESS TO INFORMATION) (VARIATION) (WALES) ORDER 2007. IF, FOLLOWING THE APPLICATION OF THE PUBLIC INTEREST TEST, THE COMMITTEE RESOLVES PURSUANT TO THE ACT TO CONSIDER THESE ITEMS IN PRIVATE, THE PUBLIC WILL BE EXCLUDED FROM THE MEETING DURING SUCH CONSIDERATION.

RESOLVED, pursuant to the Local Government Act 1972, as amended by the Local Government (Access to Information) (Variation) (Wales) Order 2007, that the public be excluded from the meeting during consideration of the following items as the reports contained exempt information as defined in paragraph 14 of Part 4 of Schedule 12A to the Act. 

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute Item 9 above, to consider this matter in private, with the public excluded from the meeting as disclosure would adversely impact upon the Pension Fund by putting investment performance at risk.

The Board considered the Robeco Engagement report for the period 1^st January 2024 – 31^st March 2024.

AGREED that the report be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute Item 9 above, to consider this matter in private, with the public excluded from the meeting as disclosure would adversely impact upon the Pension Fund by putting investment performance at risk.

The Board considered the Northern Trust Securities Lending Performance Review report for 2023-24.

AGREED that the report be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute Item 9 above, to consider this matter in private, with the public excluded from the meeting as disclosure would adversely impact upon the Pension Fund by putting investment performance at risk.

The Board considered the Independent Investment Adviser Performance and Risk Report which provided details in relation to the Investment Managers’ performance for the quarterly, 12 month and rolling 3 year period ending 30th June, 2024.  The report also included the global market background and issues for consideration.

AGREED that the Independent Adviser Performance & Risk report as at 30^th June, 2024 be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute Item 9 above, to consider this matter in private, with the public excluded from the meeting as disclosure would adversely impact upon the Pension Fund by putting investment performance at risk.

The Board considered a report providing an update on Investment Manager performance as at 30^th June, 2024 in respect of:

·   BlackRock – Quarterly Report 30 June 2024;

·   Schroders – Q2 2024 Investment Report;

·   Partners Group – Quarterly Report Q2 2024;

·   WPP Global Growth Fund – 30 June 2024;

·   WPP Global Credit Fund – 30 June 2024

·   WPP Sustainable Active Equity Fund – 30 June 2024.

AGREED that the Investment Manager Reports for the Dyfed Pension Fund be noted.

Following the application of the public interest test it was UNANIMOUSLY RESOLVED, pursuant to the Act referred to in Minute Item 9 above, to consider this matter in private, with the public excluded from the meeting as disclosure would adversely impact upon the Pension Fund by putting investment performance at risk.

The Board considered the Northern Trust Performance report which detailed the performance of the Dyfed Pension Fund as at 30^th June, 2024.  The report provided performance analysis at a total fund level and by Investment Manager for the periods since inception.

AGREED that the Northern Trust Performance report for the Dyfed Pension Fund as at 30^th June, 2024 be noted.

The Board received a report from the Independent Chair, providing an update from the Pension Board meetings held on the 14^th May 2024 and 24^th July, 2024 where the items discussed included:

• Pension Board Chair Report 14 May 2024 & 24 July 2024
• Budget Monitoring and Cash Position 30 June 2024 
• Pensions Administration Report
• Breaches Report
• Risk Register
• Training Plan 2024-2025
• Pension Board Resolution
• WPP Joint Governance Committee (JGC) Update
• WPP Responsible Investment Update - June 2024

AGREED that the Dyfed Pension Fund Pension Board Reports, for the 14^th May and 24^th July, 2024 be noted.