Agenda item

The Head of Pensions, Mark Whitby, introduced the report (copies of which had been previously circulated).

The Board were informed that the Northamptonshire Pension Fund Annual Business Plan and Medium-Term Strategy had been approved by  the Pension Committee in March 2021. The plan outlined the structure of the operation which was administered for Cambridgeshire and Northamptonshire under a shared service arrangement and employed 70-80 staff. The report set out the valuation of the fund and the investment total which was around £3 billion. The plan outlined the key challenges and influences for the fund over the next 3 years. The management expenses were around £3-4 million, a significant amount of this was spent on consultancy fees and legal advice. By the end of the year the predictions for the contributions cash flows are generally quite accurate, however the investment income was difficult to predict due to the changes in the capital value of assets. The Actuary calculated the expected average investment growth figure.

Further to an enquiry from Kevin Standish-Day, Mark Whitby advised that the accounts were in the process of being closed down so a forecast amount had to be included until they had been audited. For future years an estimate was provided.

Councillor Ken Pritchard queried the variance in the forecast and the actual figures for 2021. Mark Whitby explained that this was due to profit and loss and as the growth of the fund had been 40-50% higher than expected. The forecast for the following year reverted to the long term forecast, before the return of income from the investments. The final figures would be submitted to the Pension Committee in July. Page 31 of the Plan provided at analysis of each activity. Preparation work was being undertaken following the expected changes to legislation as a result of the age discrimination remedy. Assets were pooled in order to gain economies of scale in the ACCESS pool. A Joint Committee with representation from each Fund had been formed to oversee the governance of the pool.

With regard to the changes brought about from the local government reorganisation, Mark Whitby advised that the form of the committees had been retained but the membership adjusted for the 2 authorities. A great deal of work had been undertaken in relation to the governance arrangements and there would be a considerable amount of work involved in moving all the data relating to employees from the sovereign councils to their new employers.

Kevin Standish-Day enquired about the review of the responsible investment policy; Mark Whitby advised that the draft had been submitted to the last Pension Committee and it had been sent out for consultation. Around 30,000 emails being sent and approximately 150 responses received, which was remarkably high for such a consultation. The majority of respondents had agreed rather than disagreed to the principles within the review, the policy would be submitted to the Pension Committee for approval in due course.

Mark Whitby reported that he was the Chair of a task and finish group regarding the guidelines for the asset pool. The Local Pension Board and Pension Committee would be informed of the feedback from this group. Kevin Standish-Day queried what the investments were within the asset pool. Mark Whitby explained that this information was submitted to the Pension Committee as a confidential report and only identified as a line item; however he would consider the suggestion. Mark Whitby advised that it was important for Members of the Pension Committee to receive training regarding the decisions that will need to be taken. The Actuary would be in attendance at the Pension Committee and Officers would make recommendations as to what investments should be selected. Members of the Board were welcome to attend Pension Committee meetings to listen to information being provided by external advisors as they deemed appropriate.

Further to an enquiry from Councillor Ken Pritchard, Mark Whitby explained that voluntary contributions were being kept under review as the main provider, Prudential, had experienced some performance issues recently.  

It was noted that the Business Plan was reviewed constantly and progress was delivered to the Committee and Board every quarter. 

RESOLVED:  That the Pension Board noted the Pension Fund Annual Business                  Plan and Medium-Term Strategy.