Issue - meetings

(This item will include a presentation by the Director of Corporate Resources. Those in attendance will have the opportunity to ask questions concerning the Annual Report and Accounts. Those unable to attend are asked to forward any questions they have to democracy@leics.gov.uk by 12 noon on Friday 6 December)

(This item will include a presentation by the Director of Corporate Resources. Those in attendance will have the opportunity to ask questions concerning the Annual Report and Accounts. Those unable to attend are asked to forward any questions they have to democracy@leics.gov.uk by 12 noon on Friday 6 December)

A presentation by the Director of Corporate Resources was given on the Annual Report and Accounts of the Pension Fund 2023/24. A copy of the report marked ‘Agenda Item 6’ and presentation is filed with these minutes.

During delivery of the presentation, the following points made:

i.          As of 31 March 2024, there were exactly 107,000 scheme members, and the scheme size continued to grow.

ii.          There were over 3,000 retirements in the year, with 9,552 new starters.

iii.          The Pension Fund as at 31 March 2024 was circa £6.5billion, which was 50% bigger than March 2020.

iv.          Whilst some Key Performance Indicators (KPIs) were slightly lower than target, when looking at the number of scheme Members and the complexity of the scheme regulations that changed during the 2023/24 financial year due to the McLoud Sargeant Judgement, the figures were quite impressive and showed a strong year of performance in total.

v.          Almost 60% of the Fund was classed as pooled, with the remaining investments being funds with external managers moving on to uncalled commitment (credited amounts to managers to be called down over time whenever they need that money to invest).

vi.          The Government recently launched its Fit for the Future consultation on three main proposals, which were the reforming of LGPS asset pools, boosting LGPS investment in the localities and UK, and strengthening governance of administering authorities. Feedback on the consultation would be provided by the Authority by the deadline of 16 January 2025.

vii.          Progress against the Net Zero Climate Strategy was positive, in that progress towards net zero had already exceeded initial expectations against two primary targets:

·       A reduction in weighted average carbon intensity by 50% - this had already reduced by 52.8% versus the 2019 baseline so was way ahead of the 2030 target.

·       A target reduction in financed emissions of 40% with an actual reduction of the total of carbon emissions by 40.4% from the 2019 baseline.

viii.          All progress towards Net Zero was against a backdrop of increasing assets under management that were continuing to outperform market benchmarks, which showed the Fund was continuing positive climate actions in a way that was supportive of its fiduciary duty.

ix.          The Fund continued to engage on a whole host of environmental, social and governance issues. One method was through voting with over 125,000 resolutions made over the past year and those were votes that the Fund expected Managers to support the long-term economic interests of its stakeholders, and to ensure that boards and directors were accountable to shareholders.

In response to questions raised, the following points were made:

x.          A member observed that the Committee and Board members came from varying different backgrounds with varying different skills, and noted that the extensive training programme in person and online, that members undertook had not been included in the presentation, and gave reassurance to scheme members that the pension regulations were observed by all Committee and Board members.

xi.          A member congratulated officers on the speed in which they had managed the implementation of the McCloud judgement, and how they had managed the extensive, complicated exercise with no additional resources.

xii.          A member questioned if, at the age of 55, a person chose to take a portion of their own pension pot, therefore reducing the final balance of their pension fund, if inheritance would also be reduced. It was explained that there would be scenarios where people would need to consider their overall estate, and inheritance was just one element of that. It was further noted that pensions officers were not financial advisors, therefore had to be  ...  view the full minutes text for item 6