Agenda and minutes

To note any changes in membership of the Committee made in accordance with Part 4B paragraph 5 of the Constitution.

No apologies or changes in membership were received. It was noted that there had been changes to the membership of the committee following the annual meeting of the Full Council on 18 May 2023.

To confirm as a true record the Minutes of the meeting held on 8 February 2023.

RESOLVED:

THAT the minutes of the meeting held on 8 February 2023 be approved.

To invite Members to declare any interest they might have in the matters on the agenda.

No declarations were received at this stage.

Questions may be asked without notice but to guarantee a full reply at the meeting, a question must be put including the name and address of the questioner by delivery in writing or by email to Democratic Services at democratic.services@iow.gov.uk, no later than two clear working days before the start of the meeting. Therefore the deadline for written questions will be Friday 19 May 2023.

No public questions were received.

To receive and note the draft minutes of the meeting of the Local Pension Board held on 5 April 2023. 

Consideration was given to the draft minutes of the meeting held on 5 April 2023. No comments or questions were raised, and the draft minutes were noted.

RESOLVED:

THAT the draft minutes of the Local Pension Board be noted.

To receive and accept the Local Pension Board Annual Report 2022-23, and to approve its publication in the Pension Fund’s Annual report and accounts for the year ended 31 March 2023, in due course. 

The chairman of the Local Pension Board presented the annual report and drew attention to key areas including governance changes, risks, and responsible investment. The committee noted that an employer representative seat on the Board (previously held by an elected councillor) had become vacant, and the chairman agreed to ensure that work to appoint a replacement would be progressed. The committee thanked the Board and accepted the report.

RESOLVED:

THAT the Local Pension Board Annual Report 2022-23 be approved for publication within the Pension Fund’s annual report and accounts for the year ended 31 March 2023.

To receive a short briefing session on the Pensions Regulator’s code of practice in respect of reporting breaches of the law, and to adopt the updated Recording and Reporting Breaches of the Law policy for the fund, on recommendation from the Local Pension Board.

This item was deferred to a later date due to the unplanned absence of a key member of staff.

To adopt the updated Pension Administration Strategy, on recommendation from the Local Pension Board.

The Pensions Manager presented the draft Pensions Administration Strategy for the fund, as recommended for adoption by the Local Pension Board.

Questions were raised regarding the review being significantly overdue due to capacity issues and whether this had been addressed.Comments were made in relation to the support for employers of the fund.

RESOLVED:

THAT the Pension Administration Strategy be adopted and be agreed for publication on the fund’s website.

To adopt the revised risk register for the fund, on recommendation from the Local Pension Board.

Consideration was given to the revised risk register, as agreed by the Local Pension Board at its meeting held on 5 April 2023. Attention was drawn to the consolidation of risks (and overall reduction in number of risks) which would support more efficient management and monitoring. No comments or questions were raised.

RESOLVED:

THAT the changes to the risk register following review by the Local Pension Board be accepted, and the updated risk register (as presented at Appendix 1) be adopted.

To receive and note a verbal update on the conclusion of the external audit of the pension fund’s accounts, and delays to the publication of the annual report and accounts for the pension fund for the year ended 31 March 2022.

The Pension Fund and Treasury Management Accountant provided a verbal update on the progress towards the completion of the Isle of Wight Council’s audit (which included the fund’s accounts), and it was advised that the matter was ongoing. Discussion took place regarding the national auditor resource issue, particularly the knock-on impact that this was likely to have on future years’ audits. The committee received a verbal update on the agreement of the opening position of the council’s accounts..

RESOLVED:

THAT the updates be noted.

To note the completion of the 2022 actuarial valuation of the fund, and to confirm the publication of the final valuation report.

Consideration was given to the report which confirmed the completion of the triennial valuation at 31 March 2022 for the fund, the publication of the final actuarial report, and the publication of the Funding Strategy Statement arising from that valuation. 

RESOLVED:

THAT the completion of the triennial valuation at 31 March 2022, the publication of the report on the actuarial valuation at 31 March 2022, and the publication of the Funding Strategy Statement March 2023, be acknowledged.

To receive a presentation from UBS on the fund’s climate aware passive global equity portfolio.

The Senior Portfolio Manager and the Client Relationship Manager from UBS were in attendance to deliver a presentation on the fund’s climate aware passive global equity portfolio. This included an overview of climate strategy performance comparisons, performance attributions, research initiatives, and the metrics used in portfolio construction. Discussion took place regarding engagement with companies and questions were raised regarding data centres.

RESOLVED:

THAT the presentation from UBS on the fund’s climate aware passive global equity portfolio be noted.

To receive a verbal update on committee members’ training and an update on any training events, meetings, including development sessions and fund manager presentations.

This item was deferred to a later date due to the unplanned absence of a key member of staff.

To receive and confirm the draft workplan for the pension committee for the financial years 2023-2025.

Consideration was given to the draft workplan for the Committee for the financial years 2023-2025. The committee noted the revised presentation of the workplan.

RESOLVED:

THAT the workplan be noted.

To receive and note the reports from the fund’s investment consultants:

Consideration was given to the reports for the quarter ended 31 March 2023, which included investment assets and a summary of market returns, capital market outlook, asset allocation, fund performance, and fund manager analysis. Attention was drawn to the completion of the UK equity transition from Liontrust to BlackRock. Discussion took place regarding the property portfolio (particularly in relation to office space and warehouses).

RESOLVED:

THAT the updates on investment performance and funding level be noted.

To note the items circulated to committee members since papers were published for the last committee meeting, for information.

The committee noted the items circulated for information since the last meeting. No questions were raised at this stage.

RESOLVED:

THAT the items circulated for attention be noted.

A question may be asked at the meeting without prior notice but in these circumstances there is no guarantee that a full reply will be given at the meeting. To guarantee a reply, a question must be submitted in writing or by email to democratic.services@iow.gov.uk no later than 10.00am, Monday 22 May 2023.

Cllr Brading asked an oral question regarding the eligibility of Isle of Wight Council staff benefits and whether this should be extended to former members of staff who are also members of the pension scheme. The chairman agreed to seek a written response.

Cllr Critchison asked an oral question regarding the fund's stance on divesting from fossil fuels and Israeli companies in support of the Palestine. The chairman agreed to seek a written response.

To consider passing a resolution that, under Section 100(A)(4) of the Local Government Act 1972, the public and press be excluded from the meeting for the following item of business, namely agenda item(s) 18 to 20 on the grounds that there is likely to be disclosure of exempt information as defined in paragraphs 3 of Part 1 of Schedule 12A of the Act and in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED:

THAT the public and press be excluded.

To receive and note the presentation from the fund’s investment consultants, Hymans Robertson LLP, and to consider the recommendations for changes to the strategic asset allocation.

Consideration was given to the confidential report from Hymans Robertson, which set out the second stage of the review of the fund’s investment strategy (following the results of the 2022 actuarial valuation). The committee received a presentation which summarised the review and advised the committee on the preferred strategic asset allocation as it related to growth assets, income assets and protection assets. Discussion took place and it was agreed that the proposed recommendations would be agreed.

RESOLVED:

i)               THAT the presentation from the fund’s investment consultants and review the results of the asset liability modelling exercise, be received and noted.

THAT the preferred strategic asset allocation as recommended by the fund’s investment consultants, be adopted.

To receive and note the update on activity with the ACCESS pool.

Consideration was given to the confidential report on ACCESS pool activities since the last meeting and the committee noted the key updates arising from the meeting of the ACCESS Joint Committee meeting held on 6 March 2023.

RESOLVED:

THAT the updates from the ACCESS Joint Committee meeting held on 6 March 2023 be noted.

To receive and note an update on procurement and contract management activity.

Consideration was given to the confidential report which summarised the activity undertaken in the review of existing contracts, progress with previously reported procurement activity, and planed activity for the next financial year.

RESOLVED:

i)               THAT the contract management and procurement activity undertaken since last reported in February 2023, be noted.

THAT the previously agreed extension of the investment consultancy contract will expire on 9 July 2024, not 1 January 2024, be confirmed.

To approve the submission of the MiFID II professional status option questionnaire to Hymans Robertson.

The Pension Fund and Treasury Management Accountant presented the report which outlined the requirement for the Council, as administering authority for the Isle of Wight Pension Fund, to resubmit its election for professional investor status. Consideration was given to the submission of the MiFID II professional status option questionnaire.

RESOLVED:

THAT the election for professional investor status be approved, and the Pension Fund Manager be authorised to submit the option form to Hymans Robertson and to other investment counterparties as may request such election.