Agenda item

The Board considered a report from the Corporate Director of Resources which provided details on developments in matters that were both Local Government Pension Scheme (LGPS) specific, as well as providing an update on non-LGPS specific matters of interest (for copy see file of Minutes). 

The Head of Pensions (LGPS) noted that the Minister had expressed a degree of frustration with progress in terms of pooling, with the deadline of 31 March 2025 being given for the completion of pooling.  He noted the Board were already aware that this was not an issue for Durham, having worked with BCPP in terms of pooling well in advance of this date. 

Councillor A Hopgood asked if a change in Government could lead to a change in direction.  The Head of Pensions (LGPS) noted that the Opposition had indicated they would go ‘further and faster’ and that the expectation currently was that the 2025 deadline would be ‘comply or explain’ deadline, with an expectation that Funds would comply, with there being powers of intervention.  He added the Minister had put the question, whether 87 Pension Funds across the LGPS was the correct number and the Minister had outlined a desire for greater LGPS allocations that support the Levelling Up missions; with targets of 10 percent in private equity.

The Head of Pensions (LGPS) added the Chancellor had mentioned such ‘levelling up’ support could be investment in Children’s Homes.  He noted that Durham had a five percent investment in terms of ‘local investment’ and were in a sense ahead of the curve in this regard.  He noted there were further options in terms of BCPP’s UK Opportunities Fund, with a significant investment from Durham.

Councillor A Hopgood noted that whilst local investment was to be commended, however, the primary role of the Fund was to ensure that pensioners were able to receive their pensions.  The Head of Pensions (LGPS) agreed, outlining the Fund’s responsibility to try and keep pension contributions as stable as possible.  He noted that through BCPP’s UK Opportunities Fund it was hoped that the Fund could achieve some secondary, positive, benefits in the UK; whilst prioritising investment returns.

In relation to the McCloud judgement, the Head of Pensions (LGPS) noted he had attended a meeting hosted at the West Yorkshire Pension Fund and took reassurance that Funds’ progress was broadly linked to the availability of software solutions; with only two software providers in this particular area, and therefore the position would likely be for a similar for Funds in the sector until September/October 2024.  He added that in the meantime, work was continuing on the data to implement the changes, with three experienced existing staff being allocated to this task.  He noted their positions would be backfilled, with a large number of candidates having come forward for those posts. The Pensions Team Leader noted that the recruitment exercise had been extremely encouraging, with around 50 applicants, many with finance and pensions experience, adding it was often difficult to get candidates with either. Councillor A Hopgood noted that Council jobs being advertised more widely, through sites such as Indeed, as well as the usual North East Job Spot, was helping to reach more potential applicants. The Head of Pensions (LGPS) noted that there was no additional funding for the work generated by McCloud with the costs met by the Pension Fund.

In respect of the Pensions Dashboard, the Head of Pensions (LGPS) noted the links to the Government site, with work being undertaken in terms of a data improvement exercise in advance. 

Councillor A Hopgood asked if Council Tax data could be used, or whether there could be GDPR implications. The Head of Pensions (LGPS) noted that it was possible to use the published electoral roll, however, he would consider further regards what information could be queried, adding that it was those outlier cases that usually took up the most time and effort to confirm.

The Head of Pensions (LGPS) noted the update in respect of Sharia Law, namely that the expert advice sought had been that the LGPS was compatible with Sharia Law and therefore it was hoped this would encourage more take up of the LGPS for Muslim colleagues in local government.  Councillor A Hopgood asked if those Muslims that had not taken up the offer to join the LGPS had been given another option - the Head of Pensions (LGPS) noted they had not.

The Head of Pensions (LGPS) noted that guidance for Annual Reporting was expected soon in terms of KPI data, with a move to standardise indicators across the LGPS. It had been suggested that there would be a significant number of indicators.  He noted that the requirement for the 2024/25 Annual Report was on a best endeavours basis only, being the first year of the requirement.

In relation to the Pensions Code of Practice (COP 14), the Head of Pensions (LGPS) explained that the Regulator had condensed all codes in the sector down to one document, which would include applicability for LGPS Pension Funds. He added that Officers were actively reviewing the new code, to see which elements did or did not apply to LGPS Funds, which would not apply and those which would be considered ‘best practice.  He added that he would report back to the Board with a plan in respect of the new Code in due course, noting that the Pensions Team Leader was working on a gap analysis and looking at tools and monitoring.

RESOLVED:

That the report be noted.