Agenda item

The Committee considered a report of the Corporate Director of Resources which briefed the Committee on developments in matters that were both 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 main issues to highlight related to the Review of the LGPS 2022 Fund Valuations - Section 13 Report, and the Pensions Review, which had accelerated following the election of a new Government in May, noting that ‘Phase One’ of the review was to include the LGPS.  He reminded the Committee that issues within the review would include consideration of consolidation within the LGPS, and ‘local investment’, into regions of the UK.  He noted that there was a Government call for evidence and that given the short timescales, he would liaise with the Chair and Vice-Chair in terms of a response, with Partner Funds working closely with BCPP so that responses from across the Pool were broadly aligned. He added the response could be shared with Members, however, it was not practical to finalise in time for Committee.  The Chair noted that the work that had been undertaken over the last few years in terms of consolidation and pooling had meant that Durham was in a good position.  The Head of Pensions (LGPS) noted that the previous Local Government Minister had already been looking at issues of consolidation and pooling, and that there had already been broad alignment between Conservative and Labour on those issues prior to the general election. He added that the new Labour Government had moved quickly, including the call for evidence, with the direction of travel remaining broadly consistent.

Councillor J Atkinson noted the push for greater investment within the UK, however, he emphasised that while that could be beneficial the main concern was to create a return upon investments.  The Chair agreed and noted that the Committee had previously stated that any UK investment must be a good investment for the Fund. The Head of Pensions (LGPS) agreed, noting the fiduciary duty of the Committee and the primary responsibility in terms of ensuring sufficient funds to pay pensions and maintaining stability of contributions for scheme employers. He reminded the Committee of investments already made in terms of the UK, as well as the targets set by the Committee in that regard.  Councillor J Atkinson asked if the Advisors could give their opinion in terms of the Government’s push for Pension Funds to invest in the UK.  The Independent Pension Fund Advisor reiterated the fiduciary duty and noted some advantages of UK investment, noting as pensions were paid in sterling there was some benefit in that respect.  He reiterated the points made by the Head of Pensions (LGPS) in terms of UK investment already undertaken by the Committee, and that those investments had been taken by the Committee, without the intervention of Government, and he felt that the Committee could be confident in being able to justify they investment decisions in that regard.

Councillor K Earley noted a recent article in the Guardian newspaper which had referred to UK investment, which had a tone which appeared to be attempting to frame the debate. 

The Head of Pensions (LGPS) noted he had read the article, noting quotes from Northern Gritstone, a private asset management firm.  He reminded the Committee of the progress made with BCPP in terms of their £500million UK Opportunities Fund, in which Durham is an investor.

Councillor M Porter asked as regards the ‘white flag’ was part of the Section 13 Report from GAD. The Head of Pensions (LGPS) noted this related to deficit recovery and following discussions with GAD, they had given a white flag, adding there had been no red or amber ratings.

Resolved:

That the information contained in the report be noted.