Agenda and draft minutes

To receive any apologies or substitutions for the meeting.

Apologies for absence were received from Cllr Vijay Manro, Cllr Stuart Wheeler and Karl Read.

To approve and sign as a true and correct record the Part I (public) minutes of the previous meeting held on 6 March 2025.

The minutes of the meeting held on 6 March 2025 were presented for consideration.

After which, it was,

Resolved:

To approve and sign the minutes as a true and correct record.

To receive any declarations of disclosable interests or dispensations granted by the Standards Committee.

There were no declarations of disclosable interests.

To receive any announcements through the Chairman.

At the conclusion of the meeting, the Chairman announced that this would be his last meeting and that he would not be standing in the upcoming election after a year of consideration. The Chairman thanked officers for their work and support over the past years as well as professional advisors and the Members with the importance of the work conducted by the Committee stressed.

Cllr Kevin Small thanked the Chairman on behalf of the Committee for his work, wishing him an enjoyable retirement having been a very knowledgeable and diligent Chairman who would be a loss to the Committee and Council.

To review progress on any actions requested by the Committee in previous meetings.

The Committee reviewed the Actions Log with clarity sought regarding how far short the Fund was from meeting its 5% strategic asset allocation to affordable housing. It was noted that this allocation was currently £40million short of the 5% allocation, however authorisation had been granted by the Committee to increase allocations to an existing manager, with the final stages of this process taking place. It was hoped that this appointment would be fully completed by April.

To receive the minutes of the meeting of the Local Pension Board held on 11 February 2025. To review the summary of the recommendations made by the Board.

The Committee noted the minutes of the meeting of the Local Pension Board held on 7 November 2024.

The Council welcomes contributions from members of the public.

Statements

If you would like to make a statement at this meeting on any item on this agenda, please register to do so at least 10 minutes prior to the meeting. Up to 3 speakers are permitted to speak for up to 3 minutes each on any agenda item. Please contact the officer named on the front of the agenda for any further clarification.

Questions

To receive any questions from members of the public or members of the Council received in accordance with the constitution.

Those wishing to ask questions are required to give notice of any such questions in writing to the officer named on the front of this agenda no later than 5pm on Thursday 13 March 2025 in order to be guaranteed of a written response. In order to receive a verbal response, questions must be submitted no later than 5pm on Monday 17 March 2025. Please contact the officer named on the front of this agenda for further advice. Questions may be asked without notice if the Chairman decides that the matter is urgent.

Details of any questions received will be circulated to Committee members prior to the meeting and made available at the meeting and on the Council’s website.

No statements or questions were submitted.

A report from Barnett Waddingham on approach to setting the key assumptions for the triennial valuation. This includes training on assumption setting.

Lucy Byrne and Melanie Durrant (Barnett Waddingham) introduced a report on the approach to setting the key assumptions for the triennial valuation.

A presentation was provided, which included but was not limited to the following points:

·       An explanation of a funding valuation was provided including how liabilities, assets and employer results are used.

·       The process of valuing liabilities for each employer was outlined as well as how assumptions were used to calculate the probabilities of benefits being paid.

·       Contribution rates and affecting factors were outlined as well as how this linked to employer covenant.

·       Employer covenant analysis was provided with organisations ranked as low, medium or high risk.

·       Detail was provided on actuarial assumptions and how these were generally categorised as financial or demographic assumptions.

·       An explanation of discount rate was provided.

·       The funding methodology used by Barnett Waddingham was outlined.

·       The possible impact on the 2025 valuation results was discussed with it anticipated there would be a small overall improvement in the funding position under the 2025 provisional approach.

·       A timeline of the work being conducted by Barnett Waddingham was provided.

The Committee discussed the report with attention drawn to the employer covenant analysis and why Parish and Town Councils had been considered to be a high risk. Clarity was provided that though these had initially been graded as a high risk, this had now been reduced to medium with it noted that this had been the case due to Parish and Town Councils being pooled together, with singular decisions having the ability to affect the whole pool. It was noted that the risk referenced in this analysis was the risk that employers posed to the Fund. It was also suggested that if the smaller bodies referenced within the analysis did not have indemnity or guarantors then this would pose a risk to the Fund as the cost would have to be picked up by all employers within the Fund and that one way to mitigate this risk might be to increase contribution rates to cover the risk. Assurance was also provided on the monitoring of the organisations within the analysis, with it suggested that the high-risk organisations would be monitored and that organisations could move classifications at any point, therefore emphasising the need to have as much up to date information as possible for audit.

Clarity was sought as to which direction prudence might be adjusted, to which it was suggested that prudence may remain in a similar position to last time, however there was a general theme of expected return increasing as well as prudence. Further clarity was also provided in regard to the assumptions around increased prudence.

An explanation was provided on the potential effects of raising or lowering the discount rate with it noted that generally if discount rate is increased, the total contribution rate is likely to decrease. The notion of using benchmarks to work out assumed returns was discussed, with it noted that by focusing on individual assets, Barnett Waddingham would be more  ...  view the full minutes text for item 22.

A report for the committee’s ongoing oversight of:

·       Scheme, Regulatory, Legal and Fund Update

·       Health Check Dashboard – To 31 December 2024

·       Administration KPI update including an update of the KPI Improvement Plan– 1 December 2024 to 28 February 2025

a)    McCloud and Pension Dashboard updates

·       Risk Register

·       Key Financial Controls highlights

·       Audit update – SWAP KC actions

·       Training plan 2025/26

Jennifer Devine, Head of Wiltshire Pension Fund, supported by other officers, presented the Headlines and Monitoring report. Detail was provided on the risk register, with it noted that the report included a summary from December which had been taken to the Local Pension Board in February, however some issues had been uncovered in the governance area, therefore this would be amended to be an amber risk. It was also noted that in appendix 3b was a draft Risk Management Policy for approval, which would conclude the work on the risk management framework and bring the Fund in line with Wiltshire Council Policy.

The Pension Fund Committee noted update on the Risk Register, with it acknowledged that the Fund Governance risk section would be reported as a higher risk at the next meeting.

Reference was made to the health check dashboard, with the only change noted that investment performance had now been updated to be green rated. It was also noted that a summary of the Key Financial Controls report would now be included within the HAM report with full granular detail to be taken to the Local Pension Board.

It was outlined that the pension fund accounts for 2022/23 had received their audit opinion and were now available on the Fund’s website. This was the final outstanding set of accounts from Deloitte. The final opinion was a disclaimer of opinion, effectively meaning the auditors could not provide an opinion. Furthermore, audit testing in preparation for the 2024/25 accounts was now complete by Grant Thornton with only low and medium recommendations made regarding the old system which was no longer in use. The timeline for audit was also outlined.

An overview of KPIs performance was provided, with it outlined that performance had improved since the last report at the end of December with it noted that the backlog had now decreased to 171 cases and there had been a lot of movement in the right direction. It was also noted that iConnect onboarding had gone well with only 20 employers remaining to onboard with the year-end process set to be smoother now the Fund had data for 147 employers. Detail was provided on the revised targets for 31 March 2025 and 31 August 2025 as well as an overview of where the Fund currently was. The Chairman noted the positive progress that had taken place.

The Committee discussed the report with clarity provided that on average it takes one hour each month to analyse the risk appetite scores. Reference was also made to training which would be offered by Barnett Waddingham and would be available to the Committee in the future. It was also noted that in regard to Key Financial Controls, budget monitoring reports were now being produced with a new process set up.

At the conclusion of debate, it was,

Resolved:

The Committee agreed:

a)    To note the Fund updates.

b)    To endorse the risk register in Appendix 3a & the summary of risk changes since the last review, as  ...  view the full minutes text for item 23.

The Head of Wiltshire Pension Fund will present the latest Fund Business Plan and Budget to Committee for approval.

Jennifer Devine, Head of Wiltshire Pension Fund, presented the latest Fund Business Plan and Budget to Committee for approval. The report included but was not limited to that the Fund was now approaching the one-year point into the three-year Business Plan. The paper set out the key assumptions and processes which had been undertaken as well as providing an overview of the managers engaged with. It was proposed that for 2025/26 there be an operational budget of £5,054k, which was increase of £431k (8.4%) from the prior year. This included one off costs for the Triannual Valuation, which had been offset by bringing pensions payroll in house. The report also included key budget risks, which the Committee would be kept updated on.

It was outlined that benchmarking data from other LGPS funds had been used and that the Fund was comparable to peers with a suggested KPI of remaining beneath the benchmarked cost line per member. It was outlined that this operational budget did not include investment manager fees, as these vary depending on investment value and returns so are not effective to monitor versus a budget. Separate investment fees and costs information will be shared with the Committee later in the year.

The Committee discussed the report with the increase of 8.4% questioned with it outlined that this increase accounted for contractual pay increases, increments, inflation and the NI increase, attempts had been made to keep the costs down with increases limited only to these contractual increases, offset by the saving from the change to payroll provision. It was questioned whether the Fund should be spending more, to which it was noted that if such a position was required this would come to the Committee for approval.

The banding thresholds used by the Council were also referenced as well as the difficulties that had been experienced in recruitment due to salary issues. The Chairman acknowledged that due to the staffing issues if there was scope for relaxing some of the admin target dates included within the report, then the Committee would look favourably on this.

At the conclusion of debate, it was,

Resolved:

The Committee agreed:

a)    To note the progress made during the first year of the 24/27 Business Plan.

b)    To approve the Pension Fund operating budget for 2025/26 of £5.054m

Chairman called meeting to a break at 11:43am and resumed the meeting at 11:49am.

Verbal update from the Pension Administration Lead.

James Franklin, Pension Administration Lead, provided a verbal update on the Pension Administration Strategy. It was acknowledged that at a previous meeting it had been suggested that a report on the Pension Administration Strategy would be produced, however this had not been possible due to the loss of the Member Services Manager. It was noted that the report would be ready for the next meeting and would have gone out to consultation on the employer elements included within it by then.

The Pension Administration Lead will present a full closure report, including a transfer update to Oracle of unfunded pensions.

James Franklin, Pension Administration Lead, presented a full closure report, including a transfer update to Oracle of unfunded pensions. The update included but was not limited to that this report had been produced following final round of testing for the migration from Oracle to the Integrated Payroll System. The report noted that a series of parallel run testes had been conducted with 99% accuracy received. It was noted that there had been 18 net differences down to taxations therefore it was agreed that the system could go live.

It was noted that when the live payment took place in October 2024, the following discrepancies were found:

• 38 members where the gross payment did not match, amounting to £16,247.54.
• 4 of these members were suspended on Oracle and contacted the Fund so could be reinstated in the October payment,
• 32 members were paying back previous overpayments, and the repayment had been incorrectly ceased on Oracle; these were corrected on the first payment from Altair,
• 2 members were paid incorrectly due to data migration issues and were corrected

It was outlined that there had been a number of issues experienced during and following the payroll migration including that the HMRC payment link had been broken, therefore manual payments and submissions had to be made. Changes to member details that occurred after the final data cut were not passed to the

Fund from the Council payroll team, therefore resulting in a higher number of queries relating to incorrect addresses and in some cases bank details. A further similar issue occurred regarding overseas issues which has since been resolved with the system now fully automated and on the online platform.

Detail was provided that regarding the immediate payment reconciliation process, a report from Altair had suggested that this was not as planned, therefore this was being worked on by Heywood with calls regularly taking place every two weeks and the issue raised up the priority list. Additionally, it was noted that when paying a death grant, Altair only allowed for two recipients at a time, which had been raised by other Funds with it hoped that this issue could be resolved by the end of the calendar year.

The Committee discussed the report with it suggested that the Fund had not been served well by Heywood, to which officers clarified that there had also been issues caused by the Fund and that the relationship was being worked on by both parties. Clarity was provided that Heywood did not see the death grant issue as high priority, however it was hoped that if other funds raised the same issue this would collectively help to push the issue.

Officers provided detail on how records are suspended on Oracle as well as the process involved with finding out the death of a member. Assurance was also provided that had members not received payment on time, the Fund would have paid out compensation directly for this had the issues been the Fund’s fault.

At the conclusion of debate,  ...  view the full minutes text for item 26.

To review the work plan for the committee.

The Committee reviewed the forward work plan.

To determine the date of the next Committee meeting dates:

·       Investment focused meeting 19 June 2025

·       Administration focused meeting 17 July 2025

The following dates of the next meetings were confirmed:

·       Investment focused meeting 19 June 2025

·       Administration focused meeting 17 July 2025

Any other items of business which, in the opinion of the Chairman, should be considered as a matter of urgency. Urgent items of a confidential nature may be considered under Part II of this agenda.

There were no urgent items.

To consider passing the following resolution:

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Item Numbers 17 – 20  because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraphs 1 & 3 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

It was,

Resolved:

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Minute Numbers 17 – 20 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraphs 1 & 3 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

To approve and sign as a true and correct record the Part II (private) minutes of the previous meeting held on 6 March 2025.

The private minutes of the meeting held on 6 March 2025 were presented for consideration, and it was,

Resolved:

To approve and sign the minutes as a true and correct record.

To consider the Part II (private) minutes, and recommendations arising, from the last meeting of the Local Pension Board held on 11 February 2025.

The Committee noted the Part II (private) minutes, and recommendations arising, from the last meeting of the Local Pension Board held on 11 February 2025.

An update by the Head of Wiltshire Pension Fund concerning changes to the LPGS.

Jennifer Devine, Head of Wiltshire Pension Fund, presented an update concerning changes to the LGPS.

At the conclusion of debate, it was,

Resolved:

The Committee agreed:

a)    To note the update on Brunel Governance.

A selection of investment topics which have been rolled over from the meeting on 6 March 2025.

Jennifer Devine, Head of Wiltshire Pension Fund introduced a selection of investment topics which have been rolled over from the meeting on 6 March 2025. This included but was not limited to a summary of the voting process, fiduciary duty and the LGPS and reference to local investment.

At the conclusion of debate, it was,

Resolved:

 The Committee agreed:

a)    To note the updates around voting and fiduciary duty.

b)    To make decisions around the direction of travel for local investment, as set out in the paper.

c)    To approve that officers should draft policy wording around local investment should an allocation be made, for inclusion in the Responsible Investment Policy 2025.