Head of Pension Fund, Mark Spilsbury, gave an update on the Gloucestershire Local Government Pension Fund Business Plan 2019-20.
The Business Plan was prepared in accordance with the Department of Communities and Local Government best practice guidance for the governance of pension funds. The business plan confirmed that, at 31 March 2019, the Gloucestershire Local Government Pension Scheme (LGPS) had 55,468 members, consisting of 19,026 active, 20,414 deferred and 16,028 retired (pensioner/dependent) members.
The Head of the Pension Fund clarified that the costs set out in the business plan were borne by the Fund and not by the County Council. Estimated costs within the proposed budget for 2019/20 totalled £9,143 million, which includes significant costs from investment managers and costs relating to the Brunel Pension Partnership. It was explained that the main budget change between the 2018/19 budget (£9,268m) and 2019/20 was a decrease in external investment management costs. This was primarily because the budget for External Fund Manager costs had been reduced by £00,000, which reflected the removal of the budget provision for a potentially large performance fee that could have been payable under the previous UK equities investment mandate with Aberdean Standard Life, prior to the establishment of Brunel Active UK mandate.
The Committee noted the key targets and major milestones for the Pension Fund for 2019/20, as detailed on page 28 of the report.
Members were advised that the budget for staff costs had increased by £81,000, which related to the recruitment of three additional full time pension officer posts within the Pensions Administration Team. Officers explained that the Gloucestershire’s staffing costs were still significantly lower than many other similar sized LGPS funds.
In response to a question, members were informed that the increased staffing levels would help to achieve the performance benchmark targets by 2021. Officers explained that staffing costs were fully funded from the Pension Fund, hence the separate Pension Fund accounts.
Members requested a costing chart over a three year period in order to closely monitor the BPP budget activity. (Action – MS) The Committee wanted to examine the expected reduction in external fund manager’s fees compared with the additional costs to the Fund of the Gloucestershire share of the Brunel Pension Partnership (BPP) costs.In relation to the BPP budget, the Chairperson informed the Committee that BPP had been advised that there is an expectation that there would be no future significant increases in the BPP budget.
It was noted that there were a number of sub-groups, one of which was chaired by Mark Spilsbury that help to hold the BPP to account. In response to a question, it was explained that all ten shareholders had to be in agreement to approve addition staffing resources, under the agreed Special Reserve Matter process.
During the discussion it was also noted that BPP senior staff would present to the Pension Committee throughout the year. Mark Mansley and Chris Crozier from BPP would be presenting to the Committee later on in the agenda, primarily on investment performance and on the quarterly business report produced by the BPP.
The report was noted.