Agenda item

Gloucestershire Pension Fund Update - Part 1

The Board is asked to note the report.

Minutes:

The Head of Pensions presented an overview of market valuations and an update on the performance of the Fund, as at 31 December 2020.

 

The Board noted that by the end of the quarter the market value had increased by £193.4m in the quarter, to £2.842bn, which is back above pre-Covid levels. It was reported that performance for the fund for the quarter was 7.2%, and the benchmark was 6.4%, therefore the fund had outperformed the benchmark by 0.8%.  It was noted that Appendix 1 provided the full performance figures. 

 

Appendix 2 on page 35 detailed the strategic asset allocation of the Fund as at the end of December 2020.  The Board were advised that the Committee had approved a new strategic asset allocation at its January 2021 meeting, however these changes were not reflected in this analysis. 

The Board noted that Pages 25 to 28 of the report gave an overview of the voting statistics and the engagement that Hermes EOS actually undertook with companies on the Funds behalf.  It was noted that they had engaged with 368 companies in the quarter, over a range of issues, including ESG related matters.  The Board were pleased to note that the Fund was currently in a very healthy position at 106.9% funded at the quarter end.    

 

The Head of Pensions referred the Board to page 29 of the report, which gave an update on the administration performance.  It was recognised that the Covid pandemic had obviously impacted on working practices, however the Pensions Administration Team were still performing well.  In terms of the targets there was a slight reduction in some of the activities in terms of the number of estimates and number of leavers but this was an effect of the pandemic situation. The Head of Pensions anticipated numbers would increase when organisations return to normal.  Board Members recognised the efforts the Administration Team were making in the current situation by adapting their working practices and felt they should be commended for their efforts, given the year on year improvement. 

 

The Board were notified that the 95k Cap had been revoked by Government at this point in time.  It was noted that the Government still intended to apply a cap on exit payments and it was anticipated that new regulations would come forward in the summer of 2021. 

 

The Chairman recapped for the benefit on those watching the You Tube footage that the role of the Board was to scrutinise the work of the Committee.  

 

The Board welcomed the new report format and thanked the Head of the Pension Fund and his team for making the report more accessible but requested more clarity in terms of the graphs and voting statistics. 

 

In terms of voting, officers explained that the majority of votes against or abstaining   referred to resolutions like board structure and executive remuneration, etc. In response to a question, it was

explained that it related to direct communication with members of the board and the senior management team, in addition discussions were followed up with correspondence.  In essence it was activity outside of the Annual General Meeting (AGM) and would be a meeting with an agenda including areas of concern. 

 

Resolved

 

That the Committee noted the market value and quarterly performance of the Gloucestershire Pension Fund as at 31 December 2020.

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