The Committee is asked to note the report.
The Head of Pensions presented an overview of market valuations and an update on the performance of the Fund, as at 30 June 2021.
Members noted that by the end of the quarter the market value had increased by £159.5m, to £3.058bn. It was reported that performance for the fund over three years to March 2021 was 8.4%, and was slightly ahead of the benchmark by 0.4%. Members were advised that the last quarter provided a return of 5.4%, outperforming the strategic benchmark by 0.8%.
The Committee were advised that the Fund was in a positive funded position at the quarter end.
Members were advised that final transition of the Funds fixed interest allocations to Sterling Corporate Bonds and Multi-Asset Credit had taken place to the respective Brunel Portfolios during the quarter. It was noted that no rebalancing of the portfolios had taken place during the quarter.
In response to a question relating to fossil fuels exposures on the sterling corporate bond portfolio, Officers agreed to review the exposures and report back.
During the discussion, it was noted there was a marked increase in the number of retirement estimates, which had now appeared returned to pre-Covid levels. It was recognised that the Pensions Administration Team had produced the Annual Benefit Statements within the statutory deadline of 31 August. The Head of Pensions told the Committee there were a number of issues staff had faced during the pandemic but overall the administration team were doing a sterling job in challenging times
Members wished to know if the increase in retirement estimates was due to Covid. The Head of Pensions explained there was an increased interaction with employers, and it was employees only enquiring at this stage. The Employee representative explained in his service area there had been an increase in staff turnover, Officers explained they would continue to monitor required resourcing levels closely.
Members were advised that in terms of administration performance indicators for this quarter they were always challenging, however this was not a reflection of the performance that would be achieved as the year progressed. The Head of Pensions explained that resources were redeployed during the first quarter to deal with major projects, such as the year end process and the production of the Annual Benefit Statements. In addition staff were still working in a Covid enforced environment.
It was noted that as part of resourcing levels the ability to recruit and train staff in the current situation was an ongoing issue and forms part of the business plan.
In response to a question regarding mortality rate assumptions and updates on life expectancy, it was noted that Hymans would look at those factors as part of the valuation once the data had been collated.
The Committee were advised that in terms of Brunel voting, parameters were set by the Funds collectively. There was a responsible investment sub-group who met with Brunel on a regular basis. In addition, Hermes set a template that applied the voting principles of Brunel to operate within.
The Head of Pensions explained that in accordance with the knowledge and skills assessment, a training plan was being developed for members. In addition Brunel were offering investor seminars for members to attend virtually. If members were unable to attend then the recordings would be made available after the events. It was noted that Hymans will be providing the Fund with access to an online learning academy and the details would be circulated in due course.
The Chair was pleased to note the positive position of the fund and recognised this was the first time ever the fund had exceeded £3bn.
That the Committee noted the market value and quarterly performance of the Gloucestershire Pension Fund as at 30 June 2021.