The Board is asked to note the position of the fund.
The Head of Pensions presented the report which summarised the Fund’s funding position, market value, asset allocation, investment performance for the quarter ending 31 March 2022.
Members noted that by the end of the quarter to 31 March 2022, the Fund’s total market value had decreased by £120.655m, to £3,106.093m and over the quarter, total Fund assets produced a negative return of -3.8%, compared to a target of -1.5%, underperforming the strategic benchmark by 2.3%. It was reported that performance over the 3 years to 31 March 2022 was 8.3% annualised slightly behind the benchmark by 0.2%.
The Head of Pensions explained that Fund Administration remained challenging and he explained that two Pension Group Leader posts had been appointed to internal candidates, providing career progression. Their posts would require backfilling, so currently no actual additional resources had been introduced into the team.
Members were advised that the Pensions Administration Manager had applied for and been granted flexible retirement as of November 2022 and he would be actively working on the triennial valuation from now until November 2022. The Head of Pensions explained it was vital in retaining the Manager’s knowledge at this time within the service.
It was noted the performance statistics were not meeting their targets. The Head of Pensions advised that the team's focus was on delivering an equal service to all members of the fund and this was supported by the average case time only being marginally outside of the performance target. This situation would improve with the addition of the new resources as agreed by Committee, but it was advised that the on boarding and upskilling of new recruits into the technical nature of the work of the team and LGPS regulations would take time, before it would result in improvements in the key performance indicators. This was a key area of focus for the Head of Pensions and he explained there were no breaches of the statutory timeframes.
The Board were pleased to see that the fund position had improved but were concerned for team resources. In response to a question, it was explained that the team was currently resourced by 25 full time equivalent (fte), but the aim was to increase to 33 fte positions and the roles needed to be core business in terms of administration. The Head of Pensions explained that he was working with the actuary to develop a staff training programme for the new team. The Board were reassured that no statutory breaches had occurred.
It was explained a number of core projects were tracking the 2022/23 business plan and these were detailed within the report. During the discussion it was noted that an Employer Representative would be recruited to the Pension Committee in September.
Members asked if it was possible to split the investment return between the income and capital, the Head of Pensions explained that he would investigate the request further.
During the discussion it was suggested that IT software would help mitigate some of the issues. It was noted there were a small number of pension software suppliers nationally and GCC currently used the services of one of the main providers. The Committee were advised that an IT procurement exercise was currently being undertaken as it was one of the key core projects contained in the Business Plan for 2022/23. It was noted that Head of Pensions would lead on this project and was working closely with the procurement team. The Chair added that Oxfordshire was in the same position, and suggested it might be beneficial to work jointly on this area going forward if feasible.
The Board noted the position of the Fund as at 31 March 2022 and the governance undertaken and subsequent recommendations agreed by the Pensions Committee at their meeting held on 16 June 2022.