Agenda item

This paper sets out a summary of the Pension Fund’s, overall performance for the quarter ended 31 March 2025, a cashflow update and forecast and an assessment of risks and actions taken to mitigate these.

This item includes appendices that contain exempt information. Discussion of the appendices will require passing the proposed resolution at the end of the agenda to exclude members of the public and press.

Phil Triggs introduced the report which outlined the Pensions update for the quarter ended 31^st March 2025. The investment performance report shows that, over the quarter, the market value of the assets decreased by £19m to £1,409m. The Fund had underperformed its benchmark net of fees by 0.05%, delivering an absolute return of -1.27% over the quarter. The total fund delivered a positive return of 3.73% on a net of fees basis over the year to 31^st March 2025. The Pension Fund’s cashflow monitor showed both the current account and invested cash movements for the last quarter, as well as cashflow forecasts to 31^st December 2025. An analysis of the differences between the actuals and the forecast for the quarter was included. The breaches of the law log had not been included in this quarter as there had been no breaches to report. Appendices included the draft Pensions Bill and a consultation on the LGPS being fit for purpose.

Councillor Adam Peter Lang sought the timeline for the Pensions Bill legislation to be passed. Phil Triggs confirmed that the final regulations were due to be in place by March 2026, but that it was more likely to be autumn 2026.

Andrew Singh told the Committee that the final report had no surprises but that the Pensions Bill would introduce large structural changes. There would be the ability to merge LGPS funds in Councils that were not complying. There would be a reduction in the number of pools of LGPS pension funds from 8 to 6.

Sam Gervaise-Jones commented that the bill would give the Government free reign to tell the LGPS what to do. He told the Committee that he was confident that in the short term the pools and LCIV were approaching the changes with a positive mindset but that the longer term picture was more uncertain. He added that the bill mentioned the creation of an LGPS officer post at each authority.

The Chair raised the issue of the 21 LGPS funds that made up the 2 pools that no longer existed and asked where they would end up, and whether there was a chance that some would end up in the LCIV leading to a dilution of LBHFs influence. Phil Triggs explained that the pools were often dependent on geographical location. He added that it had been mentioned that there were 3 pools that could take on the 21 funds that currently had no pool and LCIV was not one of them.

The Chair mentioned that the legislation stated that the pools preferences had to be taken into account when making decisions on the pension fund and asked how this dynamic would work. Phil Triggs said he was confident in the mechanism working. Sam Gervaise-Jones seconded Phil Triggs’ comments.

Councillor Laura Janes commented that it would be useful for the Committee to understand how the legislative changes would affect the Committee itself. Phil Triggs told the Committee that once there was a clearer indication on what the final regulations would look like, the Committee would be updated. The Chair suggested that a training session in the lead up to a future committee on the regulation changes would be useful.

RESOLVED

That the Pension Fund Committee noted the report.