Agenda and minutes

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No. Item



The Chair will ask the Committee Administrator to draw attention to the emergency evacuation procedure as set out under Note 5.


The Chairman drew attention to the emergency evacuation procedure.




Councillor Joanna Wright had sent her apologies to the Committee.


Councillor Toby Simon was present at the meeting virtually via Teams to view the proceedings.



At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:


(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest, (as defined in Part 4.4 Appendix B of the Code of Conduct and Rules for Registration of Interests)


Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officeror a member of his staff before the meeting to expedite dealing with the item during the meeting.



There were none.




There was none.




Four members of the public had submitted questions to the Committee. They and their responses are attached as online appendices to these minutes.


Councillor Steve Pearce commented that he was disappointed that the Fund has not been that vocal about how much engagement work it does take part in. He added that he hoped that in the future they would explain their processes in more detail and make the case clear for doing the work that they do.

20230623 Avon Pension Fund Committee - Public Questions pdf icon PDF 62 KB

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To deal with any petitions or questions from Councillors and where appropriate co-opted and added members.



There were none.


MINUTES: 17TH MARCH 2023 pdf icon PDF 535 KB

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The Committee RESOLVED that the minutes of the meeting on 17th March 2023 be confirmed as a correct record and signed by the Chair.



The Committee are asked to note the minutes of the recent Pension Board meeting.


The Committee RESOLVED to note the minutes of the Board meeting held on 23rd May 2023.



This report is to remind members of the roles and responsibilities of members, advisors and officers of the Avon Pension Fund and the governance framework for the Fund as a whole.

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The Governance and Risk Advisor introduced the report to the Committee. She explained that they were seeking an amendment to the Terms of Reference (ToR) for the Committee with regard to its quorum.


She stated that the ToR currently reads ‘The quorum of the Committee shall be 5 voting members who shall include at least one member from Bath & North East Somerset Council’.


She said that the proposed amendment was as follows ‘The quorum of the Committee shall be 5 voting members who shall include at least one member not from Bath & North East Somerset Council’.


She added that this is to ensure that any decision taken is not just by B&NES members. She informed the Committee that the revised ToR will be put forward for approval by Council in July.


She stated that all members of the Committee are encouraged to undertake training to ensure they can discharge their responsibilities and that the SAB’s Good Governance Review and The Pensions Regulator’s (TPR) Code of Practice for public sector pension funds requires greater disclosure of member training and requires all members to attain a satisfactory level of knowledge in order to discharge their duties. She added that as a result all Committee members are required to undergo Hyman’s LGPS Online Learning Academy modules within a year of when they are appointed to the Committee and every three years thereafter.


The Committee RESOLVED to:


i)  Note the roles and responsibilities of the members, advisors and officers.


ii)  Approve the Terms of Reference of the Committee and Investment Panel.


iii)  Approve the Scheme of Delegation.


iv)  Approve the Governance Compliance Statement, including draft Representation Policy.


v)  Note the amendment to the Training Policy.


vi)  Note the Decision Making Matrix.


vii)  Agree the independent member representation of the Brunel Working Group.


viii)  Agree the substitute of Brunel Oversight Board.


ix)  Agree the member(s) to represent the fund on the Local Authority Pension Fund Forum.


x)  Agree to delegate the drafting of the Annual Report to Council to Officers and the Chair (subject to informal consultation with Committee members prior to the Chair approving the report).



The purpose of this report is to present the Fund’s administration performance for the three months to 31 March 2023 vs key performance indicators (KPI’s).

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The Head of Pensions introduced this item to the Committee and highlighted the following sections from within it.


He informed them that work on the rebrand of the Fund had begun and that they were keen to involve Committee members in the project. He added that this would involve a logo and colour scheme change and amendments to the language and tone of voice used in communications to make understanding simpler for members of the Fund.


Charles Gerrish asked officers to be mindful of any colour schemes that might prove challenging to those members with any visual impairments.


The Head of Pensions replied that they were aware of the need to make sure that the website remains as accessible as possible.


William Liew asked if officers had considered engagement with actual members of the scheme on this project.


The Head of Pensions replied that they were looking to engage with stakeholders where possible, especially on climate change matters.


The Chair asked officers to make sure that all Councillors were aware on this ongoing work.


Current state of APF organisation ….


Service quality is below SLAs agreed with the Pensions Committee, but within the targets set by CIPFA and The Pensions Regulator.


? 75% of members service requests are completed within SLAs

? c.65% was achieved before the office return in Q4 2022 since when further improvement has stalled


Service quality is limited by 4 key issues:


? high vacancy rate of c.16%

? elevated work load due to increased i-Connect data combined with a complex leaver-joiner process

? performance MI is insufficiently embedded in operational management

? there is limited digitisation with heavy manual processes


Councillor Kate Kelliher asked if there was a need to monitor smaller employers in more detail.


The Pensions Operations Manager replied that the SLAs were the same for all sizes of employers.


Wendy Weston referred to page 90 and asked a question relating to retirement cases and the number of active cases completed outside SLA.


The Pensions Operations Manager replied that the chart shown was to indicate the timeframe for when cases have been completed even though they were outside of the SLA.


Jackie Peel asked whether the backlog issues were in terms of standard cases or those of a more difficult nature. She also asked whether the receipt of better Management Information (MI) would improve the backlog issue.


The Pensions Operations Manager replied that there is a degree of the backlog that can be attributed to older, more difficult cases and that whilst these remain the figures are not likely to improve. She added that it was hoped that better MI would improve the figures in some way.


Charles Gerrish referred to Appendix 2, Annex 1 and asked if it was correct that the figure relating to Historic Refund Cases (478) should be the same for December 2022 and March 2023.


The Pensions Operations Manager replied that this was correct and that it was normally a small amount that was involved. She said that the Fund do  ...  view the full minutes text for item 10.



One of the risks for employers is the possible increase in liabilities arising when an active member dies as their beneficiary will receive a lump sum and spouse’s or partner’s pension earlier than would otherwise be the case.

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The Group Manager for Funding, Investments & Risk introduced the report to the Board and highlighted the following points from it.


She explained that one of the risks for employers is the possible increase in liabilities arising when an active member dies as their beneficiary will receive a lump sum and spouse’s or partner’s pension earlier than would otherwise be the case.


She stated that if there is a strain, it can significantly increase the liabilities and will feed through into the funding plan at the next valuation. For small employers the higher costs can be difficult to manage especially when they occur close to the employer’s exit from the Fund.


She informed the Committee that the feasible options to mitigate this risk were (i) captive insurance and (ii) 3rd party insurance and that maintaining the status quo would not manage the risk.


She said that the Actuary is proposing the Fund implements a captive insurance arrangement covering all employers within the Fund and that the Fund already has a similar arrangement for managing ill-health retirement costs for smaller employers.


She added that other LGPS use a range of options within this area of work.


Paul Middleman, Mercer said that this proposed arrangement was reasonable for all employers and considered it to be an optimum solution. He added that the decision would be kept under review.


The Committee, having been satisfied that the public interest would be better served by not disclosing relevant information, RESOLVED, in accordance with the provisions of the Section 100(A)(4) of the Local Government Act 1972 that the public should be excluded from the meeting for this item of business, because of the likely disclosure of exempt information as defined in paragraph 3 of Part I of Schedule 12A of the Act as amended.


The Committee RESOLVED to:


i)  Approve implementing a captive Death in Service arrangement within the Avon Pension Fund and for this to be reviewed after the next valuation

ii)  Note that a consultation with employers will be undertaken before the arrangement is implemented

iii)  Delegate updating the Funding Strategy Statement to include the captive arrangement to Officers.


William Liew abstained from voting.




This paper reports on the investment performance of the Fund and seeks to update the Committee on routine strategic aspects of the Fund’s investments and funding level, policy and operational aspects of the Fund.

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The Investments Manager introduced the report to the Committee. He wished to highlight that the Committee had previously agreed to allocate an initial 3% (~£160m) of fund assets to a local impact portfolio.


He explained that the portfolio will be asset class agnostic but is expected to centre around local affordable housing and renewable infrastructure opportunities. He added that ‘Local’ in this context refers to the South West region.


He stated that officers are currently developing the governance framework that will specify how investment opportunities are assessed before entry into the portfolio. He added that elements of this portfolio may have to be managed outside of Brunel in which case Mercer would provide suitability advice for any prospective investments.


He informed the Committee that since agreeing the allocation, a number of compelling investment opportunities have arisen which officers are currently reviewing in consultation with multiple other Brunel partner funds.


He said that further information relating to ‘live’ investment opportunities and the local impact governance framework will be presented to the Investment Panel and Committee in due course.


Steve Turner, Mercer addressed the Committee and highlighted the following sections from within Appendix 3.


Funding level and risk


The funding level is estimated to have decreased marginally over the quarter to c. 95%, as the increase in the estimated value of the liabilities outweighed the increase in the value of assets.


The Value-at-Risk increased marginally over the quarter to £1,192m, but fell as a percentage of liabilities to 21.1%. The reversal in Q4 of the small increase in risk levels during Q3 means that the risk as a proportion of liabilities is broadly unchanged compared to one year ago.




Absolute returns for the global equity mandates compared to the strategic returns modelled at the strategy review in 2019 have been generally positive, with the exception of the most recently-incepted Paris-Aligned mandate, due to the timing of its point of inception.


The Diversified Returns and Multi-Asset Credit mandates have fallen short of expectations, largely due to negative performance versus the cash plus benchmarks in 2022. This was a year, however, where virtually all major liquid asset classes fell in value (except for commodities which have high carbon footprints).


Property and Secured Income have been mixed, however all of the Infrastructure and Private Debt assets have outperformed.


He informed the Committee that there were no parts of the portfolio that were causing undue concern.


He said that Mercer were working with officers within the Fund on a Risk Management Review, Climate Change Review and the Local Impact Portfolio.


The Committee RESOLVED to note the information set out in the report and appendices.



This report provides the Committee with a summary of the employer base of the Fund, changes, current issues and covenant work. This is to be considered in the context of employer risk.

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The Funding and Valuation Manager introduced this item to the Committee. She explained that the report provides the Committee with a summary of the employer base of the Fund, changes, current issues, funding strategy and covenant work.


The Committee RESOLVED to note the report.



The purpose of this report is to update the Pension Committee on any proposed regulatory matters that could affect scheme administration.

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The Technical and Compliance Manager introduced the report to the Committee and highlighted the following areas from within it.


SCAPE Discount Rate


On 30 March 2023, the Chief Secretary to the Treasury issued a written ministerial statement that announced that the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate had been reduced to a rate of 1.7% per annum above CPI, from the previous real rate of 2.4% per annum.


Whilst GAD reviews the actuarial factors to apply to the LGPS (and other public sector schemes), many calculations are currently suspended. These are mainly CETV’s for transfers (including refund / transfer outs) and divorce.


This has implications for the administration team in terms of both member communications, and resource management for when the suspension is lifted.


Pension Dashboard


The Pension Dashboard Programme gathers pace with developments in a number of areas. The main development saw the Pensions Minister, Laura Trott make a statement on 2nd March 2023 announcing the Government’s intention to legislate “at the earliest opportunity” to amend the scheme’s connection deadlines, to allow more time to deliver the complex dashboards infrastructure.


It’s not clear yet which schemes (including the LGPS) will be given an extension and how long this may be. Further details are expected prior to the summer recess.


Whilst there is potential for the Fund’s connection date to be delayed, in the absence of any confirmation for the LGPS, the Fund is continuing its preparations towards meeting the necessary Pensions Dashboard requirements and awaits further guidance from central bodies e.g. LGA in relation to what action LGPS Funds should be considering.


Charles Gerrish asked if there was any update on the Oasis consultation referred to on page 269.


The Group Manager for Funding, Investment & Risk replied that they had not heard anything further.


William Liew asked if the announcement regarding the SCAPE Discount Rate would add to the backlog problems within the work of the Fund.


The Technical and Compliance Manager replied that it would to some degree as some elements had been suspended for 2 – 3 months.


The Committee RESOLVED to note current position regarding developments that could affect the administration of the fund.



Attached to this report is the work plan for the Committee (Appendix 1) and a separate one for the Investment Panel (Appendix 2) which set out provisional agendas for forthcoming meetings. The dates for future Committee and Panel meetings are also included.

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The Governance & Risk Advisor introduced the report to the Committee and drew their attention to the following sections.


Hymans LGPS Online Learning Academy (LOLA)


In order to meet the additional knowledge and skills requirements of SAB’s Good Governance Review the Fund has introduced Hymans LGPS Online Learning Academy (LOLA). Committee members have agreed to complete all training modules within twelve months of becoming a Committee member and repeat the completion of the modules every three years.


Modern Gov Library


The decision has been made to suspend use of the Modern Gov library until its effectiveness can be reviewed. In the meantime all monitoring reports will form part of the main committee reports.


Quarterly Review of Risk Register


Following the quarterly review of the risk register there were no changes made.


The most critical risks are currently:


·  NR01 – ‘Ability to deliver admin service to members and employers within agreed standards’ The current factors impacting this risk are set out in item 10 – Pension Fund Administration report.


·  NR12 – ‘Failure to achieve decarbonisation targets in the required timescales in accordance with climate change priorities’ Government climate policies not moving fast enough or sufficiently enforced.


·  NR05 – Failure to manage personal data in line with data protection regulations. Following an increase in the number of data breaches caused by enveloping errors and on the advice of Information Governance and Internal Audit the decision has been taken to stop all bulk printing and enveloping while the process is reviewed. Consultation with Information Governance & Internal Audit is also taking place to improve the process for providing members with activation keys for My Pension Online, following two data breaches.


The Committee RESOLVED to note the Committee & Investment Panel workplans, training programme, service plan & risk register.


The next meeting of the Committee will take place on Friday 22nd September 2023 at 10.00am.