Agenda and minutes

Venue: Brunswick Room - Guildhall, Bath. View directions

Contact: Mark Durnford  01225 394458

No. Item



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


The Chair welcomed everyone to the meeting and asked the Democratic Services Officer to read out the Emergency Evacuation Procedure.




Tony Whitlock and Stuart Anstead had sent their apologies to the Board.




There were none.




There was none.




There were none.




There were none.


MINUTES OF PREVIOUS MEETING: 8th December 2022 pdf icon PDF 508 KB


The Board approved the minutes of the previous meeting and they were duly signed by the Chair.


PENSION FUND ADMINISTRATION - Overview & Summary Performance Report pdf icon PDF 217 KB

The purpose of this report is to present the Fund’s administration performance for the three months to 1 31 March 2023 vs key performance indicators (KPI’s).

Additional documents:


The Pensions Operations Manager introduced this item to the Board and gave them a presentation. A copy of the presentation will be attached as an online appendix to these minutes and a summary is set out below.


She informed the Board that it had been a tough few months for the team as the Payroll Leader had resigned at the end of March. She said that this required some immediate decisions to be taken which included moving Team Leaders from Member Services across to Payroll.


She explained that seven payrolls take place every month alongside reporting to HMRC, which had all been completed properly and on time in both April and May. She said that a new Team Leader has been recruited and is currently in training. She wished to give thanks to the Member Services Manager and the team for all their work.


The Member Services Manager said that a lot of fast track training was given and that all payments had been made on time.


Steve Harman asked if the new Team Leader could be approached to stay on a permanent basis.


The Pensions Operations Manager replied that they had already been appointed on a permanent basis.


The Chair commented that he felt that this had been a very impressive achievement from everyone involved.


The Head of Pensions addressed the Board.


Current state of APF organisation ….


Service quality is below SLAs agreed with the Pensions Committee:


? 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


We have the ability to address all the above issues.


Improvement objectives ….. - 2025 – what good looks like



·  Meet service standards set by CIPFA, plus TPR requirements

·  Achieve SLAs agreed with APF Pensions Committee – 90% in 2025

·  Easy digital experience – with substantial uptake of My Pension Online2

·  All employer data exchanged electronically




·  Deliver all regulatory changes which benefit members, e.g. - McCloud, Dashboard, GMP

·  Transformed digital platforms – for members, employers, APF staff

·  MI drives insight and is embedded into operational decisions




·  Pay rates are competitive for retention & recruitment of required talent

·  Vacancy rate within normalised range of 4-8% within 12 months

·  New operational structure embedded by year end

·  Engaged workforce: keen to learn, keen to serve members


Steve Harman asked where the figure of achieving 90% of our targets comes from and why is it not 100%.


The Pensions Operations Manager replied that the figure was a legacy issue and had always been in place prior to her commencing her role. She added that in her opinion 100% would not truly ever be achievable.


The Head of Pensions added that he felt that  ...  view the full minutes text for item 54.

20230523 - Appendix 3 Service Transformation pdf icon PDF 563 KB


Technical & Compliance Update pdf icon PDF 239 KB

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

Additional documents:


The Pensions Operations Manager introduced the report to the Board and highlighted the following points from within it.


Pension Taxation


The Spring Budget in March saw a number of changes to the way pensions will be taxed, primarily an increase to the annual allowance, and removal of lifetime allowance charges from 6 April 2023 (and abolishment of the lifetime allowance from 2024/25 onwards).


Whilst the changes to the annual and lifetime allowance are favourable to members, the changes have led to administrative processes and member communications to be updated and may lead to an increasing number of queries in the short-term.


CARE Revaluation


On 9 March 2023 DLUHC published its response to the consultation setting out proposals to change the annual revaluation date for the LGPS from 1 April to 6 April. The response confirmed that the change would take place and on the same day the LGPS (Amendment) Regulations 2023 were laid (coming into effect on 31 March 2023).


Whilst the changes made will have reduced the number of members impacted by the 2022/23 annual allowance charge, the timing of the change had an impact on the administration team given software systems weren’t updated prior to the change taking place (thus resulting in a greater level of manual calculations). Communications are also being updated and the team has also dealt with an increased number of queries from members.


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


Risk Management Update - Risk Register pdf icon PDF 186 KB

The purpose of this report is to update the Pension Board with the quarterly review of the risk register.

Additional documents:


The Governance & Risk Advisor introduced the report to the Board. She explained that following feedback from Pensions Committee and Pension Board members, pre-mitigation scores have also been added to the risk register. She added that the risk register identifies risks which could have a material impact on the Avon Pension Fund in terms of service, value, reputation, or compliance.


She identified to the Board the most current critical risks:


NR01 – ‘Ability to deliver admin service to members and employers within agreed standards’ The current factors impacting this risk are set out in item 8 – 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.


Councillor Paul Crossley asked if officers were comfortable with the risks that have been reduced.


The Governance & Risk Advisor replied that they were and that mitigation was in place regarding them.


Councillor Crossley stated that he believed that the Fund needs to be prepared for challenges in terms of its decarbonisation targets and climate change priorities.


The Board RESOLVED to note the report.



Every three years the Fund is required by the regulations to undertake a triennial valuation which sets the long-term funding strategy. As future investment returns are a key component of the funding strategy, the investment strategy is also reviewed to ensure it can deliver the expected return.


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


Actuarial Valuation 2022


The average deficit recovery for the Fund has reduced from 13 years in 2019 to 12 years in 2022 which is line with the medium-term target. The funding level has also improved from 94% in 2019 to 96% in 2022.


The discount rate used to value the past service a liability is based on the expected return on the assets relative to CPI. At 31 March 2019 the equivalent discount rate was CPI +1.75% p.a. This was reduced to CPI +1.50% in 2022 due to a fall in investment return expectations. This compares to a best estimate for investment returns of CPI+2.5% which shows the degree of prudence built into the assumptions.


Some smaller employers have had to leave the fund as their final member leaves. Still have around 450 employers and the valuation remains a resource intensive process.


Revised Investment Strategy


The 2022 strategic investment review was undertaken at a challenging time for investment markets. Therefore, the strategic focus re-examined the overall level of return and risk, the role of Risk Management Strategies in the overall policy framework and our net zero/climate targets.


The revised strategic allocation is based on the following:


a)  Risk Appetite: The Committee concluded that to maintain as stable as possible employer contributions, increasing returns and therefore risk was not warranted given the funding objective and funding level.


b)  Preferred strategic benchmark: The current strategic benchmark allocations between equities, liquid and illiquid growth assets, and fixed income achieves the appropriate balance of risk and return to provide stability of contributions.


c)  Diversification: The liquidity analysis concluded that the Fund was nearing its maximum allocation to illiquid assets. Therefore, alternative allocations between equities and other liquid growth assets did not improve the risk and return expectations sufficiently to warrant changing allocations.


The main asset allocation change is the initial target allocation of 3% to Local, Social Impact assets. This would be funded from the 32.5% already held in illiquid assets. The focus of the portfolio will be the South West which is a sufficiently local regional footprint as restricting to the Avon area could be too narrow to have sufficient impact through a diversified portfolio. National opportunities would also be considered to provide greater flexibility to meet the investment objectives.


The Investment Panel will review the Hedging Strategy in July 2023 and the Fund’s climate targets are due to be reviewed during September / October 2023 following an engagement exercise with stakeholders.


Steve Harman commented that it was positive to see the funding level had risen to 96% and asked how that compared with other Funds.


The Group Manager for Funding, Investments & Risk replied that historically the Fund would be placed around midway in comparison with others and that she felt this was probably still the case. She added that she was aware that some Funds were achieving funding levels of 110% -  ...  view the full minutes text for item 57.


Pension Board - Training and Work Plan Update pdf icon PDF 126 KB

The purpose of this report is to receive regular updates on Training and Work Plan issues from the Board and request high level training needs from Board Members.

Additional documents:


The Governance & Risk Advisor introduced the report to the Board. She explained that a workshop had been held in March 2023 to look at the Administration Strategy & Service Plan update (including KPIs). She added that officers would look to meet with Board members informally or through workshops in between their scheduled meetings.


She informed members that the SAB’s Good Governance Review is expected to include additional knowledge and skills requirements for Committee, Pension Board and Officers. She added that Hymans Robertson have been working with the SAB to develop these requirements and have produced an LGPS Online Learning Academy (LOLA).


She stated that a second version of the Learning Academy will launch in July 2023 and that the training was split into a number of modules covering the CIPFA Knowledge & Skills Framework.


Councillor Paul Crossley asked if the relaunch would result in additional charges to the Fund.


The Governance & Risk Advisor replied that it would not as they pay an annual charge for the licence. She added that currently Board members were asked to refresh their training on a yearly basis and that Committee members were asked to refresh their training every three years.


The Head of Pensions added that any new Committee member would be asked to complete the training within a year and then refresh every three years.


Councillor Crossley stated that he wanted to make the training compulsory for all new Councillors on the Committee.


The Board RESOLVED to:


i)  Note the workplan & training plan for 2023/24

ii)  Note the dates for future meetings.