Victoria Moffett, Pensions and Investments Manager presented this report which provided an update on investment related activity, the drivers for the improved funding position over the quarter ending 31 March 2021 and activities that had taken place to ensure that the Fund was well-governed.
In response to a request from Alan Kidner, it was agreed some information from the employer engagement findings would be shared.
Responding to a question from Keith Francis regarding the investment strategy in light of the improved funding level, Victoria Moffett explained that a review would be undertaken over the following 6-9 months which would consider whether the risk profile had changed. Chris Norton, Strategy and Commissioning Manager (Treasury, Pensions, Audit, Insurance, and Risk), added that the funding level was monitored by the Pension Fund Investment Sub-Committee and, due to its volatility, a long-term view would be required to ensure that change was not a result of reacting to short-term impacts in the market. Mr Francis observed that he would have expected a policy change when funding hit the 100% level and Chris Norton explained that the funding level would be a consideration in the investment strategy review.
Mike Snow asked how far above 100% funding would employers see a benefit and be able to stop making extra contributions. Chris Norton commented that the funding strategy statement including a number of objectives, including to minimise contribution levels and to minimse volatility in contribution levels. He noted that minimising contributions creates a risk if there is then a swing in circumstances. This aspect would need to be reviewed as part of the valuation that drives that investment strategy.
In response to a question from Keith Francis regarding the liabilities focused Independent Financial Advisor, Victoria Moffett advised that this would be a named individual who may be part of a wider organisation. The contract was for a 4-5 years.
The Local Pension Board noted the report.
Keith Bray arrived at 11.52am and took the Chair.