Agenda item

Report of the Director of Finance

The Pensions Committee received a report of the Director of Finance relating to the Staffordshire Pension Fund Business Plan 2023/24.

Progress on 2022/23 Business Plan

The disruptive impact of the Covid-19 pandemic no longer affected the service provision. The hybrid working arrangements allow officers to continue to embrace the developments that have been made in technology, and the impact these had on operational activities.

The experience, dedication and enthusiasm demonstrated across the Treasury & Pensions Team enabled the ongoing delivery of a high level of day-to-day service provision to all the Fund’s stakeholders, as well as the delivery of several Key Development Activities from the 2022/23 Business Plan. These included:

• The successful collection and provision of data to the Scheme Actuary to facilitate the 2022 Actuarial Valuation at 31 March 2022 and the dissemination of results schedules to the Fund’s 500+ Employers.
• The successful completion of the first Digital Proof of Life exercise. This was a new process that replaced the paper process with a digital biometric facial recognition process to confirm identity from a computer or mobile phone.
• Work undertaken between Fund officers, Investment Consultant and Pensions Panel to consider how best to implement the strategy across the various asset classes. Whilst the focus in 2022 had predominantly been on Equities, the pace of investment into Private Markets had been maintained and opportunities to invest in several funds had also been taken.

Performance Standards 2022/23

The Committee was made aware of the challenges implicit in administering the LGPS, and the regulatory complexity that brought with it. Planning for a wide range of new and changing legislation meant that there would always be more to do.

The Fund had experienced a small increase in staff turnover over the last 12 months which had not been helped by a challenging recruitment environment; a problem echoed nationally across other LGPS. However, the recruitment program had continued and whilst the level of applicants had fallen, several successful appointments had been made. The Fund had finally been able to introduce a new five pillar team structure, which would future proof the service and allow for succession planning. This had facilitated internal promotions, to a new wider Management Team.

Key Developments for 2023/24

Several areas that the Treasury & Pensions Team had identified as Key Development Activities in 2023/24 included:

• Continuing to collect retrospective data from Employers and planning for the implementation of remedial action arising from the McCloud / Sergeant judgement;
• Appointing an ISP and the undertaking of a ‘data readiness’ exercise ahead of the LGPS staging date for the DWP new national Pensions Dashboard;
• Tendering for a provider of Actuarial Services; and

• Continuing with the implementation of the new Investment Strategy following the review of Fund’s Strategic Asset Allocation.
• Pensions Dashboard – Integrated Service Provider (ISP) and Data Readiness

Cost and Resources

The Pension Committee heard that the Fund had six main areas of ‘resource/cost’:

• Pension’s administration and accounting (internal);
• Governance (internal and external);
• Advice from actuary and consultants/advisors (external);
• Legal support (internal and external);
• Investment management (external); and
• Custody (external).

The most expensive area was highlighted as the Investment Management Fees. Whilst this figure appeared high the return on investment demonstrated that the Fund was receiving value for money in this area.

In response to a question asking what was included in the “other expenses” costs, the Committee was informed that the cost was predominantly associated with the independent performance management fees. It was confirmed that a more detailed breakdown would be brought to the June 2023 Committee meeting.

In response to a question asking how many Fund officers worked from home, it was confirmed that 100% of the team were offered a hybrid working option, meaning they were able to work both from home and in the office at various times throughout the working week. The Committee was also informed that specific “team days” had been arranged to ensure officers were able to spend time together on a regular basis.

Resolved: That the Staffordshire Pension Fund Business Plan for 2023/24 be approved, and the key challenges, be noted.