Agenda item

Tom Morrison, Head of Investments for the NYPF, presented a report setting out the legal requirement to pool pension fund assets and how NYPF is addressing this through Border to Coast. He also updated the Pension Board on Government pronouncements on fund consolidation, domestic investment, and other aspects of the LGPS.

The report highlighted the issues that had been outlined to the Board at the previous meeting and matters that had arisen since then. The following issues were highlighted:-

·         Discussions had been held with the partner funds within BCPP, with the BCPP Joint Committee producing a response to the Government’s consultation to which all of the Funds had signed up.

·         Each individual fund had also submitted its own response to the consultation to reflect the differences of circumstance that exist across the partner funds. A deadline of the 16th January had been set for the responses to be received, therefore, the November meeting of the PFC, this meeting of the Board and a virtual meeting for members of both the Committee and the Board on 15 January will be utilised to gather any comments in respect of the NYPF response.

·         New regulations and guidance which are expected to be published in due course, would need to be adopted accordingly and the required changes considered by the PFC and the Board in due course. It was unclear, at this stage, whether the recommended proposals for governance alterations would be implemented in total, or whether a variation of those would be proposed. It was noted that one of the recommendations related to the separation of the financial accounts for LGPS Funds from those of the Administering Authority Councils, which would be welcomed by Members.

·         The timescales for the Government’s response to the consultation have not yet been established.

A discussion of the report highlighted the following:-

·         It was asked whether all the various Fund’s investments had to be under the control of a pool by the set time period. In response it was clarified that not all investments had to be pooled by then but the Government is expected to take into account of how the Funds are progressing.

·         Issues relating to the expenses involved in transferring the property portfolio into the pool were discussed and it was noted that a full assessment of the potential costs will be undertaken and the costs of implementation will be closely monitored.

·         NYPF had made substantial progress on pooling its investments, whereas some other Funds in England were yet to transfer any investments into pools, therefore, it is not expected that the Government’s concerns will have a material impact on NYPF.

·         BCPP is considered to be operating in line with the Government’s expected requirements for pooling and is, therefore, expected to be in a good position when the further regulations and guidance are published.

·         It was emphasised that the best interests of NYPF continued to be balanced against the move for 100% pooling, hence the continued investment with Baillie Gifford.

Resolved –

(i)            That the report, and issues raised, be noted.

(ii)           That further reports be submitted to the Board once the Government’s response to the consultation is available.