Agenda item

1.     That the Committee considered the update and commented accordingly.

2.    That the Committee agreed the proposed changes to the ‘Delegations of Functions to Officer’ document in Appendix 6.

The Chairman moved on to the last agenda item which was an overall update on the Clwyd Pension Fund since the last Committee meeting.

With regard to the Governance section 1.01, it was commented that dates need to be arranged in order for training to be undertaken. Mrs McWilliam commented an email would be circulated with options and that the key priority is for the newest members to have dates that suit them. The aim is for 2 training days, one in March and one in April.

Mr Latham referred to section 1.04; he stated that the new minister Rishi Sunak MP will be responsible for setting LGPS legislation. Mr Sunak is keen with background knowledge on pooling and investments and is looking at sustainability in the LGPS and what it means for authorities.

Section 1.05 summarised the current Scheme Advisory Board (SAB) agenda.  Mr Latham mentioned that one area that has returned to the agenda in recent national discussions was the separation of LGPS Funds from the Council as legal entities.  Any further updates on this will be given at future meetings.

Mr Latham noted that the change from Welsh Government to exclude Pension Fund accounts from the Council accounts will affect approval mechanisms on both sets of accounts and the timing is being discussed.  This affects only Welsh (not English) Funds so would need to be considered across Wales potentially to make it as easy as possible.

Mr Middleman referred to section 1.07 and commented that the funding level has since dropped to 89% due to the drop in equity markets, which is still significantly ahead of where the Fund was expected to be. This emphasised the importance of the equity protection the Fund has in place to manage the risk of a large fall in markets. As previously reported the structure of this is being reconsidered before the existing arrangement expires in April.

Mr Harkin noted that at the end of January 2018 the Fund’s assets were over £1.8 billion. He also noted that other LGPS Funds have also been considering equity protection as part of risk management.

Cllr Llewelyn-Jones asked for Mr Harkin to give a further explanation in relation to page 50 paragraph 2 of the conclusion of the Economic and Market update i.e. can the current growth continue and can central banks afford it.  Mr Harkin explained that the key is whether the banks can afford further quantitative easing (QE) to stimulate the economy if needed.  This has certainly been scaled back recently. Equally what the Government does with monetary policy (interest rates) is important.   Currently Governments and Banks seem to support continued stimulus so there are no immediate signs of a downturn or recession indicators although different economies are in different positions.  For the Fund inflation will be key as asset returns need to at least match any increase in inflation otherwise costs could increase.

The Chairman raised section 1.12 regarding the discretionary policies. Over time these need developing and the recommendation is the Committee to delegate the approval of these policies to the Chief Executive and Corporate Finance Manager.  This was agreed.

Mr Everett informed the Committee that Home Farm Trust (HFT) has bid successfully and is now a new employer in the Fund which is positive

RESOLVED:

1.     That the Committee considered the update and commented accordingly.

2.    That the Committee agreed the proposed changes to the ‘Delegations of Functions to Officer’ document in Appendix 6.