Agenda item

The Committee approved the Business Plan relating to the period 2024/25 to 2026/27, including the budget for 2024/25.

Mr Latham took the Committee page by page through the introduction to the draft Business Plan, highlighting key areas of work and risk. 

 Mr Emmerson of Aon took the Committee through the Governance Appendix of the draft Business Plan. He highlighted key tasks and risks including:

-       Succession planning and proposed review of the management structure 

-       The Regulator’s new General Code of Practice which is expected to impact on future policy reviews

-       The Investment Consultant tender will begin early in the year in order to ensure the benefit of Mrs Fielder’s knowledge in the area before her retirement. This will allow training of staff for the independent adviser contract when it is put out to tender later in the year. 

-       Upcoming reviews of the Pension Board Scheme Member Representatives.

Cllr Shallcross emphasised the importance of work shadowing by officers in order to retain knowledge.

Mr Hibbert asked whether the Committee’s Scheme Member Representative would be reviewed at the same time as the Pension Board Scheme Member Representative. Mrs McWilliam said that she would not recommend this due to the difference in timescales. 

Mr Middleman and Mr Turner presented the Finance, Funding and Investment Appendix of the Business Plan. Mr Middleman highlighted the Interim Valuation Review which takes place this year and will cover a number of themes discussed earlier regarding phase 2 of the strategy review.  He explained that Committee will be provided with Funding Strategy and Actuarial Valuation training in preparation for next year’s formal Actuarial Valuation. Mr Turner explained the key investment-related themes including the ISS review and Taskforce for Nature-Related Financial Disclosures (TNFD) reporting.

Mrs Karen Williams presented the Administration Appendix, highlighting changes to the list of business as usual activities to reflect growth of the administration team’s day-today responsibilities. Several key tasks were carried forward from last year’s business plan as discussed at the February Committee, and there were some new tasks including documenting procedures around the Fund’s discretionary policy with respect to death grants, and developing an escalation policy to support employers who are not meeting their responsibilities relating to the Fund. 

 Mr Bateman presented the operating costs budget for 2024-25, explaining the main areas of change including:

-       Employee costs are based on the current establishment, allowing for a 5% pay increase. The actual 2023-24 employee cost was lower than budgeted due to staff vacancies which have now been recruited to. 

-       Training costs are now being reported separately for Committee members, Pension Board members and Officers.

-     All consultant costs include projects identified within the business plan and are based on the agreed inflation uplifts within the contracts. However, the Fund will be tendering for the investment consultant contract during the year 2024-25 so these may be subject to change. 

-     The budget for investment management expenses has increased due to the Fund’s increasing net asset value, based on the latest 2023-24 estimates.

-     Administration costs in 2023-24 were underspent, because planned software changes were not implemented due to delays in national projects including the publication of McCloud regulations and implementation of the National Pensions Dashboard. This cost has been carried forward into the 2024-5 budget. 

Mrs Fielder presented the cashflow, highlighting:

-       Total benefit payments have continued to increase.

-       Expenses are estimated in line with the agreed uplift for the year.

-       Income and employer contributions are based on the last actuarial valuation, and contact is maintained with employers to determine how they will treat any surplus.

-       Employee and employer contributions are based on estimated pensionable pay. 

-       Private market drawdowns and distributions are difficult to estimate, and income from these has been below expectation in 2023-24.

RESOLVED: 

The Committee approved the Business Plan relating to the period 2024/25 to 2026/27, including the budget for 2024/25.