Issue - meetings

The Committee noted the Funding, Flightpath and Risk Management Framework update.

Mr Middleman noted that the funding position had slightly improved since the end of September due to the strong performance of the assets. The main concern was regarding inflation head winds, which may have an adverse effect on funding position, but overall the Fund were still in a positive position and ahead of its target due to its strong performance.

            Mr Hibbert highlighted the discussion at a previous meeting that should the Fund hit the 110% funding level trigger, then there would be engagement with the Committee. Mr Middleman noted this and confirmed that the Fund had not hit the 110% funding level position yet.

The Chairman asked for clarification on the term head winds. Mr Middleman confirmed this meant increased inflation risk. He said that as reported nationally, there had been spikes in UK inflation over the past few months given various concerns including supply issues, energy prices etc. It was unclear whether this was going to be short or long term. If inflation were to spike, this would mean an increase in value of the Fund’s liabilities (as pensions are linked to CPI inflation), unless the assets performed even more strongly to achieve the same return in excess of inflation, in which case there would be a deterioration in the position. Mr Middleman confirmed that the Fund had an element of protection against inflation within the flightpath strategy.

RESOLVED:

The Committee noted the Funding, Flightpath and Risk Management Framework update.