Transcript

OK, we're going to make a start. Can I firstly welcome everyone to the meeting? I know we're all busy and there's a lot of things going on, but this meeting was actually set before the general election, hence the reason it's still on the calendar. As you're probably aware, other meetings have been deferred until after the election. Right, you're probably aware that the meeting is being broadcast live by the Council's internet site and members of the press and public may record and take photographs, except where there are confidential items. Cameras in the Council Chamber are of a very high resolute, so if you don't want people to see what you are doing or reading, then just bear that in mind. Yeah, and can I ask that members of the public observe the following at all times? Need to be respectful as an observer of the meeting and remain courteous at all times. Enter and leave the public gallery quietly if you have to leave. Please do not disturb the meeting or other observers by speaking too loudly or moving unnecessarily and just be aware that there is a meeting going on. Right, with those notes, I'm going to start the meeting. Firstly, item agenda one is apologies for absence. We have a number of apologies. Councillor Dihal, if we could record our apologies. Councillor Harvinder Singh, Councillor Paul Appleby, Councillor Ashimattu, and Councillor Adam Hicken, Councillor Dowell from Sandwell, and Councillor Thorne from Dudley. Any other apologies? And Janice as well, if we could record their apologies as well then that's two. Right, so that covers the apologies item agenda one. Item agenda two is declaration of interest. If anyone's got any interest in regard to anything on the agenda, no? Okay, thank you for that. Minutes for approval. Right, before we approve the minutes, right, there's just a typing error on page five, which is the first section, and it has been corrected on the new set of papers. So that's just for information. So if we note that, Fabrikan, is that okay? Yeah, right. With that, can I move the minutes as a true record? Secondly, thank you. Can we agree? Everyone in agreement? Yeah, thank you for that. Right, matters arising is item agenda four. Any matters arising from page one, two, three, four, five, six, seven, eight, nine, 10. That's up to page 14 on your pack. No? Okay. Thank you for that. So we go into item agenda five, which is the annual governance arrangement paper, and that's Rachel. Rachel, the floor is yours. Thank you, Chair. So this is the annual governance report we bring to each first meeting of the municipal year in which we seek approval for the governing body management policies, some of which are statutory, some of which the fund adopts as best practice. Following review of the policies last year, noting the publication of the Scheme Advisory Board's good governance review on our proactive publication of our representation and conflicts policy, there's been no change on review to these policies this year. We are still waiting formal guidance on the outcomes of the SAB review, and we'll update the policies as needed once guidance is forthcoming. So committee are asked to note contents of the report and reaffirm the appointment of trade union members together with our annual policies. Thank you, Chair. Okay, thank you for that. Thank you for that, Rachel. David, did you want to -- It's just a question, actually. I was just looking at my predecessor, Malcolm Cantello, is shown as having 150 hours training last year. Is that correct? It's certainly an example to us all, but I just want -- I just thought I'd check it because it's so out of line with everybody else. Yeah, it is a correct figure, as recorded by him, yes. Okay. Yeah. Yeah, that is correct. I mean, with regard to Malcolm, he was one of the most best attendees and also very active in being a critical friend to the pensions committee. David, he was just unique, actually. And he's poorly at the moment, but when he gets a bit better, I will bring something back to the committee because he was a real good member of this committee, very active. And I don't want to lose his knowledge, even though he's poorly. And I hope he's still interested in working with the pension trust, because he's got a lot of knowledge, a lot of experience, and we really shouldn't lose that, even, if he's interested, that is, anyway, if he's watching. Carol? Thank you, Chair. Would this be a good point, then, to offer our thanks to Malcolm for the work that he has done for the pension and his contribution? And my second point is that I couldn't see in governance a non-attendance policy. And I would like to move that we have, if people don't attend, we send a letter requesting attendance, ask if anything prevents attendance, to see if we can support them to attend the meetings, make sure they have the dates of the next meeting, and then state that if they do not attend, then request that a different counsellor can take on this important role. Yeah, you do raise a good point, a valid point, Carol. Firstly, let me deal with the Malcolm issue, really, the letter. I don't want to jump the gun, because as I said earlier, right, I actually want him to stay involved with the pension. So I don't want to send him a thank you and a goodbye letter, right, if that's the intention. I want to let him get a bit better, and then we'll see how we can use his knowledge and experience. So let's not say goodbye to him. I know you didn't mean it in that way. With regard to the attendance, it is important that members attend, but there is a difference between elected members, council members, who are appointed by the relevant authorities, and then the unions are actually invited. We were one of the few pension trusts in the country who actually got the unions involved, so they are only invited. I do take your point, and I think we did have this discussion earlier on, but I think we want to keep them, and we want to use their knowledge, and obviously they will have difficulty attending, but it is really up to them. I don't want to take this seat away from the unions. We have made them aware that their members' attendance is at that figure, Carol. Mr Chair, my comments were not just addressed to the unions. I mean, they were addressed to the council for anybody who doesn't attend meetings. The past two years that I have been on the pensions committee, this has come up. By the end of the year, we are lucky to be coret, and we could put it into governance. This is, you know, we could make that difference now, which will last for the lifetime of this pensions committee. I take your point, but in the constitution, right, the relevant authorities are said to make the appointment. We do not have a say on who they appoint. We have actually written to the relevant authority where the member doesn't turn up or they have a poor attendance. I have actually spoken, well, not spoken, but sent a letter to the chief executive and the legal officer. But it is, Carol, really up to them. We, you know, unless we change the constitution and say we want to get rid of, you know, who's not here, Dudley, right. So they can't argue now, right? If we say we get rid of Dudley, but then you guys will have to vote on that. But they are under the constitution. They do have the right to nominate the person. We can only say, look, you know, Mr. B or Mrs. B are not attending and could you please replace. And we have done it, but we can't force them. So, I mean, you know, your point is really valid because members who are appointed should only put their names forward if they have an interest in a particular committee. So, but Mary, you wanted to come in. Is that all right to come in now? I agree with the points you're making, but also it's my first time here. Because the previous appointee to the committee could not make it because he's got a day job. He was elected member, but he could never attend. So we swapped, so you've got little old me, and you'll have to forgive me. But with elected members, there are sometimes things that do crop up, meetings crop up unexpectedly, and real life comes into the equation too. And, you know, maybe a family matter or a, you know, a private matter happens. And there are reasons. I mean, the next meeting, I will have to give my apologies for because I am on leave. I booked that a good months ago, so I said my apologies early. I know that's fine, Mary. I mean, I know you're the background, and you have been active behind the scenes as well. You have attended the training sessions, but your attendance, all your attendance is actually on record for the public to see anyway. So your training sessions and the work that you do behind the scenes as well is all noted. So we only write to members who, you know, they don't take an interest. That's where we, you know, have to actually write to the relevant authority, and we have done it. We have done it, Carol. But, okay, let's see if there's nothing else. Rachel, did you want to come on?

Yeah, I can, yes. So just to confirm, within the pensions committee terms of reference, there is a provision that requires attendance to pension committee and includes training, and there is a clause within there that says where an individual has missed three consecutive sessions. We would then take the steps that the chair has outlined in regards to writing to the member and confirming the requirement in terms of the training and attendance policies. The other key point as well is that it's ensuring that the committee is quorum so that it can take decisions on behalf of members and just confirm that we have been quorum over the last 12 months in order to take those decisions as well. So take the point, Councillor, as the chair says, we do escalate where we need to. >> Okay. Can we agree the recommendations as outlined on the front of the report? Thank you. Can we move on to item agenda six, which is the statement of accounts, and Chris, this is your paper. Thank you, chair, and good morning, everyone. This paper provides a draft set of accounts for the year ended 31st of March, 2024 for approval. Approval is also sought, as in previous years, for the delegation of authority to the chair for the approval of the final set of accounts and annual report following completion of the audit. The committee has to note that the draft accounts will now be subject to audit by Grant Thornton, the council's external auditor. The audit is scheduled to commence on the 1st of July, 2024, with completion expected in the autumn. As with previous years, the funds accounts will form part of the council statement of accounts, with the fund receiving its own audit opinion and audit findings report. In terms of the accounts themselves, the position reported is consistent with the performance of the fund reported over the last 12 months and reports a net asset value of the fund at 21.2 billion. Within the report, details have been included of the investment management expenses following the annual cost transparency initiative data collection. We have seen data returns in line with the previous year, ensuring a high degree of accuracy in the total value reported. This exercise is focused around fees deducted at source and is key to ensuring the accurate disclosure of costs within the accounts. Actions taken by the fund in line with the debt management policy are highlighted within the report and focus on the review of historic debt balances within the accounts. In summary, the committee has asked to approve the accounts for the year ended 31st of March, 2024, ahead of the external audit commencing on the 1st of July. And approval also sought for the delegation of authority to the chair for the approval of the final set of accounts and annual report following the completion of the audit. Thank you. Thanks, Chris. Any queries? Let's start off with Ben first. Looking at the statement accounts, specifically the tables on page 35 and

1. I hope I'm correct in saying this. It looks like we lost 102.9 million on the infrastructure portfolio and we paid 6.2 million in infrastructure management fees and paid 6.2 million on infrastructure performance related fees. Why do we pay someone 6.2 million on performance if they lost 102.9 million pounds? Thank you for that, Ben. Chris, are you going to take it? I'm going to take it to start with, yes. So, as you've identified, Councillor, the fees are made up of a number of different components, both in terms of those base fees and the performance. Talking more broadly than the infrastructure assets for the moment, we have only over 240 different investment mandates across the fund which those fees all relate to. So, there's not necessarily a direct correlation between those performance fees and those specific individual items that perhaps causing that investment loss. In terms of the fees, they are monitored really closely as part of the investment management within the fund. And in terms of that relation with the performance, that's going to be covered in one of the later papers today. Thanks for that, Chris. Sorry, just before I bring in the others. When you press the mic, it goes red. So, actually, just be careful, the camera tilts towards you. So, if you don't want to be on camera, don't press the red button for the time until you've called. Otherwise, you know, you'll be seen. Then I'll make a note and then when I ask you, then just switch it on. Otherwise, the camera will stay focused on you. Are you okay with that response? I will ask further questions during item 16. Okay. I feel like we shouldn't gain too much detail now. Okay. Thank you for that. Thank you, Chair. On page 21 and 4.2, I can appreciate that due to the wide variety of profiles within and between comparable size funds benchmarking is difficult. I'd like to know who is the funds benchmarking partner mentioned in 4.6, page 22. And although it's good that we've got comparable data in 4.2, 22, 23, 23, 24, could we have benchmark data as well given that we have got, you know, a benchmarking partner? That's my first question. Okay. I don't know if you want the others, but -- Deal with that. We'll take them in turn, if that's all right, please, Councillor. So, in terms of who the benchmarking partner is, so it's an organization called CEM benchmarking that are focused on the benchmarking of pension schemes both in the UK and worldwide. In terms of the outcomes for that work, that will be shared with committee in terms of the work for the 23, 24 accounts and the investment management fees. They've started that work at the moment, but are compiling it with the timing. So, we'll have that by before the end of the calendar year. Thank you very much. And then, with regard to debt management, which is page 23, 5.5, please, can we, as a pension committee, have the recommendations that were made alongside the policy which resulted to meet those recommendations? Certainly, I would very much appreciate that. And then, page 23, because that might go alongside it, 7.2, is I understand that the fund is considering the guidance, and in the light of that, I wondered if it was possible to define what best endeavors mean and the implications, you know, of this guidance. It's so vague a term to use, isn't it? Best endeavors. So, I would really appreciate an understanding of what we are understanding that to mean. Thank you, Chair. Christiano. Yeah. So, in terms of the recommendations from the debt management policy, some of the key ones are picked up in the internal audit report a little bit later today, but we can provide a more detailed understanding of that outside of the meeting. On that one, and we'll pick up those as part of reviewing the policy as well, and we can pull that out at that point as well. In terms of the question on best endeavors, this is very much recognizing within the guidance that this has come out rather late in the year. So, some information may not have been collected throughout the calendar year that would be needed to create the information that is being requested to be reported. So, the approach we are taking is to do that, as it sort of says, to do our best at making sure that we're able to report on all the different aspects within this year's report, but then looking at how we set up for future years to make sure that everything that is being requested within that guidance is available to us. Okay, can I bring David in, and then Leslie, and then Paul, you want to come in? Right. On page 25, it shows contributions receivable in the current year of 766 million, and in the year before 451 million, and I'm sure there's a very good reason for it, but it does sound like a very big jump in contributions. Can I ask all my questions at once, or do you want to do it one at a time? Chris, how do you want to play it? Three, or maybe four. Okay, so the big jump in contributions, I'm sure there's a very good reason for it. It can't only be Solihull's prepayment. Yes, I noticed on page 34, there's the value of the fund's asset, 103 percent of the funding target, so I calculated we were overfunded by 679 million pounds, which I think is a very interesting situation to be. I mean, especially in the context of local authorities who are looking to make cuts given the very difficult financial settlement that they're facing, is this a way of actually giving some support to local authorities in what's going to be a very difficult year? But maybe that's not an issue for the officer, but just an observation that we are overfunded at present by 3 percent. Pardon me. And then on page 35, I just noticed that there was a reduction in life expectancy. Is that peculiar to West Midlands pension employees, or is it across the country? I was just wondering if we can dig into that a little bit. Are we peculiarly unhealthy in the West Midlands, or is that happening across the country? I think that's it. Thank you. We'll take them in the order that's been asked. So in terms of the contributions receivable, you are right in the fact that this is not just due to one authority's prepayment. What it is more of a reflection of is that three years ago at the last valuation, a significant portion of employers within the scheme chose to take that prepayment option, which then reduced the contributions received in years two and three. So that's the reason for the change from last year to this year. In terms of the question around the funding position, in some respects, it's not quite a finance question, and it is a funding question, but what we are conscious of is that number and looking at how we incorporate that as part of the next trial evaluation and this engagement with employers that are going on at the moment around that. And then on the life expectancy point, that is a value that is worked through by actually in order to calculate that. And that is based on the local area, but also has some national factors in. So I would expect that to be reflected in other areas of the country as well. OK, David. Leslie. Thanks, Jeff. On page 39, we learn that nearly 200 million pounds worth of stocks are out on loan, which I assume is to short sellers. Bearing in mind that short sellers put a great deal of effort into deciding which stocks they're going to be short of based on the risks involved, and they believe that they've identified that the stocks are overpriced, would we not be better off to consider selling those stocks rather than locking in our ownership by lending them out? Chris. This might be one that I ask if my colleague Shiv is able to answer from an investment point of view. Yeah, sure. Thanks, Chris. Part of those stocks which are lent out in the securities lending program will form sort of the passive exposure through the passive equity. So that is actually just getting the exposure to the broad market. So we wouldn't necessarily look to take active views on selling those positions. They are just representative of what is held in the index and the broader market. But it is a way for us to gain extra income on those securities. OK, Leslie. Paul. Thank you, Sharon, through yourself. This point has kind of been touched on, but I'd just like a further explanation. So going back to page 21 on 4.1, and first of all, just let me know if I've actually understood this correctly. And if I have, then please give me an answer. So 2023/24, the cost was $102 million compared with $96 million in 2022 and 2023. So it's clearly gone up. Now, could you explain why it's gone up so much? And also, are we getting anything extra for the amount of money that we're paying compared with the $96 million now that we're paying $102 million? OK, thanks. Chris. Yes, so the main driver behind that increase is the increase in the value of the fund's assets over the period. So a big part of that increase is actually related to equity assets and their performance over the last 12 months. So that increase is really directly apportioned to the rise in the net asset value of the fund. So in terms of how are we getting more for it, we have more assets off the back of that work. Do you want to? Yeah, thank you, Sharon. So again, the second part of the question is, so that increase is because of the assets, the value has gone up. So we're not actually receiving anything extra. It's simply because the value of the assets have gone up. Yes, that's correct. OK, anything else on the paper? No, no. Can we agree the recommendations as outlined on the paper? Great. Thank you. Can we move on to item Agenda 7? And that's the budget monitoring. Chris, that's your paper again. Thank you. This paper is the quarterly report on the fund's performance against its operational budget and covers the year to the 31st of March 2024. The committee is asked to note that the final position is an underspend of $4.6 million, which is in line with the forecast presented at the previous meeting. This is made up of $2.9 million underspend in operational costs and $1.7 million underspend in investment management fees. Operational underspends were driven by an underspend in employee costs and in service development. Service development underspend relates to projects that have been reprioritized to future periods as the focus has remained on the pension administration system transition through the second part of the financial year. With the cost moved into the 24, 25 budget. Employee costs reflect the ongoing recruitment challenges that the fund has and is experiencing in the recruitment of planned vacancies to increase capacity. As previously reported, this is due to the specialist nature of the roles and high competition for those roles across the sector. Despite this, the fund has been able to increase its benefit operations headcount by 30% between September 23 and April 2024. These out-term figures are included within the statutory accounts within the previous agenda item and will form part of the fund's external audit. Thank you. Thanks, Chris. Jane and then David. On page 62, referring to turnover of staff, what is the turnover like compared with others? And in view of the costs of training, what's being done to retain staff? Thank you. And so in terms of turnover, that's been fairly stable, actually. And whilst we've seen some levers, it's no different to what we'd normally expect. And in looking at other similar organizations, we're on the low end of that. I haven't got the percentage to hand at the moment. In terms of the retention of staff, we've done a number of initiatives over the last 12 months, both in terms of the support from a mental well-being point of view, but also from the development around skills to take us forward for the future, both those soft skills, but also some of those technical skills as well. So we're working to evolve that culture and environment within the fund to make ourselves and keep ourselves as a place that people want to stay, but also to support them in their career development as well. Okay. David. Yes, it's on a similar point. Really quite concerned about the underspends on employees, because we're all aware of the difficulties in the administration of the pension fund at present. Just a thought, really. In Solihull, we have something called market forces increments, which we use to boost the salary offer to social workers, because in Solihull, we have a big need to increase the size of our children's services workforce. And that's had some impact, we believe, in actually attracting additional staff to work for the authority. I'm just wondering if in Wolverhampton you have the same power and whether you're able to perhaps think in terms of offering something which isn't just a bit over the market rate in order to get more people to come to work at Wolverhampton. So say two or maybe even three market forces increments in order to have a good offer to get people to come and work here. Chris. Yes. So in terms of whether we've got the ability to do that, that is one of the tools that exists to support that recruitment. And over the last 12 months, we have been looking to use those to support the recruitment. The real challenge is at the moment around that the market for senior pensions administrators is very competitive, and it's something that is affecting not just us in the public sector, but also is having an impact for public sector organizations as well. Could I just-- my understanding of what the officer has just said is that you've considered it, but you haven't done it. I'm just wondering why you haven't done it, because it seems such an obvious thing to do if you're actually failing to recruit the people that you need. Thank you, David. I mean, just to confirm, we do use market forces supplements on a targeted basis for recruitment in roles across the fund. In doing so, we take advice from the Wolverhampton City Council, and we have to follow the HR advice and practices and adhere to the policies of this authority within all our recruitment practices, including hiring. So we do look for and continue to explore opportunities to enhance our recruitment success through those measures, but we can only work within the parameters of the policies in which we operate. Could I just come back? Yeah. I think I understand-- I'm understanding all the words. So I think what you're saying to me is that Wolverhampton is stopping you from using market forces increments. Is that right? Rachel, if you want to-- No, we have a policy and we have a process which we are actively using, but we have to be cognizant of the fact that we are an employer within the local authority within the region that has its own risks to manage in terms of its employment practices, and we have to respect those. Yeah, that's a valid point, David. And it's something that we've sort of touched on over the last few years. Wolverhampton Council, Sandwell Council, or any council cannot do their own thing, right? Because we do have policies, we do have procedures in place, and we have to abide by them. I mean, section 2.2 of this report is really important because some of the issues we face is due to recruitment and retention. I have had discussions with the chief executive on how we need to and how we should move forward, and we are looking at various options, David, because it is really difficult for the local government pension funds in the UK to operate. We're always firefighting, and that's not the way forward, and I think committee will be aware that we need to look at all options available and take the best option at the appropriate time. But as you know, the wheels in local government move very slowly, but it's a very important issue you have raised and which we are trying to deal with. I mean, you mentioned the market forces. The Solihull situation, from what I can recall, was that Dofstead actually put children's services in special measures, and then you had the local commissioner who was also critical as well. So, you know, you guys -- well, not you guys, but the Solihull Council had no choice, and that's, you know, common with other local authorities as well in regard to social services. You have to put the extra resources in for children's services and adult services because once they're put in special measures, it's out of your hands. So, I hear what you're saying, and I, you know, do agree with you. We all agree with you, and we are trying to take the pensions committee in the best way forward, but at the moment, we are really struggling with recruiting and retaining stuff because, you know, you can't stop people leaving if a better opportunity comes. You have to say good luck, and we've had good officers leave this pensions committee. We really have, and, you know, it's -- I was standing when they left, but we had no choice. We had no choice. David? David Greenhill Yes, I want to avoid a conversation because I realize we're in a committee, but I would say in the case of Solihull, some of us were warning for some time about the problems in children's services. Now, once the, you know, once the bomb hits you, you've then got to recover from it, but it's best to recover from it beforehand and take measures in advance. So, you know, it's best to anticipate. I'm just wondering what other measures there are. Are most of these people living in London because they work in the city? Do we need to think about relocation costs? You know, it's interesting to know what can be done in order to resolve the situation. Okay, well, we'll hear what you're saying, and then we'll cover it. Yeah, yeah. Any further issues on this paper before we move on? No? Can we agree the recommit? Sorry? I had put my light on. Sorry, did you want to? Yeah, I agree with what's been said, and I know it's extremely difficult, but in Birmingham, we've got an awful lot of people that are going under VR, and people are very, very worried about how long it takes for their pensions to come through. It's taken a long, long time. You know, I know you're doing what you can, but I can't emphasise enough how frustrating it is, not just for people in Birmingham, across the wider West Midlands. Yeah, Mary totally agreed with your comments, and we're aware of that, yeah, yeah, yeah. Okay, can I move the recommendations as outlined in the front page of the report, please? Thank you. Can we move on to the item agenda 8, which is the admin report, Simon? Thank you, Chair. So this report provides committee with an overview of administration performance during the period, but also with some refresh content to bring that up to date. Focusing on the key points, section 3 provides a membership summary, and to note there has been a small adjustment made to ensure consistency reporting as per the footnote. Also within this section is an update on casework and the focus points during the period. In particular worth drawing out is the increased output on retirement quotations and payments. Appendix A charts the month-on-month progress across certain processes, with section 4 covering transfers out in more detail. Switching attention to employers, section 7 confirms our employer base continues to grow within excess of 840 at current count, and this growth, while steady, is perhaps heightened versus other LGPS funds where employer numbers in many cases are plateauing. Appendix B covers 17 applications for admission to the fund, for which I would be grateful for committee's approval or comment. And in terms of employer performance and with particular focus upon monthly data submissions, as at the end of May 2024 we had received 76% of the expected files, with engagement ongoing for those employers who remain yet to submit. Section 9 brings reporting more up to date, with the salient points being, firstly, a continued improvement in processing rates generally, exploring the availability of additional resourcing from third parties to complement our own resourcing and a redirection of resource. As touched upon in more detail in the following report, regular communication with our customers on progress and confirmation of processing timescales where possible. And then finally, the developing KPI reporting, an example of which is provided in Appendix C. So, in summary, progress across a range of items, noting significant volumes, and recognizing the need to maintain and improve performance across all areas. Thank you, Chair. Thanks, Simon. Carol first. Thank you, Chair. I've got two questions. 7.2 on page 73, it's very, very obvious that academies are the biggest percentage of the total number of bodies that pay into the fund. I wondered what percentage academies are of the total income coming into the fund, and therefore our exposure to that as employers that are paying in. And the second thing is on page 74, 9.3, where I can see there's been a huge improvement in the last three months, where would you like it to be? What, you know, what percentage of the whole is the improvement that has been made, and what percentage of the whole are the improvements that need to take place? Thank you, Chair. Thank you, Councillor. Yeah, so in terms of academies, I don't have the exact percentage, but I can find that out for you. But just to give you some comfort, it's a very small percentage of the overall income. It's very -- the total income is very much dominated by the local authorities. So it's probably in the order of less than 10%. But I can confirm the exact figure for you. In terms of improvement rates and where we'd like it to be, I think it's fair to say where we'd like to be is a position where our output exceeds incoming or certainly matches the incoming volumes coming in, and we'll continue to erode the caseword, which is outstanding. So where we'd like to be is matching incoming without going and removing those backlogs where possible over time. So a continued progression of where we've been, I think it's fair to say. Okay, David. I suppose it's another way of looking at the same thing. The key question for my members is if they retire -- I think Mary made reference to this -- you would normally expect and have expected to get your retirement sorted out within the month, maybe five, six weeks. At the moment, it's taking months, and it's turning people's lives upside down. I'm a bit worried because I'm retiring in a year's time. So I'm just hoping it's sorted out by then. But so when are we going to be getting it back down to four weeks for retirements? Thank you. Yeah. So when it comes to payments of retirement, so retirement's a two-stage process. The first part is the quotation. The second part is the actual payment. The first stage requires employers to provide us with information and also the member to elect. So there are some timescales which are out of our control. The second phase, which is the payment piece, we are now less than eight weeks, in some cases, within the six-week period you alluded to, to start with. Our target and our aim is to get it down to four weeks. But we forecast that will be fairly soon. The second piece around the retirement quotations, as I say, there are elements which are out of our control. Our next aim is to be able to provide active members, so those who are going from employment to taking retirement, with a definitive timescale. And we're looking to do that within the near future. So you've heard it from Simon, David. You're going to retire in 12 months' time. I'm pretty sure it's going to be okay. Make sure your employer sends the correct pieces of paper and information on time. And you'll get your benefit on time as well. Okay. I'm sorry. Could you just repeat that? What is the timescale that you hope to get it down to? Are we sitting now and what will it, you know? Of course, yeah. So there are two stages to it, as I say. So the payment phase, we'd like that to be four weeks. It's currently in the order of around six weeks. That's the second phase. The first phase, which is the quotation, because there are elements out of our control where it's reliant on an employer or a member election, it's difficult to place an end-to-end timeframe on it. But we still want those to come back to where they were before go-live. Okay. Thanks. Thanks for that. Just when you do speak, can you speak into the mic? Because when you, you know, looking at the person, you're answering too, Simon. It doesn't follow through. Right. Any further questions, queries on the paper? No. Can we agree? The recommendations as outlined on the front page. Agreed? Thank you. Can we move on to item agenda nine? And that's a customer engagement paper. Simon, that's you again. Thank you, Chair. Yes. So as at prior meetings, this report confirms the engagement activity undertaken by the fund across our customer base. Section three summarizes the focus points with regards to members and feedback on member service events, which is contained within appendix A. Our outreach has been maintained over the period with a range of events, engagement, and communication. Just to cite a few examples, we have roadshow events, engagement forums, website updates, and dedicated updates for members covering 150,000 members for whom we hold e-mail addresses. The customer services team remains an area of high activity with significant volumes of calls and e-mails as summarized in appendix B. In particular, it's worth noting that calls are up 16% on the prior quarter and e-mails broadly static with a 2% rise. At the same time, the length of calls has increased on average by a third when compared to last year. Nonetheless, answer rates continue to improve and are now in general close to or above our target of 85%. Section five provides an overview of complaints handling and management with a 47% decrease in the numbers versus the prior quarter. Employer support and engagement remains a priority for the fund with a range of activity undertaken during this quarter. This work aids our employers with their roles and responsibilities and underpins the fund's ability to provide timely and accurate information and benefits for our members. Consistent with the prior report, section seven provides an update on engagement since the first of April to provide committee with a more current picture. And of particular note and encouraging is the use of the estimate functionality by the member portal. Finally, I'm pleased to confirm that the fund has been reaccredited for customer service excellence with five areas of compliance plus highlighted where we achieved above and beyond the standard required. This is summarized in section nine, and we will share the final report with September's update. Thank you, Chair. Thanks, Simon. Any questions, queries? Carol and then Joe. Thank you, Chair. At the end of last year, when -- as a result of a survey, we understood that many customers need to understand what the terms responsible investment mean. I understand that as a result of the change and our IT adventure that, you know, that there's a need to share that and to make sure that people are aware of those changes and what they need to do. So I understand that potentially that need has gone on the back burner. Have we reached a stage where we can start to think again about sharing an understanding of what responsible engagement means with our customers? Yeah, thank you, Councillor. So one of the things I can confirm is that we are due to reengage with our members on responsible investment, and Shiv might be able to provide you a bit more flavor of what that can take, if you don't mind me putting you on the spot. No, sure, Simon. I think as alluded to in previous meetings, we have looked to actively engage with members around responsible investment activity and initiatives. So this started with the Responsible Investment Survey, which was launched last year. And following the back of that, we have members of the Responsible Investment Team have attended member engagement forums to provide more information around our approach to responsible investment, setting out what we do, and also providing an opportunity in a forum for the members to ask questions. The plan is for continued engagement at those forums, as well as attendance at member road shows as and when they take place. We've also published a responsible investment leaflet, which has been handed out to members, against providing some information around our approach and the activities that the fund undertakes. The other aspect that we are continuing to work on is providing more member-friendly communication, so we are aware that some of the reporting that is produced is quite detailed and onerous and difficult to understand. And whilst that may serve a purpose for certain stakeholders, it may not be the most member-friendly, so we are looking at more summary documents, which are kind of more easy for members to understand. Okay, Jane. On page 86, section 4.2, you list the most popular queries to the contact center. It might be useful to have some numbers attached to those to see what percentage of queries are about accessing pension funds compared with members updating their personal circumstances. And also, just adding to that section, how many queries are coming in from members about the investment, responsible investment, so that might be added in. The second question is more mundane. 4.4, you've extended your access on the phone lines, but I note that it's not available over lunchtime, and that's actually when a lot of people are able to make those phone calls when they're not physically working. Would a staggered lunch hour for employees help and support that? Thank you. Thank you, Jaya. So to answer your first question, yeah, it's a very good point, and I'm happy to provide you some numbers. Just to give you a broad feel, the members, the number of calls that are coming through around member self-serve are broadly a third of the total, so the rest would be more around processing. But I can break those down, those individual elements, in terms of total volumes. On the call opening position, very good question, and it's something we're very mindful of, in terms of when members want to access it. And with that in mind, we're looking to open from the 1st of July, so it's before day. We're actually currently trialing behind the scenes, so it's not advertised, but we are looking at how that might fall. Okay. Yeah, that's a good point, Jane, actually, because, you know, most services are available from 9 till 4 or 5. And, you know, it's all about managing the team. I'm sure that people don't have a one and a half hour lunch break. Never did when I was working. So, you know, it's all about managing and making the service more proactive and available. That's a key thing, because you just don't know when people will ring, and especially those who are working. That's their only opportunity, actually. Sometimes I wouldn't want to see them doing personal work during their working hours. So, just take that on board. I think we have raised this issue before, Jane. So, yeah, it's a very good point. Any other questions or queries on this paper? No? Can we move the recommendations and agree the recommendations as outlined? Yeah? Okay. Can we move on to item agenda 10, which is the internal audit. Martin? Mark. Thank you. Thank you, Chair. The report presents the internal audit annual report and opinion for the work we have completed for the 2023-24 financial year. The objectives of our work are to review the fund's risk management arrangements, governance, and controls. The audits form part of the fund's overall assurance framework. We work to a risk-based plan, and audit reviews are completed following the public sector internal audit standards. We are only one element of the assurance framework. The fund also receives assurance from external audit and other commissioned consultants and experts. In accordance with the public sector internal audit standards, we are required to give an audit opinion on the adequacy of the management, governance, and controls that we have reviewed and can confirm that we can give a reasonable assurance opinion. This equates to the external audit's unqualified opinion and is the highest opinion we can give. The table in the report details the work we have completed this year. There have been four satisfactory and three substantial opinion reviews with no limited reports. The fund monitors the recommendations we have made to ensure they are actioned, and as part of the routine internal audit work, we also revisit the recommendations to ensure they are fully embedded into procedures. We have also completed 30 checks to ensure that organisations seeking admitibody status to the fund are financially sound. We will continue to work with the fund to manage risks and improve controls. Thank you, Chair. Thank you, Mark. Any questions, queries? Carol? Thank you, Chair. Congratulations on getting a great unqualified audit report. It is the best possible outcome that could be achieved. I'd like to ask about page 107, where we've got a table where it says employer onboarding, and only one was accepted, but on page 108, it says three AMBA recommendations were accepted. So I wasn't sure if I was interpreting things correctly or not. So for us, it's page 107, and employer onboarding, there's only one, which was the number accepted, out of three that's in the AMBA column. And then on page 108, with employer onboarding, it said that three AMBA recommendations were accepted. I think that's a typo. We identified three AMBA recommendations which were agreed with management. Yes, I think actually that's probably a typographical mistake, I'm afraid, I think, on that one. That's okay. Sorry about that. Yes. It should be for -- yes. Apologies for that. Right, then. So that will be changed then? Yes. Okay. Thank you. Thank you. Mark? Yes. Carol? Yes, that's fine. Any further queries? No. Thank you. Do you feel that you have adequate resources to form your duties to the pension fund, bearing in mind other calls on Wolverhampton internal audit time? Yes, the coverage we give, I think, is adequate based on what we've agreed and what the expectations would be of the fund. We don't feel that there's any areas that are particularly missed or that there's a lack of resource to complete our work. So I don't think there's an issue there. Okay, Leslie? Thank you. And looking at consultancy advice as opposed to -- or as aside from audit work, do you feel that you've been sufficiently engaged in consultancy given the implementation problems with the computer systems? Mark? Well, the consultancy work is sort of additional to our work as such. So obviously there's various requirements on the fund and so forth to complete the pieces of work and provide assurance from other experts because obviously we can only provide assurance around certain areas. So as regards to computer system, we can look at the way it's implemented and the controls built into it. But obviously there's other technical aspects that would need to be addressed by other experts. So from our point of view, I think we receive all the information we require because we can't -- we can't actually guarantee that all the problems will be resolved. We just provide an assurance of the way the processes are being managed really. Rachel, do you want to come in? I just had a general comment in relation to the pension administration system and the different independent assurances and input that's been sought will come on to that in a later paper. But I did also want to flag it came to the previous meeting rather than this meeting and recognizing this is some -- for some -- the first meeting of the municipal year within the audit plan for this year, there is an item around looking at the funds financial processes where there have been system change. And so we do anticipate that there will be aspects picked up within that and that is planned for the forthcoming year. And just again referring back to the dialogue we had at the previous meeting, ensuring there were a number of parties looking at a number of different aspects, if you like, because it's a broad change, but there will be through different avenues, different pieces of assurance that do get bought to this committee to confirm. And one of those I expect is part of the work of the current year audit plan, whereas this is a backward looking on the prior year, if that helps. Thank you. Yeah, there are aspects of the implementation which have led to non-standard approaches such as running supplementary payrolls. And I would have some concern that there are proper controls in place over those exceptional activities. Yeah. Okay. Mark, did you want to come back on that or -- Yeah, I mean, with that side of things, we haven't specifically looked at the payroll elements in the last year's audit. I think the practices, if there were concerns, we would obviously be asked to look into those. But I don't think that the practices, as far as we're aware, have changed considerably. It's just the process has had to be amended slightly. And obviously, if it's something that needs to be looked at, we can look at it, perhaps, in the coming audit program, really. But we're not aware that there's any problems specifically around payroll and the control aspect of it. Okay. Thank you for that. I mean, with the internal audit or auditing -- and firstly, you know, to deal with a problem, you have to identify it. You have to recognize there is a problem, and that's the only way that you can actually resolve that problem. Internal audit is just one tool in the process. We do have external auditors, as well, having another look. But where required, we will put in additional resources and ask internal audit or even external audit to look at a specific problem. That's the only way open. But I have to say, the pension trust is quite open and transparent in the way it does work. And, you know, there is a track record. And it's important that, you know, we are open and transparent and, you know, we have to recognize problems and then deal with them in the best way possible. If there's no further issues or queries on the internal audit paper, can I move the recommendations as outlined on the paper? Agreed. Agreed. Thank you. Can we move on to -- Mark, thank you for your time, and you are more than welcome to leave. I know you've got other things on today. Thank you for your time and highlighting the report. Can we move on to item agenda 11, and that's the local pension board annual governance paper. Hayley, are you going to take this? Okay. Thank you, Chair. This is the annual report from the local pensions board, which updates the committee on the work undertaken by the board during the previous year. The report includes an update on board membership on page 112, noting the in-year appointments of Andrew Felton, director of resources at Solihull NBC, as an employer representative, and Sarah Feeney from Unison, as a member representative. There is currently one employer representative vacancy on the board due to a recent resignation, and recruitment to fill this vacancy will take place over the summer. Details of the training undertaken by board members is provided on page 113, with training hours for individual board members included at appendix A. As the committee will be aware, training hours for all governing body members will be included in the fund's annual report, which will be published later in the year. Details of the work undertaken by the board during the year are provided on page 113, noting the board's continued focus on customer servicing, following the impact of the pensions admin system transition, and fund resourcing, as noted on the fund's risk register. Page 114 of the report refers to the scheme advisory's annual report, highlighting national averages in areas such as investment returns, asset allocation, funding, and governance. Just to note, at the time this report was published, the annual report was pending publication, the scheme advisory board have now published their report, and details will be circulated to all members after this meeting. Thank you, and happy to take any questions. Thanks. Thanks for that, Hailey. Any questions, queries on the paper? No? No? Can we then agree the recommendations as outlined in the front page of the report? Agreed. Agreed. Thank you. Can we move on to item agenda 12, which is the risk and assurance paper? Rachel, are you going to do that? Yeah. Thank you, Chair. Yes. So, this report presents the quarterly risk register, noting the ongoing focus of the fund in the transformational change program currently underway, and we have updates contained in the preceding and forthcoming papers, which provides more detail on this work. The governance team continued to work with our operations team with individual case review being conducted where escalations are required, supporting on cases of financial vulnerability. A new theme this quarter follows the announcement of the election and the impact this will have on anticipated regulation and guidance, noting there is now a pause in new legislation forthcoming with the potential for uptake in the autumn once parliament resolves -- reconvenes, sorry. The risk register notes the ongoing national and regulatory change, which has the potential to impact the fund and its customers, members, and employers, together with national oversight and reporting asks, which have the potential to lead for further change outcomes. As noted within the report, there are no concerns relating to the fund's overall compliance management in relation to information governance. The report does note the progress made in relation to our monthly submissions process, as outlined by Simon in the earlier report, noting that this is the first year under the new system of receiving files with front-loaded validations. These require employers to cleanse and rectify data prior to submission to the fund for their active members, with initial indication showing that this has improved the quality of data coming to the fund at first point of load over the last 12 months. In summary, we continue to focus on working to improve services for members, noting the current focus on pensions in the wider environment. I'm happy to take questions, Chair. Thanks, Rachel. Any questions, queries? No? Okay. Can we agree the recommendations on the front page of the report? Agreed. Agreed. Thank you. Let's move on to item agenda 13, which is the paper on responsible investments. And Shiv, the paper's yours. Thank you, Chair. So this paper sets out the quarterly routine responsible investment paper, which sets out responsible activity -- investment activity undertaken by the fund over the three months to the end of March 2024. The RAs to note the completion, publication, and submission of the fund's 2024 Annual Stewardship Report, which sets out stewardship activity undertaken over the calendar year of 2023. The committee shared a draft version of the report at the March committee meeting. And following this, the final version of the report was submitted to the Financial Reporting Council ahead of the deadline at the end of May. And the fund is expected to hear back the outcome from the Financial Reporting Council in September to confirm whether the fund has met the required standard to retain its signatory status to the code. The rest of the report sets out engagement activity undertaken by the fund and its engagement partners over the quarter, set out in line with the fund's agreed for engagement themes that were approved by committee at March, and also sets out some of the voting statistics in relation to voting activity undertaken over the quarter. The fund has continued to receive a wide range of correspondence on various responsible investment activities. And in line with the previous quarter, we have seen increased correspondence in particular in relation to companies and holdings in relation to the aerospace and defense sector linked to the ongoing conflict in the Middle East. As previously reported to committee, the fund's engagement in this area tends to focus on ensuring that companies adhere to and implement robust human rights due diligence processes in line with best practice and international standards, such as the UN's guiding principles. The fund has also prepared a position statement with regards to its overall approach and exposure to companies within the aerospace and defense sector. The position statement was shared with the fund's governing bodies prior to this meeting and will be published on the fund's website following the meeting today. So happy to take any questions. Thanks for that, Shiv. Bali, and then Karen. Thank you, Chair, and thank you, Shiv. So I think there was just three conflict zones that I want to highlight. So in general, obviously, support the defense industry in terms of security for the country. But there are concerns about involvement in areas where it could promote instability, and some of these other conflict zones well highlighted. So the three that I'd like to bring to your attention, which I'm sure you're already aware of, are the ongoing conflict in Ukraine and the Russian aggression. So maybe an update on our investment stance regarding that, because obviously, Russia is impacted with the sanctions by the West. But then also, you know, some of their concerns around how Russia is escaping those sanctions through third countries and whether there is some insight that you can provide in terms of how we could do that to make sure those sanctions continue to be effective. There is some concern that they are managing to find a way around those sanctions by third countries, you know, for example, India and China in terms of trade and selling that oil, et cetera. Second conflict zone is Israel and Palestine. So you know, massive concerns around instability there and, you know, atrocities committed by, you know, various forces or alleged atrocities. So for example, in Israel, Hezbollah and Iran back proxies and continuing, you know, atrocities from Hamas as well. So how can we, as a fund, you know, be limited in what we can do, but in terms of our guiding principles in that area. And of course, the third area is Sudan, the ongoing conflict in Sudan, and the, you know, the genocide going on or alleged genocide going on in the Darfur region with the ISIC, the RSF forces, the paramilitary forces, which are allegedly backed by some Gulf states, including United Arab Emirates. So you know, whether there are some insights that or maybe that's something that you can look into, you know, after this meeting. Thank you. Thanks for that, Baloo. Thank you, Councillor. Yeah. So as you said, all very valid and complicated situations. And I think one of the things that we have to be mindful of the complex nature and the various links that this creates throughout supply chains. And it is obviously very difficult to start when you start to think about how many actual companies are actually impacted by this or have some involvement throughout the supply chain. So then therefore, things like exposure does become quite difficult to actually quantify. With regards to the first point around the Russian exposure, obviously at the time, we did report to committee of the exposure that the fund held into Russian assets, which was very low around in the order of 0.3% of fund's assets. Clearly, everything through our third party investment managers who run the mandates on our behalf have been compliant with the relevant sanctions. And exposure has then reduced either through setting of assets when available or through write downs essentially of those assets. So there is essentially minimal exposure to those at the moment. And we would rely on the third party investment managers to adhere to their principles in regards to making sure those sanctions, as far as they are able to, are complied with. As we've mentioned in regards to the ongoing conflict in Israel, that has typically tended to focus on human rights due diligence impact assessments and making sure that companies do comply with those standards. And again, that is the expectation that we set from our third party investment managers as well when investing in such companies. And on the Sudan, if it's okay with you, we can go back and find some more information to clarify that. Thanks for that. Belly, did you want to come in? Yeah. Just to follow up, I think you mentioned something around a position statement or something that we as members can provide to constituent queries. So I'm sure all members have received queries from constituents. So we would find some kind of information that we could provide not only to constituents, but to our fellow members in our respective councils, because they're getting those exact same queries as well. So that would be useful. Thank you. Thanks for that. Ben, Carol, did you put your hand up? No? You did? Yeah. If you go first, then Ben also. Thank you, Chair. As a result of going to a summit arranged by Central Pool, I was able to email and ask specific questions. And I understand better the rigor with which we expect third parties to follow the guiding principles of the fund. It is very clearly and firmly within the fastidary duty of the fund to ensure that we invest wisely with an eye on climate change, the effects of conflict on the fund, because our primary duty is to ensure not only that we can pay pensions, but also that we have a world fit for people to enjoy those pensions in. And that's very clear in the definition of fastidary duty. I am far happier now, having asked the questions received in the response from Central Pool, that we are very rigorous in carrying out and working within our framework of responsible investment. And I wondered if thought could be given to maybe showcasing one of our third parties and their approach to due diligence with respect to responsible investment. It's just a thought really, because having read the report, it's quite opaque really. That rigor isn't evident, that the consequences, the key performance indicators, timelines, the checking up, the due diligence, our responsible investment framework is the framework of third party providers. Our net zero goals aren't evident in this report particularly. And we are actually very good. We are actually one of the best ones up there. We are aiming, you know, to be Paris aligned, you know, with regards to the carbon footprint of the fund. And I'm not sure always that especially as a result of the responses, you know, very clear and satisfactory responses that I've received to my emails, I'm not sure that we always present that as our public face. And I just wondered if thought could be given as to how best we could do that. It's just to flag it up as a thought. Yeah, no, it's a valid point you made, and actually we'll take that onboard, Carol, moving forward. Ben, you wanted to -- When it comes to the exposure to companies in the aerospace and defense sector and position paper, before it's published tomorrow, could something about our international legal responsibilities be added? And could some of the choice of words be changed to consider the fact it'd probably be very heavily scrutinized by the public? And going back to the actual responsible investment activities report, with the Israel-Gaza war and the war in Ukraine, there's significant risk of reputational damage, erosion in public trusts and legal liabilities, as you say yourself in the report. And this is very important that we get the details of this correct. I was disturbed to read that while companies like BAE Systems were engaging with the pension fund for them, companies like FISOR completely ignored them. Can we do something to get FISORs to engage with the pension fund for them, is my question. Thank you, Councillor Evans. There will be follow-up from the pension fund for them. We know sometimes engagement, as we've alluded to previously, can be quite a long and drawn-out process. And often just take numerous attempts to engage with the companies before we get the sort of required response from them. But it will be on the pension fund's forum objectives to follow up where they haven't received adequate responses. And if not, then there should be, you know, as a fund, our approach would be to have appropriate sort of escalation methods in place. But it's something that we will be following up with them to check progress as well. Okay, Ben, okay. Any further questions, queries? David? Yes, thank you very much. I think we've all been very disturbed by the news and the events in Gaza. Referring to 315 and looking at that, there's recently been an international court's decision that genocidal acts are being carried out by the Israeli government in Gaza. In that context, in the context of genocidal acts, is it at all morally or in fact financially while advisable for us to continue to invest in companies that are profiting from that massacre that 37,000 people recorded was killed and the many thousands of others who have been killed and have not been recorded? In that context, I would expect my pension fund to be setting a lead and to be disinvesting from companies that are making profits out of death. Okay, thank you for that, David. Any further questions or queries? Yeah, sorry, that was Gaza. There's a couple of other things as well in this report. It's a very interesting report. And the section in there about Drax where there seemed to be a discussion going on. I think and many of us have seen the television report about Drax and what we must call a fiddle whereby they're clearing mature forests in Canada and claiming that that's in some way supporting the move towards net zero. Is it not quite clear that we need to actually move away from any investment in the owners of Drax because, you know, they're just taking the Michael really. This is just a complete green wash and we need to make sure that it's clear to them that they can't pull the wool over our eyes any longer. We need to disinvest from that or make them agree that they're actually going to stop the practice that they've been carrying out in clearing forests in Canada. And then finally 311 about water companies, my analysis of the situation is that if there is a labor government, there's likely to be a move towards regulation and to the preventing of companies from actually issuing dividends rather than dealing with the infrastructure problems that they've let rip for 30 years. In that context, I would have thought the value of those water company shares are going to drop considerably and if I was an investment manager, I'd be pulling out of that quite quickly because I don't think there's a profit to be made in the future from water companies if we actually get them to actually face up to their responsibilities and stop pouring sewage into our rivers on a daily basis. Anything else? No. I think that's enough. If you switch your mic off, then thank you. Any other questions or queries? No? Okay. Now, this is a very important paper and I think, you know, we do take these issues very seriously. One of the things I wasn't aware of was actually on 3.19, so that was quite an interesting paragraph where the Mitchelins and Butler, the Banks Brewery, about the women only being 40%. I mean, I wasn't aware of that actually, so that's really interesting actually. Are there any further questions or queries on the paper? No? Can we agree the recommendations as outlined on the front page? Agreed. And thank you for that. Can we move on to item agenda 14, which is the four quarterly investment report, SHIV? Thank you, Chair. This report sets out the quarterly investment performance reports. I just hold back until the members of the public leave. Okay. Sorry about that. If you continue with the report. No problem. Thank you, Chair. So, this report sets out the quarterly investment performance report for the fund covering the agreements to the end of March 2024. In terms of sort of the market backgrounds, it was a bit of a continuation of the themes from the previous quarter in the sense that it was a strong quarter for growth assets in general. This was backed by sort of strong, robust economic data and also strong performance in particular in relation to technology stocks on the back of increased enthusiasm or continued enthusiasm for AI. In regards for fixed-income markets, performance was much more muted and sort of flat for corporate bonds and negative for UK gilts in response to the increase in long-term interest rates that we've seen. In terms of the fund and total fund assets, including the Admitted Body Subfunds increased from $20.5 billion to $21 billion over the quarter, switching to the main fund performance was positive in absolute terms over both the quarter and the one year with quarterly performance of 2.8% and one-year performance of 8.1%. Performance, however, did underperform the benchmark over both periods by 1.1% over the quarter and 2.9% over the one year. Over the longer term, performance has been positive in absolute terms with performance much more closer to the benchmark over the three and 10-year period with slight underperformance over the five-year period of 0.7%. Underperformance for the main fund over the quarter and to a certain extent over the one year was predominantly driven by performance of the private equity and the infrastructure portfolios. With regards to private equity, the portfolio has actually performed well in absolute terms returning 1.4% over the quarter and 6.9% over the one year. The reason for the underperformance is purely down to the benchmark that it is compared to, and given the nature of private equity, there isn't a respective relevant index to compare performance with, so it's actually performance is compared to a public market equity index. And as we've just alluded to, we've seen very strong performance from public equities over the quarter and the one-year period. So over a short time period, we would expect divergence between the returns of the private equity portfolio and the benchmark that it's compared to, but over the longer term, we would expect that outperformance, which is exactly what we've seen from the private equity portfolio. So comfortable that that is meeting and continues to meet expectations. With regards to the infrastructure portfolio, we have seen significant write downs in select positions within that portfolio, which has caused significant underperformance over the quarter and has also fed into longer term numbers, such as the one year performance number. Further detail with regards to that, it will be contained in the following report, so happy to go into that as part of the next paper. Performance switching to the Admitted Body Subfunds has been positive both over the quarter and the one year. Performance has been, relative to the main fund, not as strong, and that is purely down to the allocation to Liability Driven Investment or LDI. As a reminder, these funds are aimed to move in a similar direction to changes in the fund's liability profile. So as the liabilities have come down, the performance of the LDI mandate has also fallen in value, which has offset some of the strong performance that we've seen from the growth and income assets with both of the subfunds. Finally, information in the report also sets out the relative asset allocations with regards to the main fund, this continued activity in terms of implementing the new target strategic asset allocation asset out in the ISS, and more work was done over the quarter to move towards that target with further information covered in the next report as well. So happy to take any questions. Yeah, just two things I wanted to talk about. The first thing I think is a typo. In the executive summary, you say the main fund underperformed its benchmark by 1.2% on page 142, and then on the next page, you change the number to 1.1% in section 5.1. And I'm just a bit confused by that, because 0.1% of a billion is quite a lot of money. So which one is it, is it 1.1% or 1.2%? Thank you, Councillor, and good spot. We'll confirm and check that number and confirm following the meeting, if that's OK. Thank you for that. And the second thing I want to talk about, we're going to talk about this a lot in the next item, is the infrastructure portfolio. The loss of negative 14.9%, that is something on the order of a magnitude of 100 million pounds, that is unprecedented. I am new to the committee, but I assume that isn't business as usual, am I correct? Yeah, absolutely, we wouldn't ordinarily expect that sort of magnitude of loss, and it isn't something that we have experienced generally in the past, so it is due to sort of quite unique and specialist circumstances within a few of the direct holdings there, which we can cover in more detail, yeah. Bali, did you put your hand up? Yes, I did, Chair, but I think it's more appropriate for the next possible, when you go into more detail on the infrastructure right now, so that will be up. So yeah, I'll probably wait for that then, sorry. Yes, it's 6.3, the actively managed global developed market equities. I just noticed the comments in the last sentence, since their inception, all three sustainable managers have underperformed their benchmarks. I know there's a lot of this, I've certainly heard a lot of cynicism about actively managed funds and whether it's a very expensive way of giving a lot of money to people to underperform. I'm just wondering if we're going to reach a point where we'll stop actively managing these funds, and actually just put it all into the passive equity assets, and then thereby get a higher return? Thank you. As you know, we are reviewing the composition of the equity portfolio as part of the strategic implementation that we're undertaking, so one of those things we'll be looking at, things like actively passive management, and the pros and cons. Clearly there's a cost, but also a diversification benefit as well, in terms of that, so there are very ... There's also differences in the type of passive management that you can get with new sorts of products available and index providers as well, so it is a complicated question which we will be reviewing internally and with the support of our advisors. In regards to the sustainable equity mandates, they have been in place for around about three years now, so again, whilst it's a reasonable time period, it's not a significantly long time period, and we know over that period of time has been a very difficult and challenging time for those types of strategies, given what we have seen in regards to things like oil prices. They have generally tended to struggle from a performance perspective, but it is again something that we consistently review. We have review meetings on a quarterly basis with those managers to assess their performance on their approach and it's something we're looking at in more detail internally as well. When it says sustainable, is that environmentally sustainable, or what does the word sustainable mean in that paragraph? Is it to do with our investments in green products, or what exactly is it when it says sustainable, or does it mean we're going to carry on investing in them? It's more of the former in terms of these are mandates that were specifically implemented by the fund, which had an increased focus on sort of responsible investment and that type of sustainable integration of environmentally social and governance factors. So they are mandates which will generally have minimal to no exposure to energy companies, for example. They are more in the green and responsible investment, sustainable aspects. That puts a different complexion on it is all I can say, because quite clearly there's been a spike in oil prices, which has probably benefited oil companies, and if they're specifically not investing in that area, then I can see why they might be underperforming compared to perhaps other assets. Thanks. Richard, did you want to come in? Yeah, I was just going to add actually that the questions in the dialogue is really helpful, because this part really illustrates quite well some of the challenges we have running a large investment portfolio, where we have a long-term requirement to deliver investment returns, and we will experience short-term volatility. We are looking to meet and achieve a number of different investment objectives, some around financial returns, some around sustainability objectives, and ensuring we have a responsible investment approach across the piece. What I did just want to draw out that's relevant for this particular quarter is we've had the active management. There has been a very different experience between the broad active management portfolios, which have performed very well, and those that are more sustainably focused. That's a short-term impact, but it's something that we have to acknowledge will exist, but the difference between active and passive is more complex than that, and I think this is just a really good question, and this is a really good illustration of the outcomes that can be generated by having variety within the mandates and having mandates that are doing different things. So we continue to have a diversity in what we're doing and review the financial case and the other objectives around that, but it will ultimately influence and impact performance outcomes. Yeah. Well, thanks for that. I mean, the last few years have been really, really difficult and really challenging for the pensions, not just for us, but right across the board, but I have to say, I mean, if you look at the paper, the return hasn't been that bad at all. You know, it really hasn't. Okay, it's not as high as previously, but we are living in difficult times. It's really been challenging, and well, everybody knows that, but so I have to just remind members, we haven't done too bad at all. We haven't too bad, and we are making a return for our members, and that's a key thing, and there will be some negative losses. That's to be expected, and you go back to the issue of the level of risk, but we are talking about big figures. But yeah, I mean, don't be too critical of yourselves. Look at the return, 2.8 isn't bad at all in the current climate. Thank you, Carol. Thank you, Chair. The paragraph at the bottom of page 148 says, Following approval of the new target asset allocation in March 2023, which is a new shift from liquid to e-liquid assets as a greater proportion of the fund, there's a transition to the new strategies being completed. However, it then returns, the next sentence says,The underweight to private debt and overweight to liquid income, an RDA as a result of commitments that have been made to private debt, which are not yet drawn down, so allocations will move towards the target over time. That sentence indicates that the new target asset allocation hasn't quite been completed yet. I just would love to check my understanding of that final paragraph. Sure, and it's due to the private debt allocation and how those types of investments work, so the fund has committed to private debt, and that will actually draw down the commitment over a period of time, so the commitments that we've made are expected to take us to that target allocation. It's just a case of there will be an implementation period as in when the manager finds those opportunities and then draws down the capital, so in the interim period there are those assets which will be expected to fund that private debt commitments, which have been made by the fund, are held in other assets such as the equity and the income, and will move over time. So that means we're not quite there yet? At the moment, it's not where it is, but from the fund's perspective in terms of making the commitments and the allocations, there's nothing further to do. It's just a case of waiting for that to be drawn down by the underlying manager. Right, thank you. Chair, with your permission, I've just got two more questions, very short ones. The first one is when you refer to sub-funds like West Midlands Travel Limited and Preston Bus Limited. At the point at which you use abbreviations, please give us a definition, because the definition actually was later on in the papers. I was thinking,Well, it's W-N-T-L,and then,Oh, of course it is," so please don't forget the need to do that, especially with councillors where this is not their day job. And the other thing is Oak would really appreciate context, because at the moment, with our illiquid profile portfolio, because the investment isn't huge, any individual investment has a disproportional effect, doesn't it, on the fund potentially. So if any loss in any one element of it could potentially seem really quite big, at what point will our illiquid profile become bigger enough that these fluctuations and dynamic checkships won't appear such a huge percentage, like we've got a loss in the building portfolio. That's because our building portfolio isn't a huge proportion of our total assets. Does that make sense, because it's all -- it's about the weight and the size, isn't it, of any one asset as part of the whole, and at the moment, because we haven't got a -- it's not very big, any loss in it seems disproportionately big. Yeah, so the investment strategies for the admitted body sub-funds have obviously been designed with advisors to make sure that they are appropriate from a diversification and a risk perspective, given the size of the funds. So whilst we would not expect them to have as many underlying allocations to the main fund, given the differences in sizes, the allocations that have been made will contain sufficient diversification within those funds that they are invested in. So you are right in the sense that, yeah, we would expect potentially there would be a larger impact from any one of those investments, but they are suitably diversified, given the size of the funds and the actual appropriate risk and return that they are targeting, because do bear in mind that these funds are quite different to the main fund in the sense that they are closed and maturing funds. So actually, risk management is a much greater focus in terms of the LDI allocation, making sure that the funding level is protected for the sub-funds, given their maturing profile. Okay, Carol. Any further questions, queries? No? Can we agree the recommendations as outlined in the report? Agreed. Agreed. Thank you. Okay. The next paper is the exempt report. Can I move the resolution? Yes, sir. Okay. Agreed. Right. So this is all exempt now. Page -- sorry, not page -- item agenda