The Pension Fund Committee of North Yorkshire Council convened on 28 June 2024 to discuss various administrative, financial, and investment matters related to the North Yorkshire Pension Fund (NYPF). Key topics included the administration of the pension fund, budget and cashflow projections, investment arrangements with Border to Coast, and a quarterly funding and investments report.

Pensions Administration

The committee reviewed a report from the Treasurer on the administration of the pension fund. The Head of Pensions Administration provided updates on several key issues:

• McCloud Case Processing: The administration team is actively processing cases to prevent backlog accumulation. Initial checks identified 742 out of 24,000 cases in scope for McCloud, with 101,000 members potentially having underpin protection.
• TPR General Code of Practice: A compliance checker spreadsheet from Aon indicated that NYPF is in a good position regarding compliance. Further details will be reported in the June Committee meeting.
• Incident Management and Business Continuity: The resilience and emergencies team is integrating the Pensions team Business Impact Analysis and Instant Management Plan into a masterplan. IT system backups will be included in the business continuity plan.

The committee noted an increase in retirements due to the end of the tax year and discussed a complaint against Prudential’s mismanagement of AVC funds. The Head of Pensions Administration has raised a formal complaint on behalf of the individual affected.

Budget and Cashflow

The Treasurer's report provided information on the 2023/24 budget, the three-year cashflow projection, and the status of the 2021/22 and 2022/23 audits. Key points included:

• The Fund is moving into negative cashflow, with pension benefit payments increasing by around 17% over the last two years.
• There is uncertainty about the completion of the 2022/23 accounts audit before the backstop date and the draft 2023/24 accounts by the end of May 2024.

A meeting with employers on pension contribution requirements will proceed as part of the 2025 valuation.

Investment Arrangements with Border to Coast

The committee discussed a report on the legal requirement to pool pension fund assets through Border to Coast. Key updates included:

• New guidance on pooling pension fund assets is expected to be delayed due to the July 2024 general election.
• The Joint Committee will review performance changes, with draft reports to be presented at the 20 June 2024 Border to Coast Joint Committee meeting and the 13 September 2024 Pension Fund Committee meeting.
• Limited support from partner funds on listed impact equities was noted, but discussions will continue.

The committee also reviewed a letter from Simon Hoare MP regarding efficiencies in local government and the management of LGPS funds. It was agreed that a response to the letter should wait until after the July 2024 general election.

Quarterly Funding and Investments Report

Louis-Paul Hill from Aon presented a high-level summary of NYPF’s investments and funding. Key points included:

• The Fund is in surplus, primarily due to equity asset returns and contributions.
• Despite some minimal reductions, the expected return and discount rate have increased.
• High inflation over the last few years has significantly impacted the reduction in surplus.

Graphs showing asset and liability attribution between March 2022 and March 2024 were discussed, highlighting expected growth, contributions, accruals, and asset performance.

Pension Board Draft Minutes

The committee reviewed the draft minutes of the Pension Board meeting held on 18 April 2024. Key highlights included:

• Public statements from Fossil Free North Yorkshire and NYPF showed common ground but also differences in near-term goals.
• The Treasurer of NYPF provided a positive assessment of the Committee.
• Internal audit reports may be brought to the Pension Fund Committee if required.

The meeting concluded without any additional urgent business.