The Pension Fund Committee of East Riding of Yorkshire Council met on 28 June 2024 to discuss various administrative, financial, and investment matters. 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 Treasurer presented a report on the administration of the pension fund, highlighting several key issues and initiatives. The committee discussed the ongoing processing of cases related to the McCloud judgement, which affects public sector pension schemes. The administration team is actively working to ensure new cases do not add to the existing backlog. Initial checks identified 742 out of 24,000 cases in scope for McCloud, with 101,000 members potentially having underpin protection ranging from £0.01 to £2,500 per year. Some data discrepancies are being addressed.

The committee also reviewed the outcomes of a half-day workshop on the TPR General Code of Practice, noting that the North Yorkshire Pension Fund (NYPF) is in a good position regarding compliance. Additionally, the resilience and emergencies team is incorporating the completed Pensions team Business Impact Analysis and Instant Management Plan into a masterplan, with IT system backups included in the business continuity plan.

Budget and Cashflow

The Treasurer provided a report on the 2023/24 budget and the three-year cashflow projection for the fund. The fund is moving into negative cashflow, with pension benefit payments increasing by around 17% over the last two years, compared to the Bank of England’s long-term inflation target of 2%. The committee expressed concerns about the timely completion of the 2022/23 accounts audit and the draft 2023/24 accounts.

Investment Arrangements with Border to Coast

A report was presented on the legal requirement to pool pension fund assets and the role of Border to Coast in this process. The committee discussed the expected delay in new guidance due to the upcoming general election in July 2024. The Joint Committee's performance review process was also outlined, 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.

A letter from Simon Hoare MP regarding efficiencies in local government and the management of Local Government Pension Scheme (LGPS) funds was circulated. The committee agreed to delay responding to the letter until after the general election. There was support for Border to Coast's progressive approach compared to other pooling arrangements.

Quarterly Funding and Investments Report

Louis-Paul Hill from Aon presented a high-level summary of NYPF’s investments and funding. The fund is in surplus, mainly due to equity asset returns and contributions. The committee discussed the impact of high inflation on the fund's surplus and the importance of a balanced portfolio to limit volatility. The report included detailed graphs showing asset and liability attribution between March 2022 and March 2024.

Pension Board Draft Minutes

The Chair of the Pension Board highlighted key points from the draft minutes of the 18 April 2024 meeting. Public statements from Fossil Free North Yorkshire were noted, with some common ground but ongoing differences with the NYPF. The Treasurer reinforced a positive assessment of the committee, and it was noted that internal audit reports might be brought to the Pension Fund Committee if required.

For more details, you can refer to the printed minutes of the meeting.