Transcript

Thank you, good morning. Welcome to this meeting of the Surrey Pension Fund Committee in the Council Chamber, and it's a public meeting and is being live webcast. Housekeeping are some of the usual points. Please only turn on your microphone when you wish to speak, and ensure you are speaking directly to your microphone, because we have remote attendees and that will help. Please ensure all mobiles are switched off or on silent. Perhaps unusually, I will say that there is a fire drill planned, and it's at two o'clock. If the alarm goes off before or after that, please use the exit by the Council Chamber to the car park. I'd like to welcome two new co-opted members representing the boroughs and districts. That's Councillor Nirmal Kang and Councillor Claire Malkinson, who I think are both online, so you're very welcome. And I think it's appropriate that we thank the outgoing members. That's Councillor Robert King and Councillor Steve Williams, and we certainly had a lot of contributions from Councillor Williams, which I'm grateful for. So we've had apologies -- well, apologies that relate to attendance in the Chamber. I've mentioned Councillor Kang and Malkinson attending remotely, and we also have Kelvin Menon attending remotely. And as members will know, if you're not here in person, you don't have voting rights. So I'll go to the first item, or sort of second item, minutes of the previous meeting, 21st of June. Can I ask if those are agreed as a true record of the meeting? Thank you. Declarations of interest. Does any member have a declaration of interest in respect of any item to be considered this meeting? What way? Yes. No. Okay. So we will go on to a substantive item of looking at questions and petitions. So we have five questions, and the responses have been issued. We have one member attending, so -- sorry, is it -- Jack and me. Jack and me. Right. Question three. Question three. So do we have members of the public attending online? Janice is here. Okay. So question number one is Janice Baker. Can I ask if you have a supplementary to the response you've received? Yes. Thank you for your reply. Sorry, my cat is pooping this thing. The reply does tick the boxes, so to speak, but I was wondering if, for the sake of pensioners who are looking at what their pension scheme is up to, if a very simple graphic or explanation can be given when they next are sent letters about their pension. Perhaps just a pie chart, but showing the amount of money that is invested, not only in fossil fuels, but in animal farms or community-built environment. I mean, all of this is very immediate, but I don't think they're going to look through -- because you gave me so many references, but some of them are 80-page documents. And to be honest, people don't think, Oh, here comes my pension. I think I'll read this 80-page document. Do you see what I mean? A very simple expression could be published. I guess we do -- we publish a lot of information for those what I call most interested. We do have summary newsletters, and I'm sure we can look at taking those points on board to improve how we do communicate with our members. I don't know if officers have any specific examples they want to offer, but I would certainly say we do look to improve our reporting as we go year by year in members' newsletters. Any comments from members? Sorry, from officers? No? Okay, we'll take that point on board. It's well made. Thank you. Question number two is from Jennifer Condit. Jennifer, are you online? She sent a proxy, Lindsay. Nick, I'm going to ask Jenny's question. Is Lindsay here? Thank you. Please go ahead. So I'd like to thank you for your response, but she says, Doesn't this bring into focus the desirability of investing in a fund with a lower carbon intensity benchmark? Is the Committee aware of the LNG Low Carbon Transition Global Equity Index Fund and the LNG Low Carbon Transition Developed Markets Equity Index Fund, each of which use the selective LNG Low Carbon Transition Family Index, because this index may be a lower carbon than that used for the Future World Fund? We did, I think, three years ago when we decided to go into this fund, the Future World Fund for LNG, we did look at a range of possibilities, and we were advised accordingly in that regard, and we did select the Low Carbon Fund. We are aware of the others, and I'm sure we will be looking at alternative strategies as we do our annual review. So that is my immediate response. Councillor Carter, George. Thank you. Just to note that I think some of the funds just mentioned by the question might not have existed at the time we made that decision, because I think at the time I recall we looked at, I think, two or three options on the table with regards to LGIM. I think they may have broadened their offer since then. So, yeah, but as you say, we're going to be looking at again in review anyway. I think the main one alternative was a more Paris-aligned fund, and at the time we decided we would move to the Future World, but there are other options, as you say. I also think it's worth noting that one of the considerations we had at the time was also about the importance of our responsible investment policy as a whole, and particularly around the Sustainable Development Goals are thinking that at the time the Paris-aligned fund was purely climate tilted and didn't necessarily have quite the same SDG tilt that the one we've gone into has. But again, I think their offers have changed somewhat since then. That's a well-made point. Thank you, George. Let's just then go on to question three from Jackie Macy. Thank you. You have the response? Yes, thank you. You have a supplementary. Thank you. Well, thank you for your response. I do understand my question related to the pension scheme bill, which the government is planning, and I do understand that the outcomes of that are not really clear. And it was really just a comment, which was just our hope is that changes will not slow the progress the fund has made towards divestment from fossil fuels and the acquisition of funds in sustainable markets. But thank you for your reply, and we wait and see. And in fact, I think, Neil, you were listening to the minister yesterday and might have a few things to say when we get to that part of the agenda. But, you know, we never receive the detail till we get the detail, as you know. So thank you very much. Thank you. Let's move on to question from Luciana Cole. Question four. And I have a follow-up question from her. You have the baton on that one as well. Thank you. And Luciana says, thank you for your rundown on deforestation engagement. It's welcoming to hear that ocean biodiversity has been launched as the next theme. Do you have the names of any of the companies that RABECO are engaging with on this issue? I don't, I don't think we have that information, but we'll give you a written answer on that particular one. Thank you very much. We've got our hands up. Sorry, yeah, I was just going to contribute there, Nick, it's Milo Kerr at Border2Coast. I suspect once the engagement theme is finalized, then the target companies would be identified and we can follow up with a written response. Thank you. Thank you. So let's move on to the final question then. Question five. Is there a supplementary to this question? Yeah, thank you. Thank you, Nick. I didn't ask a question on engagement, so I was a little disappointed that my response was about that. But I want I have got a follow up and it's basically about Paris Agreement and Paris alignment. So the Paris Agreement, which is a much lauded blueprint, contains the world's framework for tackling climate change. And there is an expectation that countries, institutions and others like banks, oil and gas producers will align with its climate objectives in two ways. In practical terms, one is by increasing its funding for green solutions and the second by winding down funding for polluting businesses, which must eventually disappear. Can this committee demonstrate what its portfolio meets these expectations every year and that the fossil fuel producers currently part of the portfolio have credible transition plans to make that a reality? Thank you. I don't think that's something I can offer an answer to at this meeting. So we will give you a written response on that. Thank you very much. Thank you very much. Thank you. George. So I would just make the point that I think one last point about the about credible transition plans from those who invested in. I think we know we have we know full well for instance that BP, for instance, far from having a credible transition plan, have actively backtracked from their previous transition plans, which is why our engagement approach involves voting against it for most recent meeting. But I think that is just going to be a more detailed answer. But I think on the fundamental question of no, we are not invested in fossil fuel companies which have credible transition plans across the board because we've got at least one clear cut example of where we are continuing to invest despite there being no credible transition plan in place. Thank you. So I'm going to move on to item five, the glossary action tracker and forward work program. Neil, you're going to introduce this please. It's on page 17. Yes, you'll see committee that the number of items that have moved from ongoing to complete status. I'm essentially asking the committee just to approve page 38 of your pack and 37. George. Just on action three 24, which is about the providing monthly snapshots of data to committee and board members. I do know it is expected to be complete by the next meeting anyway. However, I'm a bit surprised that sort of the answer sort of that won't be invited until all the suggested dashboard amendments have been made, because at the focal point, even if you don't have the ideal dashboard available at the moment, it should still be possible to pull out at least some data to provide monthly. So I'm not entirely sure why this is raised, I think, in June, so we're now in September, so I'm not entirely sure why it should really be taken to our next meeting, which won't be until what, December, January, in order for that monthly update to be provided. You know, even if it's an incomplete update, some data is better than no data at all. So just sort of try to understand that a bit, please. Yeah, I mean, the issue with the dashboard is the date data has some timing issues, and there's also been some problems with getting members access to that. But I'm very happy in my regular update to provide those monthly snapshots of a static period in time, obviously, but I'm very happy to do that on a monthly basis. I know Nicole was on the line, we can action that. Nicole, please. That would be great, please. Thank you. Thank you. Perhaps I can just take us on to Annex 3, the forward work program. This is in a different format that we think might be simpler to understand differentiating meeting by meeting with the standing items as well. So, are there any questions on that element? No. So, we're being asked to note the content reports and make any recommendation, local pension board. I don't think we have any as such, and we have monitored the progress on implementation recommendations Annex 2 and reviewed and noted the forward program in Annex 3. Is that agreed? Thank you. So, Item 6 is improving the governance of the Surrey Pension Fund. That's on page 43. This was originally a document that we referenced was going to come forward. It includes recommendations that are going to go to the full council. We had thought that we would have to have a special meeting on this. In the end, we brought it to this meeting, and so we didn't need that. So, I'll pass it to Neil to introduce this paper. Thank you.

Yeah, thank you. And the reason why-- first of all, I should-- to Nick, to the Chair's point, the reason why we would-- we thought we might need an additional meeting was purely a governance timing one, but actually as the stars have aligned for once to enable us to get-- potentially get through the different governance channels that we need to. The crux of this paper is really to reflect more fully the relationship between Surrey County Council as a scheme employer in the fund and as the administrative authority and to more effectively manage some of the potential conflicts of interest that this presents. I suppose most obviously in the section 151's role, the recommendations themselves are not particularly radical, I don't think, and more symbolic from my perspective. There are-- there's a minor change to the terms of reference of the pension fund committee which will provide a requirement to annually bring a conflict of interest policy to the committee to approve which formally understands that relationship between the council as a fund employer and as the administrative authority. And there are also some-- I describe them as tidying up of delegations whereby decisions around about the pension fund committee are made by officers who are in the employ of the pension funds team and also there is a further recognition of a role that was identified as being desirable in the scheme advisory boards for governance review which is the senior pensions officer. This enables a more focused pension fund management and also supports the section 151 officer in their role. So the recommendation here is to make those changes or to support recommending those changes to full council in its meeting of the 8th of October. The second recommendation is as part of the more-- the recognition of the different priorities at time of pension fund and Surrey County Council to undertake a full review of the services and products that the Surrey County Council provides to the pension fund to understand-- benchmark them and to understand their appropriateness and again make sure that the pension fund is getting value and quality in the areas that we require it. So that would move across areas, systems, services, accommodation, those types of areas. So that is something that the pension fund would intend to and explore given that the symbolic nature of the relationship is more firmly ingrained within the constitution. We have sought advice from an independent expert in the field. Many of you may remember Jeff Houston who used to be head of pensions for the local government association. He's now a-- now works for Barnet-Waddingham. We also are meeting recommendations from internal audit in their last governance audit of the pension fund. We also believe it's consistent with guidance from the pensions regulator and is certainly consistent with recommendations from the scheme advisory board in their governance review and actually it echoes some of the areas that the government are focusing on in their pension review regarding the improvement of governance. Officers are of the belief that this puts the Surrey pension fund's governance in a much better place and also will enable us to be well-positioned for whatever direction the government takes the LGPS. Thank you. If I can just add a few words before inviting member comments. I think when you come down to it, it's in terms of the-- what we're taking to the county council is quite modest in many ways, but it's an important change and kind of reflects how the private sector pensions works with the distinction between trustees and the sponsoring company. So while the analogy isn't exact, I think it's an important element to bring to your attention. And the second recommendation deals with the services that are received by the pension fund from-- mainly from the county council and what we're looking at is really at this stage what is termed a discovery process to understand the nature of all those charges and make sure they're appropriate and introduce service level agreements. And this might be-- I will just make an aside. I think if we had been aware of the changes in Unit 4 in my Surrey, we might have been in a slightly better position than we are in now. But we'll comment on-- we'll speak about that later on. So paragraph 35 on the electronic page 56 sort of sets up the next steps in those-- along those lines. So I'll open this to comments. So, Neil? Yeah. I should-- thank you, Chair. So I should also have added, we have gone through a rigorous consultation before bringing this paper to the committee. So the chief executive, section 151 officer, the monitoring officer, the lead member for finance whose portfolio this is-- pension fund continues to be in, and also the corporate leadership team. They have all been happy to stand behind it. So any questions, comments? George? In main, I quite welcome this. I think it's common sense approach to sort of to recognize the fact that, yeah, we clearly do have a conflict of interest and there's nothing wrong with that as long as we manage it appropriately. So I think having an annual report coming to how we're managing it is going to be very beneficial. In the annexes, I note that one of the options that was brought up under legislation-- well, two different points actually about the dependencies. The first point is I think they're talking-- there's discussion in there about potential impacts of potential future legislation such as the-- one of the bills that failed due to general election but hasn't definitively been ruled out being brought back which is about the-- I forget the name of something, local authorities overseas investments impact or something like that, whatever it's called, yeah. And I think it identifies in there that one of the potential options around potential response to that if it were to come forward is amendments to schemes of delegation to delegate more investment decisions to officers and particularly around the implementation so as to avoid the potential for it to become controversial. Can I just ask whether we have-- whether any of the changes made thus far under this item are in response to that or is that simply talking about things we might need to consider doing in the future? No, there's-- yeah, there's no change in any delegations to officers as part of this paper. Yeah, it may get horizon scanning, yeah. But we certainly haven't made them now. Thank you. And the other one I had was I noted that one thing which was out to me was the suggestion that one option might-- that we could-- that could potentially be explored particularly given the government's desire for power and consolidation and things like that and scrutiny of government's arrangements was the suggestion of a-- I forget the exact terminology, but a single purpose combined authority. I just wondered 'cause I know there seems to be a fairly strong argument made here sort of what the benefits of that would be particularly in terms of completely resolving the conflict of interest side of things. I can't seem to find it mentioned one way or the other in the overall covering reports. I'm just wondering sort of where the thinking has got to on that because on the face of it that seems to me like it might be the most sensible long-term way forwards. Okay. Can I-- let me respond to that. The paper from Geoff Huston is of-- is all encompassing of the-- all the options that there might be and as you say, looking at what might be coming. I think we're clear that, you know, we don't want to make changes that are irrevocable and take us down the line which subsequent guidance from government don't allow us to do or accelerate. So, I mean this is a-- I will call it an important but it is only a baby step towards that. And I think we need to understand what the government's actions might be before we really explore more options. I don't think we should just start off on this on its own. George. Yes. Well, I mean more on that, you know, I did take the point but I think there's some tautological reasoning there in the sense that if we were to do anything that the government decided in later guidance, decided it was no longer going to be permissible, then we wouldn't be allowed to continue doing it anyway. So, and so I'm not sure necessarily that the, you know, similarly if they're going to find competitive interest changed next week, we'd have to come back and revisit this anyway. So, I think there's an element of we should be making the right decisions for governance based on the situation as it is. I think it's also important that on that point in particular, all the indications from the government are that combined authorities and equivalent bodies are their preferred route when it comes to local government in England in terms of simplifying structures and making life easier for Whitehall. So, also I'm not suggesting that we should just sort of frequently say, yes, let's plow ahead with it, but at the same time I'm just curious to understand is this something we are going to be looking at further in future work in the near future or is this just a suggestion which we're just sort of kicking into the long grass and ignoring because it's not clear to me which of the two we're doing. Can I, let me respond. This is horizon scanning and I think if there's a move to combined authorities we would, we would, this would be one element of it, but I don't think we would want to take a step without knowing what the government might well do in the near future in relation to pooling and other matters. With respect, with respect Nick, that's not what it's saying because the point is, the wording here talks specifically about a single purpose combined authority and it notes that as being a particular solution to the conflict of interest problem completely. I can also see some democratic accountability in government's benefits from making all the responsible bodies within the pension fund co-owners of the pension fund rather than simply having one managing authority which has inherent conflict of interest. That doesn't necessarily mean it's the most appropriate thing to do. There could well be downsides to doing it, so I'm not suggesting it is a magic bullet far from it, but we've been asked to look specifically at the issue of governance and conflicts of interest. We have a proposal here under existing legislation for completely resolving that conflict of interest, not managing it but getting, doing away with it all together. So to me it seems very odd that we're just sort of saying we're not going to look at it which is basically what your answer is suggesting and I still don't want clear answers to what we're saying is we're not even going to look at it or whether we're saying we're going to look at it but not yet or if we're going to look at it and starting soon. Yeah, I think it's a very valid observation and I suppose it would probably help if I gave some context to the brief for the work that Jeff Houston carried out for us. So yes, we asked him to look at what options were currently available within existing legislation but you're quite right. This is with one eye on what might be coming from the government. Now yes, the combined authority is a potential solution and it could be an appropriate solution should there be an opportunity for democratic accountability of multiple number of funds to be contained within. So I think that's the context in which we've looked at it. Certainly we haven't discounted anything at the moment but what we, to use Nick's words, this is our first step on establishing better governance within the existing framework and the constitution but certainly subject to the call for evidence and the response to the pensions bill and our discussions within the LGPS ecosystem. We thought it was helpful to give committee a visibility of, you know, it's one idea and there's another option given which is low the pension fund which is a completely separate FCA regulated entity. So just to give the committee some view that we are thinking about these things and although the thought isn't more developed than just horizon scanning and being on the front from our-- from the point of view of where our existing governance stands. This will put us on the front for-- apart from anywhere in the country apart from South Yorkshire which is a combined authority. So to clarify what that answer effectively means is that this is sort of an FYI of what options exist at the moment. But in practical terms, they're all in the long grass until-- unless and until we get a clear direction of government in terms of pooling basically. Then we'll look again at what options would be most appropriate at that point. I think that's fair and also it's probably worth mentioning that it isn't a nationwide solution because legislation in the London boroughs doesn't allow for the formation of combined authority so it's not all inclusive so there may need to be primary legislation to tackle this if that is indeed the way that the government wants to take this. David and then Vice-Chairman. Thank you, Chairman. Yes. I suppose I should declare an interest as a receipt-- in receipt of a pension from the County Council actually as an employer at the time. But also more I'm concerned for the significant number of organizations within my patch and I know it's 300 odd around the county who are also using our pension fund as the basis of their own pension arrangements. And I think it would be sensible to wait until we know what the government's position is at the very least before we put it on the agenda for the County Council meeting which is not until the 6th of October I think. Is that right? Yeah, about then. Sometime about, I suppose we've got October. And I don't see any reason why we would wish to accelerate matters before then. I mean, my answer to that, Councillor, would be that frankly this is making-- this is best practice for current arrangements and there are no radical changes to anything contained in this report. This is just managing existing conflicts of interest better. If the environment changes, it isn't gonna be something that happens overnight anyway. My strong belief is that we can improve-- we should improve government's best practice immediately before waiting to see where the government might take that. I guess I'm just concerned that the 300-odd organizations, some of them might be nervous about what we're doing if we find ourselves changing things twice. That's really what's bothering me. So in direct response to that, I think they should be anything but nervous because what this proposes is to ensure that the pension fund is treating them equally to Surrey County Council. That's the conflict that seeks to manage more effectively. Yeah, I understand that. But I would have thought there were simpler ways of doing that, you know, to be quite honest. And I was surprised that, you know, that we didn't use a more straightforward thing that was inconsistent with how we deal with the other authorities now. Okay, but that's-- you would know better than me, then. Thank you, Chairman. I'm gonna bring us back to the here and now situation a little bit because I'd rather talk about known knowns rather than known unknowns. And I just wanna welcome the, you know, statement in paragraph 24 with a commitment to benchmark costs and have clear service level agreements in place so that we can actually demonstrate that the conflict of interest is being managed actively to make sure that Surrey pension fund actually get-- and Surrey pension fund's employers who are paying for the service and the members who are paying for the service actually get, you know, the right deal and not just, you know, whatever. Sorry to say, I'd like to welcome that. Thank you. I don't see other contributions or hands up, so thank you for that. The recommendations are on page 49 of the electronic pack. So the pension fund's recommended to support the proposed changes to this council's pension fund committee terms of reference and scheme of delegations recommends approval of these changes to the SCC at the full council meeting of the 8th of October. And notes that offices are exploring options for the future of the pension fund as outlined in this report. Any proposed options to be taken forward will be subject to further consideration by the pension fund committee, the council's governance, legal and financial due diligence. So is that agreed? Agreed. Thank you. So move on to item seven, summary of the local pensions board. We have Tim Evans, I hope, online. And-- Yeah, I'm here. Thank you. Neil and Tom Lewis is going to cover this as well. So I'll ask Tim or Neil to introduce this report. Shall I go first, chairman? Please do. If I go first, then I can leave Neil to deal with all the difficult bits. Sounds like a good idea. So the report that you have in front of you, chair and committee, is the usual update on the various activities of the pensions team as it was at the 20th of July which was our last board meeting. And in particular, the products of the change management team, notably the digital transformation strategy I mentioned, as well as the overview of the service delivery. That's all detailed in a series of annexes. There's a lot of detail in those, but there have been some actual variances in performance, but I don't think anything that need concern us particularly. But mainly, and you've already discussed this, we were and are focused on My Surrey Unit 4. The issues with this system have had many consequences for the county council, as many of you will be aware in other areas. The impact on the administration of the scheme, particularly as it relates to Surrey's own scheme members, has been considerable. And extensive efforts are in place to resolve the outstanding issues. Annex 2 in the report, appended to this report, sets out the operational issues for the scheme. Chairman, you and I have attended progress meetings on a monthly basis, the latest of which took place on Wednesday to try and sort this out. Prodigious efforts have been made by Tom Lewis and his team working with Surrey's IT to resolve the outstanding matters. We're very close to sorting out the lever notifications of the monthly returns via iConnect. Tom or Neil may wish to comment on this further. The configuration issues remains, specifically in connection with Surrey's staff members who changed their job within the council. That seems to be a major problem. A drop dead target date of March is scheduled to resolve that. I'm sure the officers will wish to comment further as I give an overview. The remainder of this report contains updates on a number of regular items, but I would like to highlight paragraphs 23A and 24 regarding the latest letter from the Minister re-pooling, which we are able to deal with that. Finally, I just add that the Viceroy issues have highlighted the questions of governance for the scheme, as you've all just discussed in some detail. I think they're very important, and I'm looking forward to that particular item coming to the Local Pensions Board in November when it's our turn. As ever, happy to answer any questions, Chair, but otherwise I'm sure Neil and Tom will have more to add to what I've said. Thank you. Thank you. I'll ask Neil and Tom to take some next steps and then open it to questions. Taking the Chair of the Local Pensions Board lead, I'm going to ask Tom to answer the difficult questions regarding Unit 4. Yes, thank you, Neil. Thank you, Tim. So I just wanted to give a bit of a situation sort of update really where we are. So the Southern County Council needs, specifically their IT department services, has set up a new program board which has executive governance sitting above that as well for the sort of decision making in that area. I'm really pleased that we've been included on that program board, so myself is part of that, so that we're at the decision making and the forefront of what those developments are doing and making sure they're fit for purpose. And so that's been a really welcome addition to the setup. It's also been-- we've been really pleased to see that there's been a ring-fence budget put in place to deal with these critical improvements that are required. And as mentioned, March 31st is the deadline which they are working to to work through these series of works. There are three work streams in place and pensions is-- pensions work is specifically down as top priority in work stream one. So we've had-- as Tim mentioned, there's been some significant movement in the last few weeks around getting the data through as we expect. We're nearing to the point where we'll be able to run these reports in live and actually then start to understand the position of what the pending cases look like. Now, it doesn't sound great because we are sitting on approximately 2,000 cases that we've been unable to process due to the Unit 4 impact and the lack of data flowing across. But we have made some adjustments so we have agreed for a defined period of time that we will take on some of those employer functions on behalf of Surrey County Council. It is an interim period so it is only going to be for anywhere between 12 and 18 months. And that will include some of the running of these reports and uploading that information in but we will ensure we maintain a decision making process so that the sign off still comes from the county. So we have engaged internal order on there to make sure that we've got those touch points correct. So we've successfully brought in two people there. They're supporting the projects that are in flight and they're also now in the midst of doing their training in terms of understanding all those areas. So that decision was taken that, as I keep saying, is for an interim period of time but it was recognized that the expertise and the resource levels that we held and that we could provide would reduce the risk to our members significantly during this period of transition for Surrey County Council and the difficulties it's been facing Unit 4. I think just to touch on the configuration side of it, that's sort of become the biggest issue is that it was recognized it wasn't configuring contribution deductions correctly. Some of them are minor, some of them are more significant. There is a piece of work that the county still need to do around data rectification which we will support on. But this is due to go live from October but unfortunately it has been delayed several times since April. So they are finding difficulties doing that and it does often come back down to the fact that the data that was migrated was not sufficient and then obviously as they're working through these different scenarios they don't-- they stumble across these not knowing that some of these data issues were gonna cause the problem. So again we're heavily involved members of offices within my team attached to the subgroups to make sure that we are pointing this in the right direction. A specific impact from a pension's point of view is not-- and if I mentioned about the cases pending, one of the things that we were keen to make sure was how will this impact our members around delivery of the annual benefit statements. So overall we've been able to produce 90-- for our active membership, we've been able to produce and deliver 94 percent of statements across the board. When you look at that specifically for Surrey County Council members, that's 88 percent. So there's a bigger gap there and that comes back down to the data issues that they're finding. If you were to take Surrey out of the equation and look at the other members specifically, you're sitting somewhere in the region of about 97 percent which is roughly what we would be at almost every year for the last four or five years. So we know where the bottlenecks are but we need to continue to work to support. I think it's also really important to recognize the conversations with the regulator. So towards the end of last year, we carried out an impact assessment on the situation that we were facing with the county and as an employer and using the matrix that the regulator has, we went-- we walked through those steps and it allows you to assess whether it's at a red, amber or green status. So based on our assessment, it was sitting amber because there is continued efforts to try and fix these issues. We did have a dependency if it was to affect enough members that was outside of the tolerance which is normally at five percent. This is when we would have to engage with the regulator to update them. Subsequently, in that time, they actually contacted us directly in July because they've been made aware that someone had raised the situation with them as-- and we had answered those questions that they initially raised to make sure that there was a true understanding of the situation and where some of the issues lie which they then actually subsequently contacted the county council when they've been liaising with officers there as well. So to ensure we're transparent and we continue that conversation given that it started, we are going to be responding to them imminently with an update on the situation certainly around the annual benefit statements 'cause it's triggered that level that we felt was right. But also we know Surrey as a county are also in contact with them. So they are hearing it from both sides and understanding it on both and they're being done independently. So our report is ours and the county's is theirs to make sure that we keep those roles and responsibilities defined. So that's probably the sort of update I was going to provide but I'm more than happy to take any questions. If I can just add one thing. I think the initial contact to the county council and their probing has been in relation to getting new members on board and enrollments issues in relation to that. Is that right? It came out of the enrollment office but it was generally around the monthly returns so they were aware that that wasn't flowing which obviously has an impact on that. And I-- when they asked that one question, obviously that opens up a series of others. George. Thank you. I suppose it's sort of very much sort of a mixed bag. Feels like sort of progress but we're still sort of not out of words by any means and still-- well sound to me, we've been blunt and just thinking from technical perspective, some quite significant and challenging issues to resolve particularly with data quality because short of manually checking every single record, there's no quick fix for fixing data and then to clear it all out and start all over again which I imagine is not something we desire us to be doing. I note that in the-- in one of the annex papers, there's an item about the risk register score and the financial system update of risk register score. In most of the risk register impact risk score remains unchanged. Can you just-- first of all, just question is what actually is the current impact risk score? Okay, so the risk-- we didn't-- that will interest me. That score did change but only for a short period of time and a certain deadline was missed but which was then recovered within about a week of that being so it did come back down. I think we've deemed that that's still sufficient at the level it's at because we are still being able to maintain services to those that are retiring or who are in need of an immediate benefit as it stands. A lot of the impact is those who are probably in the deferred state so it's probably allowed that risk to be as it is but you're right, I mean it is constantly under review. [ Inaudible Remark ] If I remember from the paper and I think it was set at 16 out of possible 20, was it not? I mean the report in these papers says it's 16 and that's why it's unchanged. It's in the top right-hand matrix. So that's the report that was reviewed by-- that's the most recent report we have in these papers. Okay, thank you. And it is by far the most important risk that we're looking at at the current time. That's very helpful and thank you for clarifying that Mr. Chair. I guess my question isn't really a question on the paper but it's more in terms of for us as a committee, I mean obviously this problem has been going on for quite some time. I don't doubt that it's quite clear that significant efforts are being made to resolve it but this is now dragged on for a very long time and there's not any indication that there's any end in the site. And obviously I'm aware of the impacts of this across the entire council but obviously there's a particular impact for us as a pension fund specifically. I was wondering whether it might be appropriate to potentially refer to-- and this is a way of looking at it for guidance, is if there's some way to express or to refer to cabinet or council sort of concern about the ongoing impact 'cause ultimately from our perspective as a pension fund this is a service provided to us by the county council and the service that is being provided is one that-- the quality of service being provided is one that is negatively impacting our members and has been for quite some time. And I think, you know, I think my-- it would be remiss of us not to formally raise it in that sense I'm sure that it's been raised on an officer level before and I'm sure it's been raised on an individual level and I doubt if there's a lack of awareness about it but I feel given it's gone on for so long it would be appropriate for us to formally raise it as a committee in my view. Can I comment? I mean we have-- Chairman of the Pensions Board and I have raised it formally. It's a little while ago since we did raise that and had discussions with the 151 officer at the time. I think I would endorse that particular step indeed and could I just ask Robert as chair of the Resource and Performance, I'm sure this is getting a lot of attraction and attention on your side. Yes, it's coming back-- thank you Chairman. It's coming back to the Resource and Performance Committee in the next few months because obviously we produced our task and finish group which was welcomed by the cabinet and I think is really a guidance as to what should happen with any future or all future acquisitions of databases, et cetera and there's a lot to learn I think from both my sorry and from other previous acquisitions. But what we want to do is to look at how far it's been and I'm very used to what Tom has been saying today and obviously I will make sure that that's taken into account when we get to that discussion in my committee. Just for the benefit, just some context as well. Yeah, the issue was formally escalated by a letter from the chairs of the committee and the board to section 151 officer. As a result of that, there have been a number of workshops which included the lead cabinet member and I would say that there has been-- Tom will probably bet me out on this, there has been a greater focus and more importantly greater resource from the council dedicated to this and also we have-- I say we, Tom has been included in the program team as an advisor as a result of this as well. So from the point of view of the trajectory, yes it has been going on too long and-- but if I was judging where it is at this particular moment, there are-- there have been good movements in the right direction, haven't they? But I would say this and picking up on George's point, I was disappointed to hear that this would go on till next March and no doubt, you know, our issues were at the forefront and the bigger issues will be tackled but it is very disappointing that it's a March deadline. George? Yeah, I think sort of where I'm coming from is I'll draw a comparison from my day job where we have a major software project being provided predominantly by contractors who I won't name which was really meant to launch in September last year. That was then delayed to October due to problems and it's delayed to November. Then they repro-- then they realized they still won't be able to do it so there was a lot of discussions about how important this was and we all agreed, okay fine, I'm going to postpone it until September this year, so the month we're currently in. And that sort of-- and there was that sort of sense of about where we are now, that sense of positivity of like well, it's not fixed yet, it is disappointing but there's, you know, there's a real willingness to put resources into this, to understand it, there's real engagement, you know, we've got a new-- we should be able to make it. And obviously here we are in September and it's still looking unlikely that that deadline will be met. So I think if we've got a March deadline, whilst I appreciate that things might be going well at the moment, I still think it is worth us formally collectively as a committee on record expressing a concern about the continued impact of this and of the delayed deadline because what I would hate to be in is a situation of March next year, we still sat around this table and we're sort of saying, yeah, it's now going to be August or something like that. And I don't have high hopes that a formal comment from this committee is necessarily going to magically fix that but if we get to that position, I'd much rather be in a position where we have said something now rather than continue to keep our fingers crossed 'cause we've already been doing that for at least 6 months. Thank you. Duncan. Lovely. Thanks, Chair. Just really to reference a point made by the Vice-Chairman, I hope once we get a decent service level agreement in place, then presumably we'll be, you know, we'll get some sort of recompense or something like that. So I think that's a move in the right place. Things like data quality, I'm actually going to slightly disagree here. Data quality should have been sorted out before the information was transferred over. I mean that's just an error. There's no more-- no way to put it. It just seems, you know, the program board should have been on top of that one a long time ago. Thanks ever so much for your comments which I appreciate. Let's hope it's sorted out ASAP 'cause it just doesn't seem to have worked at all. And, you know, we have-- our pensioners have suffered as a result. There has been impact for us. Thanks. David. Yes, Chairman. I was a member of the task group to which Mr. Hughes referred just now. The underlying problem is that our provider of the software announced with very little warning that they were ceasing to provide the software. And so the-- it was always the county council's intent to transfer to a different supplier but that caught everybody completely off guard and that made some difficulties. That's the reason why subsequently Mr. Hughes set up the task group in order to see what should have been done in a different way, hopefully better. And the fundamental part of that that we recommended to-- for future occasions when such things might happen is fundamental of the data processing management principles which I was heavily involved in in my business career and also my educational career. I lectured on the subject for some time. And that is that they did not at a detailed level work out where you were trying to get to what it was supposed to look like by the time that you had completed the work. And the result of that is that there were holes in the system which is what is causing Tom all his problems. Hopefully, the recommendations from the P&R committee will-- is that the right word, the R&P committee-- R&P committee, sorry, yes, from the R&P committee will have caused things to happen within the departments. And we have every reason to believe that that's the case, I think. And so, I think you would be right to complain but I doubt whether it would speed anything up significantly. That would be my view. Now, I couldn't predict the date because I don't know the end of it. But I guess that, you know, Tom will be preferring that it was all done properly rather than it was done too rapidly. [ Inaudible Remark ] I would endorse that. I don't-- we will write, Chair of the Board and myself, I think we will follow up from our previous written correspondence referencing what we've heard and desire for, you know, for adequate resources to meet this March deadline. I don't think there's anything we can do more as a pension fund except work through and modify and remedy what we're faced with. But we do need the support of the-- we need the council to fix it, of course. George. Two comments, I think. I don't wish to reallocate all of this and I'm sure that the R&P committee looked at this in far more detail than I have. But just speaking as a software professional, this is-- to attribute this as a fundamental problem of a supplier retiring their product at very short notice is really letting the council off the hook because any competent risk management exercise includes considering what happens if our software provider stops providing it, you know, and to having contingency plans, particularly if you've got software which you're already anticipating replacing at some point in the future, good practice would be to have contingency plans in place and to be in a position where if nothing else, you can accurately port the data out to the existing system should you need to ever move away from it. Now, I appreciate that's a lesson which many organizations have to learn the hard way and it seems like even happening over and over again in all sorts of different organizations. But nevertheless, it is ultimately a failing by the supplier to the pension fund which is the council and I think writing that letter will be very helpful. I think the second one is to pick up on what Mr. Easto said. I think there's nothing we can do which will make it go quicker but ultimately, we have a supplier who has been providing us without the service that we've been-- who has not provided the service that we are paying for and that our members in particular are paying for and I don't know whether one option might be to seek some sort of recompense because particularly in terms of compensating members directly who've been inconvenienced at the expense of the council given that they're ultimately the ones who have caused the inconvenience to our members. I mean, I think we should attract-- we should look at this from the point of view of this committee and this pension fund. Clearly, the original decision to move away from and the difficulties with our previous system is not something I think we should particularly involve and it was the council's main computer system. We are a recipient of it in our pensions processing but so I would like to leave that there and focus any letter on that particular arrangement. But my second point was about though the fact that we have a supplier who's not provided what the pension fund has been paying for, which has had a cost to our members and nothing else in terms of time, inconvenience and stress and I think there is a financial point there which should be-- which should be addressed. We don't have a service level agreement and the degree to-- I would recommend we don't go down those lines. We don't-- you know, the impact on our members is-- varies from member to member and it's late delivery service and it's-- you know, there are remedies if there's-- if members want to invoke the IDRP mechanism or the-- go to the regulator. I mean those are there. But take the hypothetical though where a member does decide to say, you know, I've been-- I've suffered financial losses as a result of this problem. We would-- we as a pension fund could potentially ultimately be the ones who have to pay out to compensate them for any losses incurred. Meanwhile, our provider, which has caused a problem, is getting off Scott Freand. And I'll take the point that there's not a service level agreement, but in any relationship, which is a commercial relationship between a customer and a provider, where there is always room to discuss the financial consequences and some form of compensation or restitution. You know, I'm not suggesting we go-- you know, because ultimately, we aren't obliged to use the council as our supplier. We've chosen to use them for a good reason. I don't think the problems we face are worth switching away from them as a supplier. But on the other hand, there is still a point-- there is still a point that we are not obliged to use them. And if we had used a different supplier, maybe we wouldn't be in this situation. So even if there's-- you know, even if there's not a service level agreement, I do think there is such a thing as doing the honorable thing. And I don't see any harm in asking if our supplier would be prepared to do the honorable thing, particularly if we have any claims brought against us financially as a result of the impact on our members. [ Pause ] That's a very, very good-- very valid point. And so just to give you some anecdotal evidence, so I'm going into detail here. We have had examples whereby delays to payment of pensions and distress that that has caused individuals have been raised through the RDRP process to the pension fund. In these instances, we have where we feel compensation has been appropriate and we have a warning compensation. And we would then recharge that to the responsible employer. So we would have recharged that to Surrey County Council where we feel that is appropriate. So there is-- there are mechanisms in place in order to recharge that. I mean, I completely agree with your point regarding the sophistication of understanding between the relationship between customer and supplier. And I can only say that that perhaps hasn't been as well understood as it should be and hence the paper earlier. [ Pause ] Tim. Yeah. Thank you, Chair. I've been listening intently to everything that has been said and I'm in very strong agreement with nearly all of it. I think perhaps George is going a little bit too far at the end there, but it doesn't matter. I'm very sympathetic with his comments earlier on with the way in which these IT projects have managed. And of course, I'm an old man too and I am-- but God knows how many times we've seen badly managed IT projects which always run over time. However, I'm in agreement that this is not really any longer our issue. We just need to find a way of sorting it out. I'm happy to join-- obviously, Chair, I'm happy to join in with you in a joint letter to raise this still further and anything that we can do to get further focus on this is being sorted out for the pension fund. I think it's got to be a good thing because George is right. It has gone on for too long. We felt it had gone on too long, you and I, a year ago and it's still going on. And it is not the fault of anybody in the pensions team who worked valiantly to try to sort it all out. Clearly, when the thing was originally designed, it didn't take into account in any significant way the requirements of the pension fund. We are kind of collateral damage in the whole thing. So, yes, I welcome the comments the committee have made. We will pick it up again at the board. I'm sure the people of the board will have some strong comments to make as well. But as soon as we possibly can, happy to join in with any representations of the council. Whether it is a cheese editing by discussing it at a council meeting remains to be seen. I'm not convinced by that, but at least we can at least raise the profile still further. Thank you. I'm going to draw this to a close. The recommendations are on page 133 of the electronic version. We're asked to note the content of the report and make recommendations local pensions board. Don't think we have anything specific to the board, but there's a third recommendation that delegate the chair of the committee and the board to take this further with the appropriate officers at the county council. Is that agreed? Good. Let's move on to item eight, the Surrey pension team overview for quarter one. And this is to be-- at least to start off with, Neil. And no doubt, you'll bring your office and team into it as well. Yeah, thank you, Chair. This is sort of an overview of everything that's going on in the team really. So the detail to the annex is really provided in-- also in paragraphs one to five. The fund has an extremely good funding rate of 143 percent at the point in which it was reported and it has for the first time to say over 6 billion. That's not withstanding. There have been some underperformance in-- against Benchmark which I think probably the-- Lloyd or Mel might be able to give you more information in their actual investment report that follows this. I'm really delighted with the legacy reduction which is Tom's service delivery team. It's in front of where we'd expect it to be which is excellent. We'd always-- this is a ring fence team of fixed term members of staff and we had always envisaged that this would likely be refocused on future areas particularly with McLeod and the pension's dashboard being on the horizon as well as GMP rectification work. There is some fallout from work that has built up due to the issues we've just spoken about. So there is-- there was gonna be work for that team to continue to do. I'm delighted the team have also acted as a sort of a pipeline of talent with a number of them have now got permanent roles within the team and we are looking to any vacant positions we are actively looking to recruit to. Just talking on the audits that we're expecting. We have an upcoming audit on business continuity for the pension fund on our admission process so the processes we follow when we bring new employers into the scheme whether they be admitted bodies or scheduled employers. We also have our regular investment audit. We're looking at how we manage our overseas pensions and then we have follow up work with the internal audit team both on governance and banking. I don't propose to go into any further detail. As I said, this is a snapshot and in response to Councillor Potter's earlier point, we'll provide more regular snapshots of this although I would just say they are a point in time and they can all have changed particularly on the investment forms by the time you've written the email, it's all gone a different direction. Comments or questions from the committee? Perhaps while you're thinking about that, can I raise one myself? On the dashboard report which is page 146 electronically, the performance and grants and survivor benefits has gone down by 10% over the quarter. Is there an explanation that can be provided please? Yes, thank you Nick. So we recognize that we've fallen below the standards we set ourselves and the performance of what was [inaudible] is that the immediate benefit team hasn't been consistent over the last 12 months. We recognize this and it's caused by a combination of the impacts of Unit 4. There has been some resourcing levels with absences in the team or vacancies that are open and in all honesty, there's been some inefficient processes and practices in place. So in order to combat that, we've actually-- we've changed the teams. We've now actually blended what we call our immediate and future benefits teams. So there is a cross of them amongst the two teams. With the sort of aims behind that is to first of all allow us to develop the staff who are-- work to have a broader understanding of the case work and be able to be actively involved in works that are either future or immediate benefits. So this could be anything from process and retirement to a transfer. It will help increase our resilience for when we do have absences and vacancies so we can flex that team. It will also allow us to deal with any spikes of work or support in the closing week of payroll so we can bring as many retirees into payment as we can. So-- and on top of that, we've now maximized the analytic-- the performance and analytics that we've had available. Our deputy head of service has done a great job in terms of really getting under the hood of that and understanding it to the point we can now use it to set targets and objectives for our team and also use it to understand where there's areas for them to improve and develop that they may be struggling with. So the upshot of that is-- and I'm not one to sing too early in case you-- 'cause obviously, but the upshot is that the August KPIs are significantly higher to the point where I think only one or two have fallen slightly short of where we'd expect them to be. So when we see these figures coming through in the next quarter and month by month, you're-- I'm confident that we're gonna see the improvements. The thing we now need to do is make sure we sustain that and that's the challenge we'll set ourselves. Thank you. Any other points or questions? No. So we're asked to note this report. Is that agreed? Thank you. Item 9 is the change management reports and I think Nicole, you're going to introduce this. But as you do, can I just say I'm very happy that there's a description of all the individual projects which is something the committee asked for. So I'm pleased that that's with us to get some scrutiny. Thank you. Nicole. Thanks, Nick. Just calling out a few of the highlights from the report just to say that obviously the communications team which is part of change management have a large contingent of businesses usual type work to do including the annual benefit statement. So working really closely alongside colleagues and service delivery to make sure those annual benefit statements went out. So that team has a large number of communications that they're responsible for as well as some more transformational things. And really pleased to say that we're all on track with all of those kind of businesses usual communiques that we support. We've also been nominated for a number of awards. And I hope next time to be able to tell you more about how we have done on some of those. But very exciting to be for the work of the whole team to have been recognized. For the eagle eye amongst you, you may have noticed that the reports template has changed slightly. This is in response to the need to ensure that the template is accessible. This is particularly for those who are using e-readers. So you'll notice that, well, there's not a huge amount of change, but those eagle-eyed amongst you may have seen that and you may see the format of things changing slightly so that an e-reader will be able to make sense of what is on the page. From a learning and development perspective, we have just -- well, in June, we closed our third staff survey. So the results of that will come out in your next meeting. But just like Tom did, I'll give you a sneaky peek and tell you that the numbers have stayed broadly across most areas, similar or slightly above. So I'm delighted with that progress. We have continued with our really highly successful Lunch and Learn program. That is something we hold biweekly, which is twice a month. I realize you can always think about that different ways. But yeah, it's twice a month. And the topics more recently have been in the equity, diversity, and inclusion space. So we've been talking about neurodiversity, for instance, as part of that. We get really healthy attendance coming to those. And it's a program that we launched probably coming up to nine, 10 months ago now. So I'm really pleased that that continues to be a forum that people enjoy and take time out of their day to come and help develop themselves. Recently, actually, we had a fantastic Pensions quiz that Collette ran for us. And I will tempt you towards our, which was my next point, our board and committee residential training on the 23rd and 24th of October in Winchester by saying to you that that quiz will be repeated by popular demand. So I hope you will be looking forward to that. We are supporting a record number, actually, of the Surrey Pensions team in their certificate of Pensions administration. So that's great that we're investing in those people for the future. And we've also been looking at a program to help upskill the leadership capability of our extended leadership team. So that has been across both learning and development, and we're looking at that from a transformation perspective as well. So some cross-working there. As Nick alluded to, we've got a number of projects that we are managing through the project management group. There's eight in particular. The most significant ones of those, of course, are the ones required from a regulatory perspective, which are McLeod and GMP. And Nick will continue to provide you the update of what's happening with each of those in more detail as is requested. Finally on transformation, we're making steady progress on getting a digital transformation strategy together, certainly the kind of lower hanging fruit area of things that we can digitise. Maybe it's electronic forms and that kind of thing for year one is well in play. And Tom is leading a lot of that work within his team. But we want to look at how we can really use advances in technology across that are coming from all over the place, not just within the pension fund. How we can take some of those innovations and build them into the way that we are working so that we're really fit for the future to that end, I have to say, my level of digital knowledge isn't strong enough. So we are looking at bringing in some external advice to support us with understanding what's happening in that dynamic world of digital innovation to understand what might be applicable to us and do hope that we will have something more to share on those latter years of our digital transformation soon. The governance side of things, I popped on my camera when Neil presented that item because we've been, as a transformation team, we've been heavily supporting on that and delighted to hear that that has now passed through that very first, I think Nick you called it baby steps towards the future and I'm really pleased that we've managed to achieve that today. Really we continue to work on our culture and as I already mentioned, looking at the extended leadership team and how we can help support them to become even better leaders and great successes indeed for the PSLT, our leadership team. That was all I intended to say. Very happy to take any questions if you have them over to the table. Thank you. Any questions of Nicole? Okay. Thank you for a very thorough run through of this important area, Nicole. Thanks. Thank you. No worries. We're asked to note the contents of this report. Is that agreed? Agreed. Thank you. Moving on then to item 10, the draft annual report 2324. We've got Colette online in relation to that. This is an annual requirement and it's a very extensive and long report, which I'm sure you've read from cover to cover. So Colette, please, if you can introduce this item. Certainly. Thank you, Chair and good afternoon members. So as you know, we're required under the regulations to produce an annual report that follows statutory guidance. So this time it's new statutory guidance that was issued by MHCLG dated April 2024. And this replaces the old SIP for guidance that's been in existence since 2019. The guidance contains the usual categorizations of must, should and may. The guidance is more structured than the previous guidance. So we have followed exactly the sections as in the new CLG guidance. The new areas covered are increased fund management, governance and investment information included and a particular interest on the administration side is there's a standardized way of reporting KPIs now. So it will be much easier in the future to compare ourselves to our peers. The big difference, although the report still runs to nearly a couple of hundred pages. The big difference is here that we are no longer required under the guidance to actually include hard copies of our policies and strategies. Although we can include links and all the policies will be then added to our website, they have to be extant as at the 31st of March for the year. So we will any amendments that have been made since that won't be reflected in this annual report. So the report has to be published by the regulatory requirement of the 30th of November. It has been circulated with local pension board members and our external audit as well. No comments from external audit on this as yet, although they have acknowledged receipt of it and it is being looked at. So the report here now asks that final approval be delegated to the chair of this committee before, but obviously we can take back any comments or suggestions, et cetera, from both members here at the committee and at the board. And we can do that over the next few weeks. So there's no initial hurry to add anything to it today. Thank you. Thank you, Collette. I did note that it's considerably shorter than previous years because we did have to publish communications policies and a number of other policies in detail. So it's welcome that there's a click link through to that. So I'll open it to questions from members, comments. Could I ask, in relation to financial performance, the status of the audits of the accounts which are included in these? Can we have an update on where that now stands, please? Yes, certainly. We are actively, obviously, engaging with EY. We had 143 portal items of information that they required, 59 line items that they have accepted, 79 are still under review by EY, and we have four outstanding, two of which are not actually due until November. We've agreed a fairly hefty timetable of items that we're working on with them at the moment on both their side and our side as well. They have indicated that they've probably got three weeks' worth of onsite testing that they still want to undertake, and we're currently in negotiations with them around when they're going to come back and do that. They've indicated end of October, we would like them to come back earlier so that we are in a better position to complete the audit by the November deadline. Thank you. I don't notice any further hands up, but Neil? Just for clarification, we do publish, we will publish the draft annual report by the November deadline, even if the accounts are not yet, the audit isn't complete, that's not an unusual occurrence due to the dependencies between pension fund and counselors. So it may be that we're unable to complete the audit due to dependencies of the council and then complete their audit. I'd also just like to highlight this, this is the first year of the new SIPFRA guidance on the annual report, and the request from SIPFRA for this year was best endeavors rather than the statutory requirement, and I just want to commend the team for their efforts on meeting that before the actual statutory requirement too. Yes, thank you, certainly the committee would agree with that. So I'm going to move to the recommendations. Committee notes the content of the draft annual report as shown in Annex 1, make any recommendations as required, don't think we have any specific ones, and agree the approval of the final version of the report delegated to the chair subject to an unqualified audit. So is that agreed? Agreed. Thank you. Okay. So moving to the investment side, assets and investments, Item 11 is the investment management performance and asset liability updates. Lloyd, you're going to take that, and there's a particular point relative to LGIM and you have LGIM online, so perhaps after you've introduced it, we'll take the LGIM matter as well. There is also in the Part 2 section of the report a confidential letter from LGIM, and I think if we need to go there, we will need to go into Part 2. So let's listen to LGIM in the Part 1 element. So over to you, Lloyd. Thank you, Chair. Yes, Neil's already mentioned the funding ratio, 143 percent, and that was the two effects, a lower discounted liability number, but a higher asset number as well. So yes, nearly 6 billion pounds for the fund. If we take the assumptions for that analysis that we used at the last valuation, the funding ratio is just 100 percent. So it's always worth bearing in mind, you know, the difference that those assumptions have made. Although the fund, that is improved and the fund's up to 6 billion, the fund itself underperformed the benchmark over the period, there's a couple of notable underperformances there. The Border to Coast Global Alpha Fund, which we've discussed in the past, and there are ongoing discussions with ourselves, MRSA, Anthony Fletcher, the independent advisor, and Border to Coast around concerns and issues about that fund, and that's ongoing. The other area of underperformance, although it's a smaller part of the portfolio, but you may have been surprised to see, was that one of our index tracking funds from Legal and General, the European fund, ex-UK, actually managed to put in quite a significant underperformance, and given that those funds are designed and do track, that was a standout, and that is why I've asked two people from LGIM to join us today, James and Kathy, and perhaps if I hand over to them, to introduce themselves and explain the situation that's happened with performance of, in particular, Europe ex-UK.

• Great, thank you, Lloyd, and good afternoon, all. So yeah, appreciate the time today. I'm James Sparsh, our Head of Strategic Client Team, and also your Client Director. I'm pleased to say that I'm joined by Kathy Vaulter, who's our Head of Tax. So I think just to give the background here, we wrote to all pool fund clients in June in respect to changes we were making to the treatment of withholding tax on dividends. Where withholding tax is likely to be refunded from foreign tax authorities, LNG pensions management includes the value of this withholding tax within the net asset value of the pooled funds. So this is known as an accrual, and it means that the value of each relevant pooled fund accounts for the expected recovery of tax. This ensures that all pooled fund holders, such as Surrey Pension Fund, benefit from the value of such reclaims in the expectation that they are recoverable. This is a standard market approach across most UK and European jurisdictions. Now based on tax advice that we received and recent developments in those jurisdictions, we concluded that withholding tax paid on dividends from Swiss and Belgian holdings is effectively no longer expected to be recoverable. Therefore, we made the decision to make the adjustment in June to the net asset value of the pooled funds by removing the accruals that relate to those Swiss and Belgian holdings. The adjustment of these accruals meant that the value of the pooled funds was reduced by the corresponding value of the withholding tax. So investors in Swiss and Belgian companies incur withholding tax on dividends of 35 and 30 percent respectively. However, as part of a wider tax treaty, UK pension funds have historically been able to recover all of those taxes. So following numerous filing challenges with both the Swiss and Belgian tax authorities, we received tax advice that this withholding tax was unlikely to be recoverable and therefore the decision was made to remove the accrual from those pooled funds. We absolutely will continue in our efforts to reclaim this tax on behalf of all of our clients and we have actually engaged with HMRC on this matter. So we understand that other UK pension funds are also impacted and approached HMRC as well for their assistance in reaching a satisfactory resolution with the Swiss and Belgian tax authorities. So this is not a legal and general issue or error. So should we reach a positive outcome in the future? Any successful tax reclaims and the proceeds there will be applied back to the relevant pooled funds in line with our policy. So that is a kind of overview of what has taken place. As Lloyd mentioned, there was that adjustment, particularly on the Europe ex-UK fund versus the reference benchmark. And as a result of this situation, we are currently reviewing the benchmarks we have in place with our pooled funds to ensure that they remain appropriate for the tax treatment perspective that is happening here. So of course, we will absolutely keep you and your advisors updated in respect of any changes and yes, that's the overview and happy to answer any questions you may have. Thank you. If I could just clarify, this is really a one-off item, reversing out all the accruals. So we should see in future quarters, you know, on track delivery against the benchmarks. So with regards to the actual, yeah, the fund management, the delivery of market returns to the reference benchmark, that is absolutely what we will continue to do. But we are reviewing our reference benchmark with regards to the challenges that we have faced with regard to Swiss and Belgium authorities. Thank you. I've got a question in the room from David Harmer. Thank you. Presumably, at some point, you will have to recognize that no progress is being made on those issues. Could I be able to suppose that at that point, you would dispose or sort of withdraw those investments? So yeah, effectively, the adjustment that we made in June reflects the decision that business has made, that we believe that we will continue to try and recover these withholding tax, however, the decision was made mid-June to reduce the net asset value of the relevant funds. reduce? Kathy, I don't know if there's anything else you want to add there. Reduce or eliminate? You're just on mute. Reduce, reduce to zero, or reduce to some random number? I think it's just to take the tax element out. Correct. That would presumably have a calculated effect on the value of those investments, would it not? Correct. So we have taken the withholding tax on Swiss and Belgian stocks, and we have reduced the value of, for example, the Europe XUK fund by that amount. So absolutely, there is a calculation behind that adjustment. David, if we look at the performance report in this quarter on LGM Europe, we see that there's an adjustment to the value of 2.65%. That's in the numbers. That's not what I meant. If we can't recover that, presumably that changes the value of investing in those countries. Sorry, if I may, have they not just said that effectively, the previous position was that we thought that there is a tax burden which was recoverable. The latest advice is that that is no longer going to be recoverable, so therefore the value of those investments has been adjusted accordingly right now, and they've also said that they're going to be reviewing, potentially, how much they invest in Belgium, as I'm effectively saying, well, now we know what the new situation is, we're going to be reviewing those investments in the round to see if it's going to be about what the best course forward would be. Thank you, George. I mean, this is a passive fund, so I'm not sure to what degree those sort of judgments will be made, but James, can you clarify, will you adjust where you're going to put the money? No, so we will absolutely continue to mirror the reference benchmark. So using Europe, ex-UK as an example, Switzerland is 18% of that market and Belgium is 2% of that market. Our fund will absolutely mirror the weightings within those different countries that make up that Europe ex-UK fund. I agree with what the member said around, we have reduced the value of the relevant pooled funds on the expectations that we will not be recovering those withholding tax reclaims. But going forward, so the reference benchmark that we use currently assumes that we recover withholding tax reclaims. We are currently reviewing that reference benchmark. No decision has been made yet, but we are reviewing that reference benchmark and it could be that we change that reference benchmark reflecting the fact that to date there have been challenges in reclaiming Swiss and Belgian withholding tax. But again, I would just echo, this is not a legal and general problem, an issue. This is across the board, all investors are in the same position with regards trying to reclaim Swiss and Belgian withholding tax. Thank you. So the implication of that is that everybody who's got their head screwed on would be wishing to withdraw from those two countries. In as much as this is a passive fund we've chosen to invest in, then we would remain invested, I guess. George? Yeah, correct. So we will absolutely remain invested in Swiss and Belgian because that is the reference fund matching that benchmark. However, currently you do not enjoy zero tax on Swiss and Belgian dividends. At the moment, you will be investors incur a tax of 35 and 30 percent respectively. Historically, we've been able to reclaim that tax. However, at this point in time, we haven't been able to reclaim that tax. George? Yes. So again, I mean, I think the point is I think when saying about adjusting the benchmarks, my interpretation of that is that if Switzerland, say, is 16 percent of the relevant market we're looking at, we need to continue investment in that segment of the market to continue to be benchmarking. But if there is a significant tax liability associated with that investment, you might say either reduce the weighting of that to 15.5 percent, for instance, to accommodate that, or you might say actually in order to get the equivalent term, we need to increase the investment. So that's the point, presumably, is that the tax liabilities change the nature of investing in that area of the market, so therefore you need to review what is the appropriate level to invest in it. But that's not the same thing as looking at not investing in it at all. George, in as much as this is a passive market, we're following the passive index, so we won't be -- I doubt whether we'll be making any changes because that's the nature of passive investment. Cheryl, might I make a comment? To put this in context, this is about tax on dividends, so it's not on the capital. It's just on the dividends. So it would be a relatively small percentage value of the annual -- if you look at the annual income versus the capital value, as LNG is saying, the adjustment you see now is probably -- I don't know, but it will be several years' worth of dividend withholding tax that they've written off, so that 2 percent is not something you'd expect as a drag every year. Going forward, if they do not adjust the benchmark, there will be a small, very small drag from the fact that, you know, the benchmark assumes you can claim the tax, and, in fact, you can't. And that will be a small drag. Adjusting the benchmark clearly will, you know, take that drag out of your performance numbers. I'm a very simple soul, and if I was faced with that, I would reduce my holding from -- in my table -- from 18 percent to about 12 percent to compensate for the loss that was going to be incurred by paying a third in tax. So dividends are only one part of the return on a share, only one part of the reason why you would do it. I guess the fact is, given that it's a market-wide thing, that might have happened already. I mean, it's not just us who are suffering the lack of withholding tax. It's everybody else. And so if the market as a whole thinks that Swiss shares are less worth holding because of that, then you'll see some adjustment in the price, and that's probably happened already, so to speak. Well, that wouldn't -- or to my future view, looking forward, I wouldn't play in that particular ballpark, but we'll see. You'll see what the market changes, but it's -- we are passively invested in that regard. If I -- I have one question, if I might, which was clearly the tax people, the accountants will have wanted you to make this adjustment to take out this accrual straightaway as soon as you're aware of it. I'm just wondering if there was any kind of legal view about treating customers fairly, given the, you know, moderate scale of this adjustment. Is there any legal view about is it fair enough -- is it fair to do it all at once, or should it be staged in some way? Kathy, would you like to take that one? Yes, just to clarify, I'm not a lawyer, but I am close to the advice that we did take internally, and it's a very good question. We did have a legal view, and as you can imagine, some very detailed discussions about one hit versus easing it in, but the legal opinion was that doing it in one go was the best way to treat customers fairly. Otherwise, some people might see what was happening and be able to move out of the fund or adjust their holdings in some way. And so the legal view and the view from our compliance teams as well was that the best way to do that was in one go. Thank you. Lloyd. Thank you, Chair. Actually, it was on a related point because I think it is worth emphasizing that we -- these were accruals over a number of years when we weren't involved in the fund. So we have bought units with accruals that didn't -- as it turned out, didn't really exist. So we did, in effect, pay the wrong price, and yet we are being asked to take the full hit of the units that we have now. So I think it is a fair point to raise that people that sold units have got an inflated price, and we bought units at an inflated price and taken the full hit when we didn't even own the units in the past. So that's the same effect as happens with [inaudible] bonds, which work roughly the same way, but it's not a tax. It's the other way around. It's the opposite. Interesting. Okay. Thank you. If there are no further questions on that, can I thank you, James and Cathy, for joining us. Thank you very much. Thank you. Have fun. Goodbye. Thank you. And back to Lloyd for any further comments or to answer members' questions on this paper. Okay. Thank you. Just one comment, which is that as well as the two funds that Lloyd talked about underperforming, the private markets underperform, that I think is more a matter of having, from my other experience, having given yourself a very tough benchmark of the equity, the MSCI world as the benchmark for private markets, but I'm not quite sure why you did that, but that was clearly a preexisting decision. Yes. Good spot, Adrian. Yeah, no, we have discussed that in previous meetings, in fact. Thank you. Lovely. Thanks ever so much. On the BCPP Global Equity Alpha, this is the single largest contributor to the fund underperformance. It mentions that this has been escalated to the chief investment officer, and I just wondered whether, you know, when we would like to get, I suppose, the feedback from that or how that was going to come, or whether you could update us on that. Good question. Yes. So that was a request at the last quarterly meeting because of the ongoing issues and concerns, and officers, anti-infection independent, Steve from MRSA, did indeed meet the chief investment officer. I think that was the first meeting. I'm not sure that we made particular progress in that meeting. We've now had, officers have now had subsequent meetings with border to coast, and as of a meeting that I attended in Leeds last week, there's going to be another workshop with all partner funds because obviously we're not the only holders in this fund, and so the other partner funds are showing obviously a lot of attention to it. So it's not gone in the diary yet, but I think in the next couple of weeks there should be another meeting to further develop that. Anthony is obviously not here to express his views, but I don't know Steve or Adrian, whether Anthony passed anything on, but Steve, if you have any other comments. The overriding word that comes to my mind is like frustration, and in that it's not clear that border to coast are really taking on board the feedback and comments from partner funds because there's a lot of defensiveness in their comments and not a huge amount of signs of change. But to be fair, they are working on introducing a new additional sort of global activity manager with a growth philosophy. That will be the first manager change that is implemented under the oversight of Joe, the CIO. So that process I think will be sort of interesting to see in practice, to see if it's different in any way from previous changes. Thank you. We've got Milo, I think online, I don't know if you want to offer any comments at the stage on that. Yeah, thank you very much, chair. Yeah, I think I would just echo what Lloyd mentioned in terms of the process being followed. We are looking to undertake a workshop, as Lloyd said, in the next couple of weeks to go into more detail on the concerns that each partner fund has so that partner funds are benefiting from that collective oversight from all offices. We are undergoing a procurement for a new manager to come into the fund, which has been mentioned by Steve, that is progressing well, and that will be the first step in consideration of changes. Once we have identified that manager to fill a gap that we have identified, we will then consider what other changes need to take place within the proposition. I would say that that isn't kind of playing at the edges, we could see some quite material changes to the fund, which we will take officers through and make sure that we are fully working through that together with officers. Thank you. In relation to sort of the concerns and continuing frustrations that Steve has expressed and which I think, you know, have been-- has been going on for quite some time now. I think given what we've heard, you know, obviously, it makes sense to continue to give Border Coast a chance to see, you know, how these-- how they progress with this. The question I'd ask, and this is sort of looking in terms of horizon scanning, I'm sort of preparing for an eventuality. I mean, you know, if we were to find ourselves in a position where our concerns continues to go unaddressed satisfactorily in our estimation, what would ultimately be our recourse? Would it be looking at potentially changing our pooling arrangements and moving to different pool or is this a situation where we don't actually really have any recourse? Should we find ourselves-- our concerns continue to go unaddressed? There are other alternatives within the PCPP arrangement. Lloyd, do you want to talk through that? Well, the alternatives within Border to Coast at the moment would be an in-house managed global fund which at the stock picking level has done well but has had a very poor asset allocation, their asset allocation to geographies. And so that has-- whilst it's outperformed their bespoke benchmark over the last year, it hasn't outperformed the MSCI which we use as our benchmark because of that asset allocation. They are considering other products, global products that are coming through factor fund. But I think as we should be discussing in October, we've also got the philosophical debate about active and passive and where the funding ratio is. And of course, we do global funds which can either be market cap or future world. So there are those options within the current environment. I was going to say exactly the same as Lloyd. Realistically, I mean, potentially moving out of the pool is not realistic though. Thank you. I imagine that might be the case. I guess one question is in terms of taking note of the fact that you mentioned like the eligible alternatives for instance. I can definitely see that that is potentially and something we can look at as a recourse. But how-- but I mean, wouldn't that not put us in a difficult position in terms of the government's desire for a great proportion of funds to be pooled rather than independent? You're exactly right, George, it would blow a bit of a hole in that. But I mean, it is a bit of a conflict, isn't it, really? If you're fully in the pool and you're committed to the pool, then what are the alternatives, you know, to leave the pool? An alternative is to get the fund manager to address the concerns which is I guess what we're trying to do. Neil. Just a couple of points of clarification. Firstly, you know, LGM is under-- is classified currently by the government as under pooled management because we have a joint procurement with our 10 partner funds and Boulder to Coast also manage oversight-- some oversight for us on that. Just to put the context of our relationship with Boulder to Coast, we're not a customer, we're an owner. So, for us to, you know, it will be beholden upon us and our partner funds if we felt there were fundamental issues with the company to challenge the board in the normal way. Thank you for the questions, Duncan. Did you have any-- your question answered? The only other point I'd raise, I was interested, they don't-- Boulder to Coast don't seem from what's being said terribly responsive to our concerns. Did they? They didn't-- it's the only thing which slightly concern me. I mean I can see, you know, the underperformance kind of thing. But from what my colleague was saying, they didn't seem to respond to that particularly effectively or particularly swiftly. But just-- [ Pause ] So any further questions, comments? No. So we're asked to note the main findings of the report in relation to the funds evaluation and funding level, performance returns and asset allocation. Is that agreed? Thank you. Moving on then to item 12, company engagement and voting updates. I think Mel, you're going to introduce this particular topic. Thank you. Yes, thank you. So we have our usual links to the quarterly engagement reports from LAPFF and RABECO on behalf of Boulder to Coast. Those are in the report as usual. Quarter 2 is always really active in the year with annual general meetings. And a lot of the activity that's taken place this quarter has been around that activity. So as you can see, we have a bit of a concentration in climate change as we do. And the rest of the SDGs that have been touched by that activity have been more or less equally dispersed amongst the rest. Some of the things that happened on our train today came to light as I was thinking about this. And I'll actually just focus on one because I know we've had a long meeting. But the finance engagements on both-- from both LAPFF and RABECO are getting more and more focused. It's been noted that Canadians and big Canadian banks are lending to oil and gas companies. And the LAPFF has actively engaged with three of them this quarter and to some decent results. On the other side, RABECO has extended-- they have a climate-related transition plan for the engagement theme for finance. They've extended that theme and broadened the scope to include climate-related and nature-related. So we see the interconnectivity between the different themes as we go. Our voting, we did-- outside of border to coast, we did vote in 40-- the fund did vote in 40 AGMs to nearly 750 resolutions. We did vote against management in nearly 28 percent of those. There are loads of details of companies and outcomes in the annexes and all of the reports as well. Now, I'll turn it over to you for questions. Thank you. George. Sorry, I couldn't find the button there. So just-- so this is obviously-- this is-- if it's okay to-- just check those all. It's okay to ask questions about all the appendices on this item. So, you know, yeah, fine. So I wanted to note that reading through it, I think, as mentioned, I think-- as you just mentioned about would be current best strengthening of the area and climate and particularly adding in nature, I think it is very welcome. Looking through some of the papers and some examples, I think we've got some good examples of actually of how engagement is working well and also examples of where, you know, of where we've got the sort of investments we do want to be engaging in. So I think, for instance, there are no examples of companies where-- which are getting low scores, largely because of a poor level of reporting, either because they're new-- relatively new or because they just not reported previously in where engagement is leading them to incorporate that report-- that reporting which is, you know, a good example of how it works. I think-- I'm probably butchering pronunciation here but Iberdola which is a single-- given as an example here of a-- of a Spanish energy company which currently has natural gas power plants but is transitioning and has a clear goal to get to net zero in it from its operations by, you know, ahead of 2050, you know, which is a fantastic example of the sort of transition we want to be seeing. But by contrast, I note that on page 356, paragraph 17, we also seem to have a very good example of where engagement hasn't had the desired effect in terms of, you know, where they've had a three-year process of engaging with financial institutions, obviously there have been some successes in some areas but they give examples particularly North American institutions, particularly Canadian institutions where the engagement has amounted to no meaningful change. And obviously the nature of-- as I've discussed before, Robeeko, their role is to continue engaging because they will always have people invested who are using their services. But for us as a fund in our own right, where we have clear evidence like this of where the engagement on matters which are covered by our I policy have not led to success, it's the perennial question of what action are we going to take in these-- where we've got these examples based where engagement has not had the desired effect even after three years of targeted engagement. So that's sort of my first question. Okay. I'll attempt to answer that and I might turn it over to Milo or Boyd. In this instance, Robeeko is the engagement partner for Border to Coast and there's a clear engagement strategy in the responsible investment policy followed by Border to Coast. I might turn it to Milo to expand on that a bit more if that's okay. Yeah, of course. Thank you, Mel. Yeah, you're right that-- and I would say that Robeeko's engagement certainly is a kind of-- a lot of the themes that they send out that they assign to their engagements will be multi-year themes that are reviewed as they go through. We fully recognize that escalation at some-- well, engagement at some point will reach a stage where either there is a favorable or an unfavorable outcome and escalation may need to be taken where that is the case. I think I would also kind of just note as well the Robeeko reporting that's included in the pack and at times include reference to holdings across our kind of wider portfolio base as opposed to those specific to Surrey. So some of the specific stock examples that they're giving may not necessarily be entirely applicable to Surrey's holdings, but I would kind of leave with the point that a lot of their engagement is over a multi-year period and they are very much kind of considered to be an industry leader in this basic engagement. But if I may, I'm not sure that really answers the question in the sense of I'm not suggesting for Robeeko on to market leader. You know, I'm-- you know, I'm not suggesting, you know, there's a problem there at all. What I'm suggesting is that yes, we have multi-year engagements, yes, we have reporting on them, but we have a specific example here of where there has been the completion of a multi-year engagement process and Robeeko are telling us clearly, well, here's who have responded, here's who haven't responded well, but what are border-- you know, but we have-- I appreciate that border codes have their ROI policy, they have their engagement policy, but, you know, but we seem to have-- repeatedly have these examples of where engagement concludes without the desired effect of engagement. So the question is, we always talk about engagement with consequences, but where are the consequences in this case 'cause I've not heard any suggestion from what border codes have said, but off the back of, for example, paragraph 17, they're planning any consequences, any changes whatsoever. So, yeah, and that's the sort of question I'm asking is, am I wrong in that? Are border codes actually planning on taking action as a result of Robeeko telling us that the engagement hasn't worked with some of these institutions, or is it just going to carry on being business as usual? Because if the case-- if that's the case, then what is really the point of having these engagement reports? Yeah, so, if I could just clarify the reference that you're referring to there, George, that this is on page 350, I appreciate that it's a wider comment, but when you refer to paragraph 17, is that the reference to climate and nature transition? Yeah, apologies. I think on the PDF document, it's-- well, it's 356 as the actual physical page, but the actual page number-- but yeah, so it is page 350 as the actual page number itself. Yeah, brilliant, okay, so I think the steps that we would take in terms of where an unsuccessful engagement would lead us to would be very specific to each company. In general, we do have, you know, a step of-- a stepped escalation approach to engagement and ongoing consideration of risk and, I guess, the outcome of that engagement with the companies that we invest in. How we work through those steps and work through those steps will very much be company specific. I think that some of the comments that are referred to in here are very much specific to RABECO's broader strategy, so some of their themes will cover companies that we invest in, but it may also cover companies that we don't invest in. Since kind of broad commentary on the theme where they will be targeting a collection of companies, I'd be very happy to kind of take it away and bring out some examples, and perhaps within that theme of organizations that we do invest in and where some of that engagement has got us to, if that-- I think that would probably be useful as opposed to kind of trying to dive into this more general comment from Rabi. I think that would be useful, but continue George. Yes, I was going to say, I do think that would be useful and I would welcome that, but I think the point I'd make though is I appreciate that this is an engagement and voting update in itself, so I understand why this is focusing particularly just on reporting on the engagement process and the voting itself, but if you're saying that, and indeed this is what I'd expect, that there will be actions taken, escalations taken off the back of the engagement, off the back of voting outcomes and things like that and responses, it would be very helpful if this report routinely reported on what those escalations are taking place and, you know, and things of that nature because I think at the moment we're only really seeing half a picture, we're seeing well here's the evidence base we're getting effectively. We're not seeing any indication of what decisions are being made off the back of it, which I think has been a recurring theme on this, but certainly the information mentioned will be helpful. To change the topic entirely, my only other question on this one is, and this is perhaps something which is more a question of something which we could potentially feed through to RABECO or our engagement partners, is obviously a particular big area of investment at the moment globally is AI technology in particular, but of course one particular concern around with that is the incredibly high energy usage that goes along with it and the massive expansion of data centers. It's obviously, it's an emerging area, but I'm just wondering if it might be worth potentially suggesting that that could be a, that feels to me as a theme where there will be a need for engagement in the future to understand how the tradeoffs between the need to invest versus the ecological impacts are being managed. And that's all I have to say, so I'll shut up now to your relief next. I think that's a good point, and there's been a lot in the press about how AI requires much more than regular computing as it were. So yes, let's ask questions about that of our advisors. Any further comments from officers or members? David. I'd just say I think that's premature, because the correct answer that you get back is we don't know yet. Let's ask and see what thoughts are on those lines and if that is the answer. Thank you. Okay, I'm going to take it to the recommendations. They're on page 351 of the electronic back concerning the reaffirming of ESG factors, fundamentals to the fund's approach consistent with the RI policy through continuing to enhance its own RI approach and SDG alignment and acknowledge the outcomes achieved for the quarter by LAPFF and RBCO through their engagements and to note the funding, the voting records of the fund for the last quarter. Is that agreed? Agreed. Thank you. If we can move on then to item 13, RI updates, it's on page 383 and Lloyd you're taking this item I think. Yes, thank you chair. The first point to note on the update is as we've already mentioned I think earlier today that the fund was successful becoming a signatory to the stewardship code. So we're very pleased to see that. As you know it's a massive piece of work, huge document that went to them and we have got a few bits of feedback that we can work on but good to get that signed off. The second element within this paper is the draft TCFT which as you know we've been doing now on a voluntary basis for four or five years. Still no requirement for us to be producing this but we do anyway. It is a draft, there is a bit of work to do on one of the graphics early on which we'll be looking at before it gets finally published but the main meat of the document highlights that for all the metrics there's been significant falls, significantly ahead of the market and the benchmark changes on all the different metrics. I think one of the most notable aspects is the impact from a fund switch where you'll recall last July, well 15 months ago in July we switched from a passive emerging markets fund to an active emerging markets fund. And that, emerging markets has been our biggest contributor to carbon throughout the portfolio. So although less than 10% of the assets it was sort of over 30% of the carbon and by making that switch we've stayed invested in emerging markets and we still have the opportunity to outperform the benchmark now with the active management. We're still involved in just transition but we have significantly reduced carbon exposure by over 50% within that area and that's been a big factor in driving down for the whole portfolio. And I think that plays to the committee considering the whole range of SDGs and thinking about real world because obviously optically we could have just sold out of emerging markets completely. That would have collapsed our optical exposure but wouldn't have done anything for the real world or for the other SDGs. So all the other factors, all the other metrics have come down. There's been a range of other factors which given the equations could reverse the other way. If a company grows its sales just because of inflation, you know that can make the numbers look better. If equity markets rally, the numbers can look better just because equity markets have rallied so they could reverse. But I think underlying all of that is that the trend has made some decent progress this year. Thank you. Thank you Lloyd. Any comments or questions? Duncan. That was a good report. I enjoyed reading it. Thanks very much. Thank you. And I'll also say it's good news. We're asked to note this report and to note the success and approve the funds TCFD report for the year 23-24. Thank you. So moving on then to item 14, the asset cost focus real estate. And Lloyd, you're going to take that. And we have Adrian Brown substituting for Anthony Fletcher. Thank you. Yeah, thank you Chair. So as you know we have the regular asset review. This time was real estate. Anthony did attend that meeting and has done the write-up. But Adrian will comment in a moment. I think a couple of points just to mention is that having previously signed up to go into the border to coast global real estate fund, that obviously takes time to deploy assets. And we've now had our first drawdown into that fund. So that happened in April for a couple of million pounds. So that has now started. And the second element is that we agreed that we'd be looking to go into the UK, the border to coast UK real estate fund. And that is coming up now to a close, close to a go, no go decision from border to coast to launch that fund. We won't be in the first wave because we're not transferring physical assets in. So potentially, which is, but with that I'll hand over to Adrian. Thanks Chair, thanks Lloyd. Well, so I will just go through the key points of Anthony's report, which is on page 417 of your PACS electronic 417. And they're kind of two halves. One is looking at the real estate investments that you've got at the moment. And the second is looking at the transition to borders to coast. So I'll deal with the, those, each of those. In terms of the, you know, the current status, it's about 25% global, 75% UK managed by CBRE. I think Anthony has a good opinion of CBRE's capability. And so very happy, well, comfortable with their record and their approach to investing. And I guess the good news there is that CBRE, the global fund, which they manage for you, is going to be a significant part of the borders to coast global property offering. And indeed, I think that that holding will transfer in specie, which makes it more efficient. So very happy with the global. On the UK, there are a number of funds. Performance on the UK has been slightly more challenging. The market here has been difficult, partly because of defined benefits, well, closed DB pension funds going for buyout and selling all their illiquid assets. And so a lot of property funds have seen significant sales pressure from DB funds that are aiming to de-risk, if I can put it like that. There is still some of that overhang left. I mean, I think, from my external experience, probably most of that has happened. Most of it's gone, but there are still some funds that have significant cues. As a result of that, I guess the expected returns that CBRE will be talking about on global real estate sort of high single digits, nine plus percent, whereas there is less capital growth in the short term expected. But having said that, you know, the yields on the UK are still pretty attractive. I think it's about three and a half percent net. So that's the overall view of CBRE and your investment. In terms of borders to coast transition specifically, as Lloyd mentioned, the global fund, as I understand it, is open and, you know, the-- Anthony has made a comment that the transition is slightly, quote, slow. I think that refers to the fact that as well as the global-- the CBRE global fund, borders to coast are also proposing to add some additional funds into that global strategy and, as I understand, it might-- may take 18 months for them to decide to sort of finalize that decision. And so, you would like to put, I think, more money into real estate. You've got about three-- a short 300 million at the moment and your allocation, your sort of target allocation would be another 100, 150 on top of that. You'd clearly like to put some more money in. You might know a colleague from borders to coast as can come in after me and comment on that. As regards to UK fund is concerned, clearly that's three quarters of your assets. That will-- one of the benefits you'll get from the borders to coast fund is by going into the borders to coast fund versus what you've got now is that you will have some exposure to direct properties. As Lloyd mentioned, some of the other members are putting direct properties, direct held assets into this borders to coast fund. And that's the first phase which is, you know, I guess happening pretty much now. Direct properties, you know, they're less diversified, that's a negative, but they do mean probably lower fees. There's no sort of fund management fee and there's less risk of liquidity problems. People buying and selling if you're in a fund with very stable investors which you will be as a local authority pension fund pool. So, you know, I think Anthony sees the exposure to direct properties as being a good thing. You have some UK funds that will transfer in specie, again cost saving, but most of them will probably need to be sold beyond March next year. That probably covers comments that Anthony would have wanted me to make. So any questions? Members, George? Yes, a bit of a niche question. So I'm not expecting you to have the answer at your fingertips on this one. But obviously one-- the question is what steps are being taken to manage the potential financial obligations in the future in terms of types and regulations around building standards particularly in terms of both commercial and non-commercial rental because I'm aware that that is a-- it's a fairly reasonable assumption to make that there will be increasing testing of obligations in the standards in the future. And obviously I'm sure that something which is being managed-- I'm just interested to understand how that is being managed because of course it's actually about preparing for something which you can anticipate but which you don't yet know the exact shape of. Yeah, well, I mean I'll answer generically and please if anybody else has got views do. Two areas where I'm aware that, again, this wouldn't be borders to coast who are doing this. This would be the underlying manager, so CBRE or any of the other fund managers are absolutely looking at this kind of thing. The two areas that I'm well aware of, one-- the main one is certainly energy efficiency, climate accreditation of legislation about not being able to rent buildings below a certain EPC rating and I can't speak for the explicit managers 'cause I don't know but all the managers that I have spoken to in the real estate space are absolutely migrating their portfolios. They've got plans about office books that are not efficient. There's, you know, you've seen over the last couple of years legacy stranded assets happening of office books that are probably old and too expensive to convert, you know, you've seen the price of those absolutely tanked because nobody is buying them. So I think that the fund managers are very, very well aware of that. The other one that's the area that I'm sort of conscious of but I think is probably new is that clearly the new government is keen to improve renters' rights and, you know, you do have some exposure to, I think, to residential property that would be-- it wouldn't be surprising if that were a component of a number of the UK funds, affordable housing kind of things, quite what effect that might have on the legal balance between landlord and tenant I think is still undetermined but will be something that the managers will absolutely be thinking about. No, thank you. Just to add to that, I think obviously any further information available would be-- would definitely be interesting. I would say though is I think from my perspective I'm thinking less about residential which is sort of a known at this point but more in terms of it seems quite like the more commercial and industrial where at the moment typically tenant rights and standards required are much more just sort of market driven rather are regulatory driven but it seems likely that that is going to change whereas I think with residential we all know what the roadmap looks like and it can be planned for whereas with commercial and industrial it's likely that's not going to happen but what the roadmap is I don't think anybody knows yet but that's what I was going to say. Thank you. Thank you. Could I ask Milo, have you any comments you want to make from the BCPP point of view? Yeah, brilliant. Thank you, Chair. I'll start perhaps by just responding to Councillor Potter's comments and then I'll touch on a couple of the other things brought out in the paper. So firstly in relation to I guess building sustainability and future regulations around building controls. I'll draw the distinction between the global proposition which is a fund of funds so we are picking the underlying managers and the UK real estate proposition where we advised by a third party investment manager but we are making that ultimate decision on which properties to hold. On the global, that incorporation of I guess a sustainable approach to property management comes through in our assessment of the managers that we deploy investments with. So we're currently going through due diligence of CBRE's approach because we will be-- the expected plan is that CBRE assets will transfer over to border to coast but then equally carrying out due diligence of any new managers that we invest with to ensure that that is taken into account in their investment process. On the UK side of things, there are two key accreditations that we will look at, one which is called BRIM and a second called GRESB which ultimately measures the sustainability of a building but also the overall building quality as well. We are taking on a portfolio of-- [ Pause ] -- where we've carried out that due diligence as well as wider environmental surveys and then any new properties that we look at are focused in high quality, core dominant locations with very high quality GRESB and BRIM ratings which are kind of industry recognized for those sustainability characteristics. So that's in terms of how we'll incorporate that into our investment process. In terms of some of the other themes brought out in the review, so-- yeah, on global real estate, the launch is kind of two stages. So the partner funds that are fortunate to already have some exposure to global real estate, those existing holdings will transfer in as has been mentioned about from this point probably 12 to 18 months time. Partner funds that want to or have indicated to us that they want to invest additional capital into global real estate, we're in the process of deploying that now. We have made one investment in the fund that SORI have committed to. There are five investments that are in the pipeline for the next 12 to 18 months to take us up to that fully committed position and then we will take over the existing assets with CBRE as well, subject to due diligence. On UK real estate, just a very brief update. Yeah, we are working towards a launch date of 1st of October for that fund. That is very much a live topic as things currently stand as you would imagine. And the existing properties will transfer over the first six months and we will expect to open up for new investment from SORI and the other partner funds from 1st of April next year. Thank you. So-- could I just clarify the 12 to 18 month time scale for the-- I think it was the global fund you mentioned. Is that an expected time for full investment or, you know, you'll be sort of making manager decisions up to 12, 18 months and then the sort of the drawdowns investment might take longer? That's to get to full investment, yeah. So, the vehicles that we're looking at, not by way of how we screened them necessarily but we would expect to be able to deploy capital with them pretty quickly. They're open-ended vehicles as opposed to kind of closed-ended vehicle. Thank you. Thank you. That's it. Thank you. Thank you indeed. So, I'm going to move to recommendations. We're asked to note the fund's real estate holdings, respective fund's investment performance and review from the fund's independent investment advisor. Is that agreed? Agreed. Thank you. Item 15 is investment consultant updates. It's being introduced by Lloyd. I should point out that our investment advisor is in the room and clearly if we do need to-- if the committee desires to discuss that in detail, then we will need to move into part two in its entirety as I'm sure we understand. So, Lloyd, over to you, page 421. Yes, thank you, Chair. As some members may recall, Mercer were appointed three years ago and the initial contract was three years and then with an option for another two years and we've reached that period now at three years. And so, the recommendation is to extend and use that option for two years on the basis of the knowledge of the fund as we move through the next evaluation as well. The scoring of Mercer through the CMA reviews that we do each December and on the basis that the committee reviewed the objectives and criteria at the last meeting and with those changes, they were accepted and the recommendation is to exercise that option. Is that agreed? Agreed. Thank you very much. You're in for another term, Steve. Thank you. Good luck. Right, thank you. So, item 16 is recent developments in the LGPS. Neil, you're taking this. I think we have Sandy online if there's anything. Yeah, as ever-- thank you, Chair. As ever, if you've got any technical questions, Sandy Armstrong, our technical manager is on hand to field them. I just really wanted to highlight the first item which is the government's pension review. You'll be aware that they've issued a terms of reference for this pension review and have subsequently issued a call for reference which I shared with you on Tuesday. They issued that last Thursday. It has a response date of the 25th of September, so not a huge amount of time to respond to that call for evidence. And we are working with our pooling partners in Board of the Ghost and also independently and we will be sharing a response with senior stake-- yeah, we will be expecting to respond to that. The call for evidence concentrates on 10 questions which are broadly connected to three categories. The first being scale and further consolidation. It's unclear whether they mean funds, pools or both. The second is-- and I think we will welcome this-- the question of cost versus value. And the third which is perhaps the predominant feature of this review is the scope for investing more in the UK. Regarding the direct relevance to the LGPS, the government are asking this question on whether or not we consider LGPS pooling to be a success and that is both from the point of view of whether we've benefited from improved risk of returns but also whether or not pooling has enabled us to access a wider range of asset classes or opportunities. The second question it raises is what, if any, opportunities there may be for further consolidation particularly with the lens on whether this would enable further investment in the UK. And staying on the UK, the third challenge is whether or not we would benefit as an industry from further incentives from the government regarding investment in the UK. So more carrot, less stick. So as I say, we'll be responding to all of that by the deadline. I can say in other forms of consultation, I listened to the statement by the Pensions Minister yesterday and it's very clear that the Department of Work and Pensions Treasury and Ministry of Housing, local government are aligned on this question. There will be-- there have already been invitations to different tranches of funds. We await our invitation but we expect to be invited to speak to the minister. There have also been-- there will also be meetings next week between the minister and the pools. And I further understand that there's an invitation that will be coming out imminently for pools to enable a consolidated view of their partner funds to be received. There is an engagement session on October the 14th for pension fund committee chairs and accompanied by the officers. And I think one is struck by the speed in which the government is approaching this. I would be very surprised if we don't have something to report by the end of the year and one would expect the budget to be a target date. Happy to take any questions on that. David. Yeah, on your third point, I hope your answer will be subject to our fiduciary duties. Absolutely. I mean, it needs to be consistent with what we need to deliver for our members and our employers, all of this. When I said that, is there was a hint of they want to use the government pension fund to fund what I would regard as interesting new ideas. That's what I'm concerned about. I think it's-- there's clearly an issue from government in, you know, how much of the world equity markets is UK. Not 6% or so, so-- and that's-- and a lot of that is overseas in itself. So this is a challenge the government has, but we will have-- if we manage it, we'll have a broad set of investments necessarily on the world stage. Thank you. Any further comments or questions? Clearly, we'll share the letter with members of the board and the committee. Any other items members want to question? No? So, can I ask you to note the content of the report? Thank you. Right. Moving on to investment benchmarking, I'd like to welcome two representatives from CEM Benchmarking, thank them for attending. We did look at this last year, that was the first occasion. So, be useful to see what changes have been made since last year. So, Lloyd, you're introducing this item. Can I say there's a detailed report and a summary report? If we need to go into the detailed report, and clearly if members want to, that's perfectly acceptable, we will need to move into part two of the report. Of the agenda, thank you. Thanks, Chair. As our guests have waited so patiently, I think I'll pass straight to Fleur. Good afternoon all. Thank you very much, Chair, and thank you all members having us here today to present. And you're absolutely right, Chair. We did present this for the first time last year, and I'm very hopeful that Tom, perhaps next year will do a presentation both on the investment report and the pension admin report. But with your permission, I'd like to share my screen. I think it might be a little bit easier to going through the short summary presentation this morning, but this would help if it would work. Okay. For those of you who don't know myself, my name is Fleur, double rule, and I'm joined here by my colleague, Joao, who has worked on the Surrey pension fund report for the last couple of years while we've published the annual benchmarking report to you. For those of you who don't know CEM Benchmarking, we are a global benchmarking firm providing investment and pension admin benchmark funds across the world. I don't know why the scroll isn't working, but we've done this for about approximately 30 years. Our 30-year anniversary is two years ago. We serve more than 20 countries across the globe, and we tend to skew large, and this holds true for the LGPS group as well, which I think is probably the group that you're most interested in. Last year, we worked with 36 of the LGPS funds, and this has been broadly stable, and we expect that to be the same for this year. Mel is very aware that we're in the depths of doing the exercise for the year ending 31st of March, 20 report as well as the longer length report in your full reporting deck. I'm hopeful that we will get the report into you a little bit earlier this year. This is somewhat dependent on your peers getting in with their final data as well and then providing the analysis. But I think the important part to note is the LGPS group that we work with, which is just under half, but it does represent nearly 70% of the assets, and again, kind of the trend is that we skew for the funds globally as well as for the LGPS domestic universe. A big quick overview, I know we discussed this in more detail last year, but a reminder why funds benchmark with CEM, the couple of reasons listed on screen. I think an important thing, we're not consultants. We source the data from the funds directly, so these are not figures that are publicly communicated either by the pension funds themselves or the managers themselves. These are actually the facts and figures of what funds are paying for those particular assets and mandates and the returns recorded, and it also identifies opportunities to improve and deliver accountability either to the fund itself, but also in this particular case to the pool. Taking you to the results of the benchmarking report, the year ending 31st of March 2023, I appreciate that that's nearly 18 months ago. We work on an annual cycle, and as I said, we're in the depths of nature. There is always somewhat of a delay once the year has ended to getting in all of the data from the underlying investment managers, and particularly for those private managers, there tends to be quite a lag in getting that information across. When looking at the full investment benchmarking survey, we're looking across four key pillars, cost, performance, risk, and value for money. A key difference to the report you would have seen last year is that we made two kind of changes to the peer group that you compare to. One, we broadened the peer group from 20 peer funds to 37 global peer funds, but we compressed the banner of the funds that you compared with. So the banner of the funds that you compared with, excuse me, are now between 3.7 billion and 9.7 billion. And the reason why we did this is one, we wanted to include a broader global peer group to really answer the question, you know, are the costs we incur reasonable for a fund of our size? And that's kind of closely related to, you know, feeling that there's been fee compression in the domestic market before pooling was formally announced. [ Inaudible Remark ] Again, some of you will remember seeing a very similar slide to this from last year. The observant amongst you have also probably realized that this screenshot shared in this summary report is slightly different to the screenshot that would have been available had you looked at the full report and that's just because we want to make sure that we preserve the anonymity of the data of the benchmarking report. It doesn't change anything in the tail. It's just protecting the anonymity of the underlying mandate level data, which is very important to us and yourselves. And really, the new ones that we want to bring out here is that the investment cost that you incur are mostly driven by your asset mix and your implementation choices. And to give some of the many numbers on the page a little bit of context, the total investment costs for 2023 were 37.8 million which translates to 75.1 basis points which was very similar to the cost incurred the year prior which was 41.1 million or 78.4 basis points in the year prior. The difference between those investments cost year on year can largely be attributed to a drop in performance fees which is not unusual. We saw that too given that the markets had performed less well and some of the performance fees in 2022 really were extraordinary and differential in cost there. I know that there's been several discussions around private markets today and I think that feeds kind of nicely into one of the observations that I'd like to make is that your private market costs account for roughly 70 percent of your total investment cost expensive than similar investments would have been in the public assets. That division of course is not unusual for Surrey Pension Fund. That's kind of something that we can see broadly across the board. I included this slide in here which wasn't included last year because one, I think it's really interesting and two, you know, it's nice to be able to show you something slightly different in some of the ways that our data gets used in looking at kind of wider peer trends and global trends globally. So the kind of doughnut chart on the left hand side shows the CEM average asset mix across our database so that's looking across all of the funds that benchmarked with us in the year 2023 and, you know, something that I think is kind of a relevant observation to make relative to Surrey Pension Fund is that you'll see that the allocation to public equity 31st of March, 2023 with a higher allocation to fixed income by the average asset mix at 35 percent. Interestingly enough, the allocation to private assets is broadly similar but that's the allocation to private assets excluding hedge funds there. Again, relative to the LGPS base, your asset mix is slightly different and your costs are broadly in line with peers. Joe and I were chatting this morning and, you know, I'm always telling him all the things that I think are really interesting and he's like, Yes, I know everything you find interesting is what other people will find interesting. But I think this is an interesting stat if that's, you know, sorry, your fund size is the median fund size of the LGPS funds in our database and your costs are broadly in line with your peers. It really feels like kind of if you were to take a sample fund, you take Surrey kind of straight in the line. So, I thought that was interesting. I hope you found that interesting too. Your costs are very much in line with your peers and this year, you were just above peer benchmark costs and where last year you were 1.3 basis points above benchmark cost. Once you start sitting very close to that peer benchmark cost, you'll see the kind of any fluctuations in costs and feel to have more magnitude because you might end up either just above the peer benchmark cost or just below the peer benchmark costs. And high use of passive management was a cost saving. I know that you've already spoken about several of your kind of passive investments earlier today but relative to your peer group, that saved you nearly 5 basis points. And that higher passive investment from the peers is kind of offset by your high use of funder funds. And again, that was something that came alight in some of the discussions this morning for your private assets program there. And I think what is interesting about that the passive investment is at that line cost and headline performance figures. Can I ask a question? Of course. Just in terms of classification, when you're referring to like funder funds, do you include the border to coast market assets? So, what we mean when we talk about funder fund classification, that's a really good question. In light of border to coast, there's kind of two important things to say. One, any assets that are managed internally by border to coast, we would still classify as internal even though it's not engaged internally by, sorry, pension fund but they're benefiting from the pool. But where border to coast have chosen to use in the private assets space and where they would have gone through a funder fund vehicle, that would have been classified as a funder fund investment rather than funder fund investment. If you're looking at the screen above, it would still come under the line of less evergreen, more LP and funder fund investment. [Inaudible] Yes. So, I'm just trying to get my work out, you said, for a sorry, overall allocation to private markets is lower than average? It's about, it's on par with the global average but a bit lower than the LGPS average. I was kind of expecting if the allocation to private markets was lower than average. [ Music ] I don't know if that's related or unrelated to the far long. Yes, so sorry, in terms of the fees, is the peer group benchmark global or LGPS? So, the peer group benchmark reference here is global. It's your whole group but it's not the whole banner. Okay. May I just add one thing here just to clarify, sorry. So, the peer group is basically, is adjusted to reflect sorry's asset mix. So, if sorry is slightly less private market staff assets, those will be reflected on a peer benchmark because you got to, what a benchmark does is what would happen if you give your assets to your peer group. And so, if your peer group were managing your assets so much they will be paying to manage your assets. So, the peer group has roughly the same allocation, asset allocation. Is that what you're saying? They do, they do on this case, yes. But imagine this case that sorry has 10% of private markets and your peer group has 15. What it essentially does is, is how much are your peers paying for those private markets and that's the cost that will apply for those 10% that's sorry. So, it's just the peer's asset mix to reflect sorry's asset mix. [ Inaudible Remark ] That's right. I was maybe at the end of this page so that it was a well-timed question and I think the other important and really what I've tried to do here in this really short snapshot is give a feel for kind of the broad story and the other important pair with the wider CEM database and how does that kind of sit in with the LGPS cost. I know that Neil you've shared this or referenced this table before so I know that I'm not the only person that has found it interesting. But this is kind of a broader comparison of total costs for that year ending 31st of March 2023 and how do the LGPS's cost as a whole for the funds that benchmark with us compare to the global peers, the European Publix, the US Publix and then the Canadian Publix. And what I will say for European Publix and I think this is a really important point to make is that they operate at different scale to the LGPS fund so this would include, you know, the funds such as ADP and PFSW that are many scales and larger and skewed towards fixed income assets as well which again will have a slightly different cost profile. But I think, you know, it's a positive thing to say. I was very interested in this because it showed us that we're not performing as well as some other of our peers so I think what we've seen so far has been good. But if you could move on to the next one please. Sure. So this is kind of talking about the position relative to peers and this is showing the slightly longer three-year view. I'm just going to keep going. So this is giving you the three-year view and the net value added here is very simply the total net return minus the benchmark return i.e. what would have been achieved had all of the assets been implemented in accordance with its bench view, your strategic assets allocation which is an important nuance to make. The net value added over that three-year period was 0.3 percent which was below the median allocation to passive fund where your return will be tracking the benchmark and indeed for those interested the net total return and the benchmark return for the year ending 31st of March 2012 specific year period there. Having said that, the net value added is still a positive value added and that's an important takeaway because that's added approximately to the page that people are most interested in but I'm very happy to take any questions on this summary report or indeed the more detailed reports. Members. Vice-Chairman. Yeah. I'm going to ask the obvious question which is in relation to this graph which is noting that there are some people who are performing much better. Are there any particular characteristics that pick them out as to why they are actually performing better? Sure. You know, without kind of giving specific advice, I can talk to kind of some of the characteristics here. One observation to make is any of the blobs in white are the global funds so this will include funds that operate under one, a different regulatory environment and two, they may operate at a very different scale and asset mix. More broadly though, if we look at the funds that have performed well and if you're interested, very happy to share a piece of research we published a couple of years ago, your investments perhaps being internal where possible or doing direct investment. I know there was an earlier question on the use of fund-to-fund and their value added. Any other questions from members or our advisors? No? Just one quick one. On page 441, question for clarification part of the-- it looks here as if the non-pooled private assets are significantly less expensive than the pooled ones and so the question was what's the definition of pooled is. Okay, because some of those look really quite remarkably higher, private equity, 1.5 percent for outside and 4.8 percent. The main reason for that would be is because-- Thank you, very, very, very pertinent question, thank you. Members, any comments or questions? No? So thank you very much and we're asked to note the content of the report by CEM Benchmarking. I certainly would in future years like to understand a bit more about the value added elements, so thank you very much. So we are going to go into part two, so under section 100A of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involved the likely disclosure of exempt information under the relevant paragraphs of part one of schedule 12A of the act. Is that agreed? Agreed.
• Great.