The Kent County Council Pension Board meeting on 11 June 2024 covered several significant updates and decisions, including the implementation of a revised investment strategy, the adoption of a Digital by Default communication policy, and changes to the Fund's Training Strategy.

Revised Investment Strategy

Mr. C Simkins, Chairman of the Pension Fund Committee, provided an update on the Committee's recent activities, including the implementation of a revised investment strategy. The strategy includes the creation of an index-linked gilts portfolio, which now accounts for 7% of the Fund. Additionally, there has been a shift in assets from UK equity to emerging market equity, reducing UK equities from 23% to 10%. The Committee also set a 2050 Net Zero target for the Fund's investment portfolio, aiming for a 43% reduction in emissions by 2030 and a 69% reduction by 2040. The Committee will further consider emerging market equities and private equity investment at its next meeting on 26 March 2024.

Governance Updates and Draft Business Plan

Mr. N Buckland introduced the Governance Update and the Fund’s draft Business Plan for 2024/25 - 2026/27. The plan outlines the Fund’s vision, governance, administration, and investment priorities. Mr. Buckland assured that the Fund’s risk register would be reported at the next meeting. He also mentioned the minimal expected impact of the Economic Activities of Public Bodies (Overseas Matters) Bill on the Fund, which will be further assessed.

Communication Policy

Mrs. A Jupp presented the proposed changes to the Fund’s communication policy, reflecting a move to Digital by Default . This change means that future Annual Benefit Illustrations (ABI) will be published on member self-service rather than sent as hard copies. Active members will receive their 2024 ABI electronically, while deferred members will receive their final digital notification with the 2024 ABI, and the 2025 ABI will be issued electronically. Approximately 60 out of over 170,000 members have opted out of this digital approach.

Member Training

Mrs. E Green discussed updates to the Fund’s Training Strategy, which now includes clarity on training expectations and the consequences of non-compliance. The strategy will be presented to the Pension Fund Committee for approval. Concentrated training for new members following the May 2025 local election will be prioritised to ensure adequate understanding of responsibilities.

Pensions Administration

Mrs. C Chambers provided an update on the administration of the Kent Pension Fund, highlighting improvements in performance and technological developments, including a new telephony system and member self-service. Training has been organised to understand the implications of the abolition of the lifetime allowance.

Employer Governance

Mr. S Tagg reported on Fund employers and the actuarial procurement project. Barnett Waddingham has been reappointed as the Fund actuary for six years, with a possible three-year extension. The report also noted strong performance in the timely receipt of contributions.

Investment Update

Mr. J Graham provided an Investment Update, noting that the Fund’s value was £7.84bn as of 31 January 2024. The Fund returned 1.42% in the three months to 31 December 2023, compared to a benchmark return of 3.05%. The Committee has approved an updated Investment Strategy Statement and considered responsible investment, including the implications of climate change on risk management.

CEM Benchmarking

David Jennings and John Simmonds from CEM presented the findings of their benchmarking assessment of Kent Pension Fund’s administration services. The presentation highlighted the adoption of best practices from other high-performing funds and the importance of external assurance.

ACCESS Pool

Mr. Graham summarised the activities of the ACCESS pool, including business transacted at the Joint Committee’s 4 March meeting.

McCloud

Mrs. Green updated the Board on the measures in place for the McCloud data rectification project and the progress made in obtaining data from scheme employers.

Cyber Security

Mrs. Green also provided an update on the cyber security work being undertaken by the Fund.