The Dyfed Pension Fund Board met on Wednesday 29 July 2026 to discuss the audit plan, budget monitoring, and the Wales Pension Partnership (WPP) update. Key decisions included the approval of the audit plan for 2026 and the adoption of Option B for the strategic asset allocation review.

Audit Plan 2026

The Board received the Audit Plan for 2026 from Audit Wales, presented by Jason Blewitt, Audit Manager. The plan outlined the proposed scope, materiality levels, timescales, fee, and audit team. A key new risk identified for this year's audit is related to the investment pooling arrangements concerning the new Wales Pension Partnership Investment Management Company (WPP IMCo). The audit is expected to conclude by October 2026, with an estimated fee of £41,083, representing a 5.1% increase. The Committee approved the Audit Plan 2026.

Budget Monitoring and Cash Position as at 31 March 2026

Martin Owens, Pension Investment Officer, presented the final budgetary and cash positions for the Dyfed Pension Fund as at 31 March 2026. The Fund reported an overall underspend of £8.5 million compared to the budget. Total expenditure was £145.9 million, and total income was £154.4 million. The cash position held by Carmarthenshire County Council on behalf of the Fund was £12.6 million, intended for immediate cash flow requirements. The Committee received this report.

Wales Pension Partnership (WPP) Update

Chris Moore, Director of Corporate Services, provided an update on the Wales Pension Partnership (WPP). He detailed the progress in establishing the WPP Investment Management Company (IMCo), which was awaiting final authorisation from the Financial Conduct Authority (FCA). The IMCo had received regulatory capital and had its articles of association approved. The plan was for the IMCo to become fully operational from September, with a phased transfer of assets. The Board noted the update on the WPP, including the Joint Governance Committee (JGC) update and the Responsible Investment (RI) update.

Rebalance Proposal

The Committee received a report on a proposal to rebalance the Fund's investment portfolio due to an overweight position in equities. As of 31 March 2026, equities represented 68.8% of the Fund's assets, projected to reach 70.9% by June 2026, exceeding the agreed tolerance range. The proposal recommended selling 4% of equities (£170 million) to invest 3% (£130 million) in WPP Global Credit and retain 1% (£40 million) in cash. This rebalance aims to reduce equity risk, increase stability through credit allocation, and provide a cash buffer for future capital calls. The Committee approved the rebalance proposal, pending review by the Dyfed Pension Fund Board.

Strategic Asset Allocation (SAA) Review

The Committee reviewed the Strategic Asset Allocation (SAA) following the triennial actuarial valuation. Mercer presented four alternative investment strategies, recommending Option B. This option involves reducing the allocation to equities, property, and other alternatives to introduce a 5% allocation to Index-Linked Gilts and a 0.5% allocation to cash. Option B aims to maintain similar expected returns to the current SAA while reducing risk, increasing income generation, and improving liquidity. The Committee unanimously resolved to approve Option B.

Pension Board Budget Monitoring 1 April 2026 – 30 June 2026

The Board received the Pension Board Budget Monitoring report for the period 1 April 2026 to 30 June 2026. The report indicated an overspend compared to the budget, primarily due to the Chair's annual fee. However, it was noted that underspends in training costs and travel expenses in previous years might offset this overspend. The Board received the report.

Pension Board Work Plan 2026

The Board received the Pension Board Work Plan for 2026, which outlines the planned activities and agenda items for each meeting throughout the year. The Work Plan is subject to review and revision at each Board meeting. The Board noted the plan.

Pension Board Action Log

The Board reviewed the Pension Board Action Log, which details outstanding actions and updates from previous meetings. The log is updated regularly. The Board noted the action log, with a decision to remove completed actions that are no longer relevant.

Exclusion of the Public

The Board resolved to exclude the press and public from the meeting for the remaining agenda items, as they contained exempt information. This decision was made following the application of the public interest test.

Robeco Engagement Report 1 October 2025 - 31 December 2025

The Board received the Robeco Engagement Report, which detailed engagement activities undertaken on the WPP portfolio during the quarter. The report was noted.

Independent Advisor Performance & Risk Report to 31 March 2026

The Committee received the Independent Advisor and Risk report, which provided an analysis of investment managers' performance and the global market background. The report was noted.

Northern Trust Performance Report to 31 March 2026

The Committee received the Northern Trust performance report, which provided performance analysis for the Dyfed Pension Fund at both a total fund and individual investment manager level. The report was noted.