The Pension Fund Committee approved the draft City and County of Swansea Pension Fund Annual Report and Statement of Accounts for 2025-26, and also approved the exclusion of the public for certain agenda items. The committee received updates on the Welsh Pension Partnership and the Breaches Report.

Draft City and County of Swansea Pension Fund Annual Report and Statement of Accounts 2025-26

The committee approved the draft City and County of Swansea Pension Fund Annual Report and Statement of Accounts for the 2025-26 financial year, subject to audit. Jenny Han-nguyen, who introduced the report, highlighted that the accounts were currently advertised for public inspection. She noted an increase in contributors and deferred members, bringing the total membership to around 51,000. The fund account showed a net cash flow deficit of £0.9 million, which was not unusual for an LGPS fund, underscoring the importance of investment income. Management expenses, largely comprising investment management fees, were noted as 0.36% of assets under management. The net asset statement showed an increase of £366 million, primarily due to strong investment performance.

Unknown, an actuary from Unknown, presented an update on the fund's funding level, which had increased from 122% at the 31 March 2025 valuation to 138% at the end of June 2026. This increase was attributed to strong asset returns and a slight revision to actuarial assumptions. He explained that while the current surplus could mechanically reduce employer contributions, this was not a recommendation for immediate action, but rather an illustration of the fund's strong financial health.

Regarding investment performance, the fund delivered a return of 11.7%, outperforming the LGPS universe average of 9.6%. Over longer periods, the fund ranked first over five years and second over ten years. Councillor Will Thomas raised a question about management fees in comparison to pre-pooling costs, but this information was not available. It was clarified that the performance and fees in the 2025-26 period were largely attributable to the fund's own strategy and managers, as the Welsh Pension Partnership (WPP) had only recently received FCA authorisation. Councillor Mike Lewis confirmed that pooling had resulted in significant cost savings, although specific pre-pooling data was not available.

Breaches Report

Michelle King presented the Breaches Report, stating that there had been no breaches requiring reporting to the Pensions Regulator. However, there was one instance of a GDPR breach due to human error in pensions administration. This involved bank details being handled inappropriately, leading to the implementation of encrypted emails for sensitive communications. Two instances of breaches related to Regulation 67 and 69 of the LGPS Act 2013 concerning late employer contributions were also reported. Treasury Management staff had written to the employers in question to remind them of their responsibilities.

Welsh Pension Partnership (WPP) Update

The committee received an update on the Welsh Pension Partnership (WPP). The report detailed the WPP's governance structure, including the Joint Governance Committee (JGC) and the Operational Working Group (OWG). It highlighted that 82% of assets were under pool management, with a total of £23.5 billion managed by the WPP as of 31 March 2026. The report also outlined the pooling costs, with Swansea Pension Fund's recharge for the financial year ending 31 March 2026 being £272k. Investment management costs were detailed, showing a total of £32.691 million across pooled and non-pooled arrangements. The WPP had won LGC and LAPF Investment Innovation awards for its approach to local impact investing.

Investment Monitoring Report - Quarter 2 2026/27

This report was presented for information only.

Exclusion of the Public

The committee approved the exclusion of the public from the meeting for subsequent agenda items, citing the likely disclosure of exempt information under Schedule 12A of the Local Government Act 1972. The rationale for exclusion was detailed in the report, with the public interest test considered where applicable.

Appointment of the Independent Person

The committee approved the appointment of an Independent Person.

Disclosures of Personal and Prejudicial Interests

Several councillors declared personal interests in the agenda as a whole.

Minutes

The minutes from the previous meeting were approved.