The Teesside Pension Fund Committee meeting on 12 June 2024 covered a range of topics, including updates on local investments, investment activities, external managers' reports, and the new Pensions Regulator General Code of Practice. Key decisions included the approval of a new investment and the Pension Fund Business Plan for 2024/27.

Local Investment Update

The Head of Pensions Governance and Investments presented a report on local investments. The committee agreed to an investment as detailed in paragraph 2.1 of the report.

Investment Activity Report

A report from the Director of Finance detailed the implementation of investment advisors' recommendations and the Fund's valuation. The Fund continued to favour growth assets over protection assets, with no investments in bonds at this time. The cash level at the end of December 2023 was 4.27%. The Fund invested £49 million in alternatives such as infrastructure and private equity during the quarter. The total value of all investments, including cash, was £5,194 million as of 31 December 2023. The detailed valuation is available in Appendix C.

External Managers' Reports

The Interim Director of Finance presented quarterly investment reports for funds invested with Border to Coast Pensions Partnership Limited (Border to Coast) and State Street Global Advisers (State Street). The Border to Coast UK Listed Equity Fund’s returns were 0.68% below benchmark over the last year, while the Overseas Developed Markets Equity Fund achieved returns of 2.07% above benchmark. The State Street report showed performance closely matched the respective indices. Additional information on environmental, social, and governance factors was included in the report. The full reports can be found in Appendix A and Appendix B.

Pensions Regulator General Code of Practice

A report on the Pensions Regulator’s General Code of Practice, expected to come into force on 27 March 2024, was presented. The General Code consolidates ten existing codes into a single document. The Local Government Association (LGA) and LGPS Scheme Advisory Board (SAB) provided initial comments, which were included in the report. The Fund is working towards full compliance with the new code. The full compliance assessment is available here.

Pension Fund Business Plan 2024-27

The Pension Fund Business Plan for 2024/27, including the 2024/25 Pension Fund Budget, was presented and approved. The Business Plan outlines the operation of the Pension Fund Committee, governance arrangements, performance targets, and risk management. The full Business Plan is attached in Appendix 1.

Border to Coast Presentation

The Committee received a presentation on the Fund’s investments with Border to Coast, covering market overview, responsible investment approach, and strategic plans for 2024-2027. The presentation highlighted the publication of the 2024 Responsible Investment Policy and the launch of two new Real Estate funds. The full presentation is available here.

Investment Advisors' Reports

Independent Investment Advisors provided reports on current capital market conditions, recommending a strategic focus on assets that mitigate long-term inflation risk. The full reports are available in Appendix A and Appendix B.

CBRE Property Report

A report from CBRE provided an overview of the current property market and individual property transactions. The report noted optimism in the property market despite a technical recession in Q3 2023. The refurbishment of the Old Brompton Road property was 75% completed. The full report is available here.

XPS Pensions Administration Report

XPS Administration provided an overview of administration services, highlighting an increase in membership and a significant rise in processed cases. The report also noted a 6.7% increase in public service pensions and career average benefits within the LGPS from 1 April 2024. The full report is available here.

WasteKnot Energy Visit

The Head of Pensions Governance and Investments provided a verbal update on a recent visit to WasteKnot, showing photographs of the energy-to-waste plant. The Fund is expected to receive the promised return on its investment once the plant is running at full capacity.

Teesside Pension Fund Audits 2021/2022 and 2022/2023

The External Auditor provided an update on the status of the Teesside Pension Fund Audit and the reset of local government audit timelines. The 2021/2022 audit is expected to be finalised within the next month, with the 2022/2023 audit procedures to be completed by the end of the month.