This meeting was scheduled to discuss a range of reports about the activity of the Lothian Pension Fund, including a quarterly governance update, an internal audit progress report, an employer performance and data quality report, and an investment income review. Also included for discussion were reports on business continuity management and a proposed risk appetite statement.

The most significant item on the agenda was the report on the Lothian Pension Fund's (LPF) Risk Appetite Statement.

LPF Risk Appetite Statement

This report included a proposal for a new Risk Appetite Statement. The most recent actuarial valuation, in 2023, showed that LPF was 157% funded.

Lothian Pension Fund (LPF) administers the Local Government Pension Scheme (LGPS) in Edinburgh and the Lothians. LPF is an asset-backed and multi-employer scheme with around £10 billion of assets and the second largest LGPS fund in Scotland, serving over 93,000 members and 57 contributing employers.

LPFE and LPFI were established within the LPF group (Group) to facilitate activities and provide services in the most efficient way to administer the pension fund and leverage in-house investment management operations and to deliver investment and advisory services for like-minded LGPS clients.

LPFI is authorised by the FCA (Financial Conduct Authority) to deliver these investment services which enables part of our core strategy regarding collaboration with other LGPS funds.

Lothian Pension Fund Risk Appetite Statement - November 2024

The Pensions Committee has overall accountability for the Risk Appetite Statement, while on a practical basis, the LPF Risk Management Committee will monitor it.

The report categorises the fund's appetite for risk in the following areas:

• Information Security, IT & Data
• Governance, Legal & Compliance
• Business Operations
• People & Culture
• Financial
• Conduct
• Model
• Investment Management
• Strategic
• Scheme

Quarterly Governance Report

The meeting was also scheduled to receive an update on the Corporate Governance of the Fund. The report provided an update on the ongoing Governance Improvements at LPF, including an update on training undertaken by members. It was noted that

In the context of the Scottish sector, it was acknowledged that the pool of candidates was somewhat limited due to eligibility of candidates and representatives would be required to commit appropriate time.

Pensions Audit Sub Committee Draft Minute - 20240924 v2

The report also proposed a series of Knowledge and Development principles to be adopted by the committee.

Internal Audit Progress Report

The meeting was scheduled to receive an update from the Internal Auditor. This included an update on outstanding management actions from the 2022/23 internal audit plan.

Also included was a summary of an Internal Audit review of Business Continuity and Incident Response. The report noted that

International Standards are recognised internationally across all business sectors providing assurance and confidence to stakeholders. ISO 22301 will support LPF to meet its regulatory requirements and is specifically recommended by The Pensions Regulator. Internal Audit recommends adopting the Standard and used it as a benchmark to conduct the audit.

BCM Report for PASC

Employer Performance and Data Quality Report

The meeting was scheduled to receive an update on Employer Performance and Data Quality. This included an assessment of the performance of the administration of the fund against the Pensions Administration Strategy. Data quality is assessed using a system called Insights supplied by Heywood Pension Technologies.

Investment Income Review Cross Border Withholding Tax and EU Tax Recoveries

The meeting was scheduled to receive a report providing an update on Withholding Tax Reclaims.

The total value of tax reclaims submitted for 2023/24 was £31,078,865.22

Investment Income Review Cross Border Withholding Tax and EU Tax Recoveries

This included details of tax reclaims for both the Lothian Pension Fund, and the Scottish Homes Pension Fund, which LPF also administers.