The Board approved a set of recommendations, to be put before the Pension Committee, regarding the treatment of Guaranteed Minimum Pensions ¹. It noted several reports on the performance of the Fund's administration, approved the Internal Audit Plan, noted a benchmarking report, and received an update on the Government's proposed changes to the Local Government Pension Scheme.

Government Consultation on the LGPS

Liz Woodyard, the Group Manager for Funding, Investment & Risk, explained that the Government is consulting on changes to the LGPS that would, ...embed pooling and extends the role of the FCA regulated pool company in managing our assets. She described the proposals as, ...highly material , covering the areas of pooling, local investment, and governance.

Speaking on behalf of the Fund, she said, We do not agree that administering authorities should be required to transfer legacy illiquid investments to the management of the pool as it has not been made clear the benefit to the pool company or the AA of transferring illiquid, closed ended funds being wound down to expiry. We do not agree that the pool should provide investment advice on the investment strategies of its partner AAs as conflicts of interest may arise if pools provide strategic advice and implement the strategy.

GMP Reconciliation

The Pensions Operations Manager gave a presentation on the results of the APF GMP Reconciliation Summary. The summary describes the outcome of a data matching exercise comparing the Fund's records with those provided by HMRC.

The reconciliation identified 6,468 members for whom HMRC's data and the Fund's data do not agree. Of those, 816 were found to be receiving a pension that was higher than their entitlement and 277 a pension that was lower than their entitlement. The presentation recommended accepting HMRC's data as correct for members who have not yet reached State Pension Age and making adjustments to the pensions of those who have, correcting underpayments and freezing overpayments.

The Board voted to approve this recommendation.

Internal Audit

The Head of Audit & Assurance introduced a report providing an update on recent Internal Audits. The audits covered the areas of Pensions Payroll, Pension Increases, the Scheme of Delegation, and Year End Processes.

The Pensions Payroll Audit gave the Pension Payroll team a rating of Substantial Assurance , the highest rating achievable in an internal audit. The Chair described the performance of the Payroll team as, ...phenomenal...

The Pension Increases Audit gave the Pension Increase team a rating of Reasonable Assurance . It found that there are, ...adequate controls within the annual pension increase process to ensure that increases are being paid accurately and timely to pensioners. It went on to acknowledge that, ...the Quality Assurance team are still progressing 400+ cases and it is expected that all cases should be resolved by the end of December 2024.

The APF Scheme of Delegation Audit also gave a rating of Reasonable Assurance . It made a number of recommendations for improvements to the Scheme's documentation and suggested that contingency arrangements be put in place for when authorised officers are not available.

The APF Year End Processes Audit also gave a rating of Reasonable Assurance . It made a number of recommendations, primarily about the accuracy and completeness of the Fund's data. It also raised concerns about the i-Connect system used by employers to provide data.

The report requested that the Board consider items to be added to the Internal Audit plan for 2025/26. It also stated that, ...External Audit they have completed their audit of the Avon Pension Fund Accounts and the VFM review and the findings report is attached at Appendix 5. These have already been reviewed and approved by the Council’s Audit Committee and are attached for information.

The Board voted to approve the Internal Audit Update report.

Pension Fund Administration

The Pension Fund Administration report provided an update on the performance of the Pension Fund's administration. Councillor Harman praised the team responsible for the improvements in performance. The report stated that 90% of the Service Level Agreement (SLA) targets had been achieved, ahead of the year's target of 65%.

The Head of Pensions acknowledged these successes but sounded a note of caution, warning that ...some resources will be diverted in 2025.

Other Business

The Board noted a benchmarking report that compared the costs and performance of the Avon Pension Fund with similar sized funds. The report found that the Avon Pension Fund is performing well on several key metrics, including administration costs per member and the percentage of members still contributing to the Fund.

The Board also noted a report detailing the regulatory and data breaches that had occurred during the year. There were 27 reported data breaches in the period, although none were serious enough to be reported to the Information Commissioner's Office. There were 25 reported incidents of employers making late payments.

Finally, the Board noted a report providing an update on the Fund's Risk Register. The report identified the Fund's top three risks as cyber attacks, poor service levels, and failure to manage personal data in accordance with regulations.