The Dumfries and Galloway Council Pensions Sub-Committee met on 05 December 2024 and agreed to a new Governance Policy Statement for the Pension Fund, noted an Internal Audit report and received an update on the Pension Fund. The Pension Board, which met during the meeting, disagreed with the Sub-Committee's decision on the new Governance Policy Statement, and will be making representations to the Sub-Committee.

Pension Fund Governance Policy Statement

The Sub-Committee agreed to adopt a new Governance Policy Statement for the Pension Fund.

The new policy sets out the framework for the governance of the Fund, based on the CIPFA¹ guidance on the governance of local government pension schemes in the UK. This guidance is based on seven principles of public life, which are:

• Selflessness
• Integrity
• Objectivity
• Accountability
• Openness
• Honesty
• Leadership

The Sub-Committee discussed the new policy, and agreed that it was a positive step forward for the governance of the Fund.

Members were content that this document now accurately reflected the work of the Fund.

The Pension Board, which met during the meeting, disagreed with the Sub-Committee's decision to adopt the new policy. They will be making representations to the Sub-Committee on their reasons for disagreeing.

The Sub-Committee also agreed to update the Pension Board Constitution to align with the new policy, and to review the Scheme of Administration and Delegation to Committees to ensure that it is consistent with the new policy.

Internal Audit Report on Governance and Risk Management

The Sub-Committee noted an Internal Audit report on the governance and risk management of the Pension Fund.

The report identified some areas for improvement, including:

• The need for a more robust risk management framework.
• The need for improved communication between the Sub-Committee and the Pension Board.
• The need for more training for members of the Sub-Committee and the Pension Board.

The Sub-Committee agreed to consider the recommendations of the report and to develop an action plan to address the areas for improvement.

Pension Fund Update and Emerging Issues

The Sub-Committee received a report on the Pension Fund, which included an update on the Fund's investment strategy and a summary of emerging issues.

The report noted that the Fund had performed well in the previous quarter, but that there were a number of risks to the Fund's long-term sustainability, including:

• The increasing life expectancy of members.
• The low interest rate environment.
• The uncertainty surrounding the future of the UK economy.

The Sub-Committee discussed these risks and agreed to continue to monitor the situation closely. The Sub-Committee also noted that the Fund would be undertaking a review of its investment strategy in the coming year.

Other Matters

The Sub-Committee also:

• Noted the Pension Fund Risk Register.
• Noted an update on the Local Government Pension Scheme.
• Noted the Annual Training Plan and Record of Training Update.
• Received a presentation from Fund Manager Columbia Threadneedle on their current investment strategy.