The meeting of the Pensions Committee included the presentation of an investment cost benchmarking exercise from CEM Benchmarking Ltd, an audit results report from KPMG and a report on breaches of law.

Staffordshire Pension Fund Investment Cost Benchmarking 2023/24

The Committee will be asked to note the Staffordshire Pension Fund’s (the Fund) participation in the 2023/24 CEM Benchmarking survey. The report, which benchmarks the Fund against 40 global peer funds ranging in size from £4.8bn to £11bn, showed that the Fund’s investment management costs were competitive:

Despite making significant changes to the asset structure of the Fund over the past few years, including allocating significantly more assets to more expensive private market asset classes, the Fund has been able to maintain investment management costs at a competitive level and demonstrate value for money to stakeholders in the Fund.

(Agenda Item 5 20 December 2024 CEM Investment Benchmarking 2023-24)

Staffordshire Pension Fund Audit report 2023/24

KPMG, the external auditors of both the Fund and Staffordshire County Council, will present their audit results report (ISA260¹) on the Fund’s 2023/24 accounts. The report found that the Fund’s accounts for 2023/24 should be given an unqualified audit opinion.

The report also provided an update on the audit of the 2021/22 and 2022/23 accounts, which were subject to delays. The previous auditors, Ernst and Young, had now issued their audit opinions for both sets of accounts and confirmed the Fund had received an unqualified audit opinion for both years.

Staffordshire Pension Fund - Breaches of the Law Policy

The Committee will be asked to approve a revised Breaches of the Law Policy. A review of the previous policy, which was informed by the introduction of the Pensions Regulator’s new General Code of Practice, found that no significant changes were required. The key elements of the revised policy include:

• defining a breach
• providing clarity on who must report a breach
• judging whether a breach would be considered material to the Pensions Regulator; and
• the process of reporting a breach to the Pensions Regulator.

The report identifies an ongoing need to monitor the receipt of data from Scheme employers, as well as embedding the Breaches Log into the day-to-day working practices of the Administration Team.

LGPS: Fit for the Future - Draft Consultation Response

The Committee will be asked to note the Fund’s draft response to the Department for Levelling Up, Housing and Communities consultation on the Local Government Pension Scheme (England and Wales): Fit for the future.

The consultation, which follows on from the Chancellor’s Pensions Investment Review, aims to boost investment, increase pension pots and tackle waste in the pensions system. The proposals seek to strengthen the management of LGPS investments in 3 areas:

• reforming the LGPS asset pools
• boosting LGPS investment in their localities and regions in the UK
• strengthening the governance of both LGPS AAs and LGPS pools.

Due to the short consultation timescales, the final response will be approved by the Director of Finance, in consultation with the Chair of the Pensions Committee, prior to submission by the deadline of 16 January 2025.