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Pensions Board - Friday 20th December 2024 1:00pm

December 20, 2024 View on council website
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Summary

This meeting will include the Board receiving an update on the work of the Pensions Committee since the last meeting and will consider a report on the work of Internal Audit, including a progress log for previously made recommendations. The Board will also be provided with the notes from a meeting of the Local Pensions Board Chairs for the LGPS Central Pool, which took place on 21 October 2024.

Internal Audit Reports

The Board will receive an update on the Internal Audit's recommendations progress log.

The Board will note the Internal Audit reports covering Governance Arrangements and Pensions Administration for 2023/24.

Resolved – That (a) the Pensions Board notes the recommendations, the summary of actions to be taken, and the progress made against such from the following Audit Reports: A. Staffordshire Pension Fund - Governance Arrangements 2023/24 B. Staffordshire Pension Fund – Pensions Administration 2023/24.

LGPS Central Pool

The Board will be provided with the notes from the Local Pensions Board Chairs meeting for the LGPS Central Pool, which took place on 21 October 2024.

The LGPS Central Pool is a collaboration of nine Midlands based Local Government Pension Scheme funds, brought together to manage assets worth over £48 billion.

Governance

The Board will consider a report on eight medium-risk areas that were identified in the Staffordshire Pension Fund Risk Register.

The areas of medium risk relate to:

  • a review against governance standards
  • third-party custody arrangements for Private Market investments
  • knowledge of legislative change
  • the potential for regulatory changes on asset pooling.

The report notes that:

The medium risk areas are deemed to be well managed and have appropriate controls in place, the scores have increased predominantly due to the uncertainty of regulatory and legislative changes such as the risk of further pool/fund mergers, the implementation plan for compliance with the Pension Regulators General Code of Practice and any final proposals that may arise from the Good Governance Project.

Matters arising from the Pensions Committee

The Board will receive an update on matters arising from the Pensions Committee.

This will include discussion of the presentation given to the Pensions Committee on 27 September 2024 by Northern Trust, the global investment management firm.

The update will note that:

The Chair commented on the presentation from Northern Trust and how it was quite insightful, focusing on asset concentration, ESG investments, and portfolio diversification. One key point was the concentration of assets in the equity element of the portfolio, with Microsoft highlighted as a good ESG investment due to its sustainable practices and low carbon footprint.

The Board will also discuss Hymans Robertson's presentation to the Pensions Committee, noting that:

The Board focused on the presentation from Hymans and the responsibilities of the Board in terms of communication with various participating employers. The key takeaway was the importance of communication in helping employers understand their contributions and the strategies involved. The discussion also highlighted the historical context of employer contributions and the evolution of strategies over time.

LGA and Scheme Advisory Board update

The Board will receive an update on current issues from the Local Government Association (LGA) and the Local Government Pension Scheme (LGPS) Scheme Advisory Board.

The update will cover:

Local Government Association Update

  • Pensions Dashboard Programme
  • DLUHC Reverts to MHCLG
  • Government Launches Pensions Review
  • McCloud remedy

Scheme Advisory Board Update

  • Good Governance
  • SAB opt-out survey
  • Gender Pensions Gap
  • SAB published 2023/24 Annual Report

The McCloud remedy1 came about as a result of the UK Government losing a case at the Court of Appeal in December 2018. The Court ruled that changes to the pension schemes for judges and firefighters - which moved members from a final salary scheme to a career average scheme - amounted to unlawful age discrimination. The acronym DLUHC refers to the Department for Levelling Up, Housing and Communities, which was known as the Ministry of Housing, Communities and Local Government (MHCLG) until September 2021.


  1. The McCloud Remedy is a legal judgment that found that changes made to public sector pensions in 2015 were discriminatory. As a result, public sector workers are entitled to be given the choice of whether their pension benefits for the remedy period (between 1 April 2015 and 31 March 2022) should be calculated under the legacy pension schemes or the 2015 reformed schemes.