(Not for Publication – Exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act, 1972. It is considered that in all the circumstances of the case the public interest in maintaining the exemption outweighs the public interests in disclosing the information).
Minutes:
(Exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act, 1972. It was considered that in all the circumstances of the case the public interest in maintaining the exemption outweighed the public interest in disclosing the information).
The Committee considered a report on the progress made since the last meeting on the development of an Asset and Liability Management Partnership with the London Pensions Fund Authority (LPFA), known as the Lancashire and London Pensions Partnership (LLPP).
Ian Young, Director of Governance, Finance and Public Services, gave an overview of progress made and highlighted that, whilst work was progressing on schedule towards a 1 April implementation date and that officers were cautiously optimistic of meeting the timetable, nevertheless there remained a risk that Full Council approval could not be sought before then if all the necessary agreements and documents had not been finalised. Should that be the case, it may be necessary for Full Council to consider the proposals at its meeting on 26 May.
The Committee’s attention was also drawn to the Government’s recent announcement on wealth funds and the minimum £25bn required for pooled fund proposals to go forward, and the Committee were invited to consider whether the proposed partnership with LPFA should be ‘paused’ to allow for discussions to take place with other funds with a view to reaching the £25bn minimum.
Laura Sales, Director of Legal and Democratic Services, updated the Committee specifically on progress on the development of the documentation necessary to give effect to the proposed arrangements. It was reported that the principal document underpinning the proposals was the Shareholder Agreement between the Lancashire County Pension Fund (LCPF) and LPFA. In addition to this, work was progressing well on various governance issues and the Investment Management Agreement was almost complete. Agreement on administrative services was close to conclusion and other areas being brought to a final stage included risk and liability, transfer of assets and the provision of Treasury Management Services to Lancashire County Council by LLPP. Whilst further work remained to be undertaken, a 1 April implementation date remained realistic.
Mark Packham, PricewaterhouseCoopers (PwC), updated the Committee on the work that PwC had undertaken on behalf of the County Council to consider the financial viability of the partnership proposals. It was suggested that discussions with other pension funds in the North West should continue in the light of the Government’s announcement on wealth funds and that the strength of the LLPP proposals lay in the clarity and vision and the structures which would be in place and which would be attractive to other funds. Despite the announcement of the £25bn benchmark there remained a strong case for pressing ahead with the proposals as they stood, not least the indication of Government support to date. It was important, however, for the Committee to consider all the options available, including the option of ‘pausing’ the process.
The Committee discussed the option of continuing with the partnership proposals in their current form towards a 1 April implementation, together with the alternative option of ‘pausing’ the process to allow for discussion with other funds to explore options for reaching the £25bn minimum. Issues considered included the financial and reputational risks. Given that continuing with the current proposals did not prevent discussions with other funds continuing, the Committee concluded that the partnership proposals should proceed as planned to a 1 April implementation.
Resolved: - That:
(i) The continuing progress with the development of the Lancashire and London Pensions Partnership, as set out in the report, now presented, be noted;
(ii) The progress on the preparation of the legal documentation, as set out in the report, now presented, be noted;
(iii) The progress on the ongoing work by the independent financial advisors on the proposed pooling arrangement, as set out in the report, now presented, be noted.