Agenda and minutes

County Councillor E Pope (Chair)

County Councillors

Co-opted members

Ms J Eastham – Further/Higher Education Institutions 

Mr P Crewe - Trade Unions

Ms S Roylance - Trade Unions

In attendance:

Mrs H MacAndrew, Director of Law and Governance, Lancashire County Council.

Mr S Greene, Head of Pension Fund, Lancashire County Council.

Mr D Crum, Independent Investment Adviser.

Ms M George, Independent Investment Adviser

Mr M Neville, Senior Democratic Services Officer, Lancashire County Council.

Mr C Rule, Chief Executive, Local Pensions Partnership.

Ms J Darbyshire, Managing Director, Local Pensions Partnership Administration.

Ms F Miller, Chair of the Lancashire Local Pension Board (online).

Announcements

The Chair welcomed Mr D Crum, the newly appointed Independent Investment Adviser, to his first meeting together with County Councillor G Dowding who had returned to the Committee in place of County Councillor J Mein.

The Chair also reported that as Councillor D Borrow had resigned from Preston City Council, he was no longer a Co-opted member of the Committee representing City/Borough Councils. On behalf of the Committee the Chair thanked Councillor Borrow for his long service and contribution to the work of the Committee.

The Chair presented the report on the constitution and membership of the Committee which included reference to some nominating bodies having not yet confirmed their appointments for Co-opted members.

Resolved: 

1.   That the constitution and membership of the Pension Fund Committee, as set out below, is noted.

  County Councillors (12)

Co-opted members (7)

a)  Nominations confirmed.

Councillor M Smith - Blackpool Borough Council.

Mr P Crewe - Trade Unions.

Ms S Roylance - Trade Unions.

Ms J Eastham - Further Education and Higher Education Institutions.

b)  Nominations to be confirmed.

Representative from Blackburn with Darwen Borough Council

2 representatives of City & Borough Councils.

2.  That the Terms of Reference set out at Appendix 'A' to the report
presented are noted and a copy placed in the Minute Book

Apologies for absence were received from County Councillor J Couperthwaite and Co-opted member Councillor M Smith.

Members are asked to consider whether they need to disclose any pecuniary and non-pecuniary interest in matters appearing on the agenda. Should a member require advice on declarations of interest they are advised to contact Josh Mynott, Democratic Services (telephone 01772 534580) in advance of the meeting.

County Councillor G Dowding declared a non-pecuniary interest as she was a member of Lancaster City Council which was involved in the Eden Project Morecambe referenced in items 12 and 14 on the agenda.

The Committee is asked to confirm the enclosed copy of the Minutes from the meeting held on 8th March 2024 as an accurate record and for the Chair to sign the copy in the Minute Book.

The Chair reported that the auditors' final opinion on the Lancashire County Council and Lancashire County Pension Fund 2022/23 accounts was still awaited, and the Head of Fund confirmed that an update would be given to Committee in September 2024. It was noted that further information regarding 'global controversy engagement' had been included in the report at item 7 on the agenda and that a note in response to the query on exposure to tobacco/alcohol was being prepared for circulation to Committee members outside of the meeting.

Resolved: That the Minutes of the meeting held on 8^th March 2024 are confirmed as an accurate record and signed by the Chair.

The Head of Fund presented a report on the financial performance of the Fund for the year ended 31^st March 2024 and, in response to a query, recognised there had been an overspend on oversight/governance fees due to increased activity during the year on LPP shareholder related matters and reviewing the structure of the Pensions Team.

Resolved: That the financial performance of the Lancashire County Pension Fund for the year ended 31^st March 2024, as set out in the report presented, is noted.

The Chair presented a report on the 2023/24 Training Record which reflected the participation of individual members of the Committee in external/internal training events over the last 12 months and noted that an internal workshop on cyber security would be held at 11.00am on 9^th July 2024 in the Local Pension Partnership Administration Limited offices, Preston.

The Chair also reported that a Training Policy, including a Plan for the remaining 6 months of 2024/25, would be presented to the next meeting together with a proposed system to enable members of the Committee to access online training in the future.

Resolved: That the participation of individual members of the Committee at the training events referred to in the report, together with the contents of the Training Record for 2023/24, as set out in Appendix 'A' to the report presented, are noted.

The Committee considered a detailed report on responsible investment matters covering Q1 of 2024 (January to March) and Mr Rule, Chief Executive of Local Pensions Partnership Ltd, answered questions regarding:

·  The decrease in exposure to Green/Brown investments resulting from an increase in the total value of the Fund.

·  Potential investment in housing and the wider 'Living Sector'.

·  Current and future investment in electrical charging facilities and the wider network (including ports).

·  Stewardship activity and shareholder voting regarding climate related issues.

·  Current investment in solar energy as part of the Real Estate Fund and potential future investment into the National Grid.

Resolved: That the updates on responsible investment matters during Q1, as set out in the report and Appendices presented, are noted.

An item of urgent business may only be considered under this heading where, by reason of special circumstances to be recorded in the Minutes, the Chair of the meeting is of the opinion that the item should be considered at the meeting as a matter of urgency.  Wherever possible, the Chief Executive should be given advance warning of any Member’s intention to raise a matter under this heading.

The Chair reminded members of the Committee that after publication of the agenda a supplementary agenda had been circulated in relation to a report on the revised Articles of Association for Local Pensions Partnership Ltd which would be considered in Part II of the agenda after item 12.

The next meeting will be held on 13^th September 2024 in Committee Room 'A' – The Tudor Room at County Hall, Preston, starting at 10.30am.

It was noted that the next scheduled meeting would be held at 10.30am on 13^th September 2024 in Committee Room 'A' – The Tudor Room at County Hall, Preston.

The Committee is asked to consider whether, under Section 100A(4) of the Local Government Act, 1972, it considers that the press and public should be excluded from the meeting during consideration of the following items of business on the grounds that there would be a likely disclosure of exempt information as defined in the appropriate paragraph of Part 1 of Schedule 12A to the Local Government Act, 1972, as indicated against the heading to the item.

Resolved: That the press and public be excluded from the meeting during consideration of the following items of business on the grounds that there would be a disclosure of 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 the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A of 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.

Ms J Darbyshire, Managing Director at Local Pensions Partnership Administration Ltd, presented a detailed report on the performance of the pension administration service in Q4 and for the 12 months to 31st March 2024. In considering the report the Committee discussed performance against the Service Level Agreement, enhancements to performance metrics, customer satisfaction and the Pensions Dashboard.

Resolved: That the performance of the pension administration service against standards and targets during 2023/24, as set out in the report and Appendices presented is noted.

The Chair then took item 15 on the agenda as the next item of business so that the Lancashire Local Pension Board Chair could be present during the discussion before she dialled out of the meeting.

Exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of 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 Head of Fund presented an update report on the Risk Register for the Fund and the Committee considered specific templates on risks associated with geopolitical events, implementation of new pension systems and the statutory provision of information. It was also noted that an updated Cyber Policy would be presented to the next meeting for consideration and the Responsible Investment Policy would be reviewed in the future. In addition, it was noted that the Local Pension Board would consider the statutory provision of information risk in more detail at its meeting in July 2024.

Resolved: That the current risk summary document and risk register for the Lancashire County Pension Fund, as set out in the Appendices to the report presented, are noted.

Exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of 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 an update report on activity by the Local Pensions Partnership Limited (LPP) and its subsidiaries up to 31^st March 2024 and Mr Rule, Chief Executive from LPP answered questions in relation to the company's progress towards achieving Net Zero and potential future investment in Real Estate.

Resolved:

1.  That the updates on the activity and financial position of the Local Pensions Partnership Ltd and its subsidiaries, as set out in the report presented, are noted.

2.  That the approval by the Head of Fund under delegated powers for the procurement of an external auditor for the Local Pensions Partnership Ltd, as set out in the report presented, is noted.

The Chair of the Lancashire Local Pension Board dialled out of the meeting at this point

The Committee considered a report regarding minor amendments to the Articles of Association of Local Pensions Partnership Ltd which had resulted from the updated Shareholder Agreement approved in February 2024.

Resolved: 

1.  That the updated Articles of Association of Local Pensions Partnership Ltd, as attached at Appendix 'A' to the report presented, are recommended to Full Council for consideration and approval.

2.  That the update on minor amendments to the Shareholder's Agreement approved by the Director of Law and Governance in accordance with the decision of the Full Council in March 2024 are noted.

Exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A of 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.

Mr Rule, the Chief Executive from Local Pensions Partnership Ltd and Ms George, Independent Investment Adviser to the Fund, presented a detailed report on key investment themes, macro-economic factors that influenced the investment market, Fund developments and the performance of the Fund up to the end of March 2024, and answered questions from Committee members.

Resolved: That the updates and summary of the Fund's performance up to the end of March 2024, as set out in the report presented, are noted.

Representatives from the Local Pensions Partnership left the meeting at this point.

Exempt information as defined in Paragraph 3 of Part 1 of Schedule 12A of 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 Head of Fund presented a report on the various matters discussed at the Investment Panel on 7^th March 2024.

Resolved: That the Minutes of the Investment Panel held on 7^th March 2024 are noted.

Exempt information as defined in paragraphs 1,2 and 3 of Part 1 of Schedule 12A of 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.

It was reported that in accordance with the decision of the Committee in March 2024 a Sub Committee had been established to conduct interviews and appoint a new Independent Investment Adviser to the Fund. Following interviews in May 2024 the Sub Committee had appointed Mr D Crum for an initial term of 2 years from 1^st June 2024 with the potential to extend for a further 12 months subject to approval by the Committee.

Resolved: That the appointment of Mr D Crum as an Independent Investment Adviser to the Fund, as set out in the report presented, is noted.

Exempt information as defined in paragraph 3 of Part 1 of Schedule 12A of 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.

It was reported that in December 2023 the Committee had approved the Lancashire County Council's Procurement Service to undertake a procurement exercise via the National LGPS Framework to appoint an independent provider for custody services to the Fund. The Committee noted that following a robust evaluation process the custody services provider which had achieved the highest total score across the Quality and Financial criteria had been awarded the contract to provide custody services for 3 years with an option to extend for a further 3 years, commencing on 16^th July 2024.

Resolved: That the award of a contract to an independent provider to undertake custody services for the Lancashire County Pension Fund over the next 6 years, commencing on 16^th July 2024, as set out in the report presented, is noted.