Agenda item

To receive and note a quarterly update from Wales Pension Partnership

DECISION:

·        To accept and note the information.

·        The Chair of the Pensions Committee to express the Committee's concerns to the WPP regarding the suggestion that all the operating activity may be delegated to the Partnership. Concern was expressed that should the Partnership take greater responsibility for implementing the investment strategy, input must be secured from the individual funds of the Partnership.

·        To welcome the fact that use of the Welsh language has been noted as essential in response to the Consultation by the MHCLG – ‘Fit for the Future’ - the Gwynedd Pension Fund and the WPP will need to be able to provide any information and any communications ⁠in Welsh as well as English.

The Investment Manager highlighted that the report now noted the latest information about the WPP's work. Attention was drawn to the discussions of the December 2024 meeting of the Joint Committee, highlighting that the Partnership had recently won the 'ESG Innovation' award due to the Sustainable Active Equity Sub-Fund.

Reference was made to the Operator's update for the period and the market conditions that they were monitoring. It was reported that the performance of the funds had been strong, with global equity and fixed income markets rising during the period. It was explained that two procurement exercises had recently taken place for an Oversight Advisor and a Voting and Engagement Service Provider, and the recommendations of the process had been approved by the Committee in December. It was announced that Hymans Robertson had been re-appointed as an Oversight Advisor and that Robeco had been re-awarded the Voting and Engagement Service Provider contract.

Attention was drawn to the Westminster Government's latest consultation – 'Fit for the Future' that called for evidence, which broadly suggested the route the Westminster Government expected the LGPS to take. It was reported that the consultation examined areas such as asset pooling, investment locally and in the UK, and governance with 30 questions to respond to by 16 January 2025. Reference was made to the Gwynedd Pension Fund's response to the consultation (with WPP's response already shared with Members via e-mail), noting that workstreams were ready to be implemented once the results of the consultation were shared.

Gratitude was expressed for the report.

In response to a question regarding expected changes to the pools, and the requirement for them to be registered with the FCA (Financial Conduct Authority), it was noted that only three pools were not registered. In response to a supplementary question whether the FCA had capacity to register companies, the comment that this was extra work for them was accepted, but we needed to secure the best service in future from the FCA. It was reiterated that there was ongoing contact with the FCA and regular meetings were being held between WPP members and the FCA.

During the ensuing discussion, the following comments were noted by Members;

·        Concern from the suggestion that all operating activity may be delegated to the Partnership. Would the Gwynedd Pension Fund lose control? Miss out?

·        Accepted the need for an Investment Strategy, but would Gwynedd have input into the strategy?

·        That WPP was doing a very good job and that while we understood the considerations of the Westminster Government's consultation, some of the ideas were concerning.

·        That the Welsh language was a positive and strong element to the WPP.

·        Concerns to be submitted to the next meeting. WPP Chairs Forum– a response from the Forum to be shared with the Committee.

RESOLVED

·        To accept and note the information.

·        The Chair of the Pensions Committee to highlight the Committee's concerns to the WPP regarding the suggestion that all the operating activity may be delegated to the Partnership. Should the Partnership take greater responsibility for implementing the investment strategy, concern was noted that input must be secured from the individual funds of the Partnership.

·        Welcomed that use of the Welsh language had been identified as necessary in response to a Consultation by the MHCLG – 'Fit for the Future' – the Gwynedd Pension Fund and WPP would need to be able to provide information and any communication in Welsh as well as English.