Agenda item

To submit the report of the Chair of the Pensions Committee.

1.    Note the Wales Pension Partnership Fit for the Future Business Case (Appendix 3, Appendix 4 and section 4 of the report) 

2.    Approve the formation of a corporate entity wholly owned by the WPP Administering Authorities (AAs) to be the WPP Investment Management Company (IMCo.) and all other actions necessary to submit an application to the Financial Conduct Authority (FCA) for the authorisation of the company including but not limited to the selection and recruitment of Senior Management Function (SMF) roles as required by the FCA and the preparation and submission of the application to the FCA.  (Section 5 of the report)

3.    Approve the revised WPP Business Plan & budget 2025/28 which includes design/enabling costs for Project yr Wyddfa (Appendix 5 and Section 6 of the report)

4.    Delegate the S151 Officer in consultation with the Chair of the Pensions Committee to progress Project yr Wyddfa alongside WPP Administering Authorities (AAs) in line with the Government timetable within the approved budget. 

5.    Delegate the final approval of the final formal documentation required for IMCo. to be operational, described as “Go Live Work” as outlined in Section 7, to The Pension Fund Committee to give effect to The WPP Fit for the Future Business Case.  

The report was submitted by Cllr Elin Hywel, Chair of the Pensions Committee. It was explained that this item was one that had been discussed over the past few months. The officers were thanked for their endless work on this plan. In the Committee's opinion, it was emphasised that this was the best option that met the needs identified by the UK Government.

It was explained that Cyngor Gwynedd was the administrative authority for the Gwynedd Pension Fund, which meant that it administered pensions for over 50,000 members, almost 50 employers and £3.2 billion of assets. It was stated that the Pension Fund had been working since 2017 with the eight Local Government Pension Scheme funds in Wales, through an inter-authority agreement that had been approved by the Full Council back in March 2017, which was the pool established, namely the Wales Pension Partnership.

It was noted that the Pool had around £25 billion of assets under its management, with benefits through cost savings, improved investment opportunities, improved performance and increased collaboration and governance across Wales. It was explained that this had worked well for Gwynedd, with 85% of the Gwynedd Pension fund being pooled and that the collaboration had been very beneficial to the fund.

Since October 2023, it was noted that the Government had been reviewing the investment arrangements of Local Government Pension Schemes in England and Wales. It was expressed that an initial consultation had taken place, and that the Pensions Bill had recently been published. Attention was drawn to the expected operating model that would meet the noted standards.

The final need, namely, to set up an investment management company, was explained, which was under consideration today. It was noted that the Wales Pension Partnership intended to establish a separate investment management company (''IM Co'') which had been regulated by the FCA in accordance with Government criteria, this project had been dubbed the 'Snowdon Project' by the Welsh Pension Partnership.

It was explained that the decision to build an investment management company ("IM Co") for the Wales Pension Partnership offered a unique opportunity to establish a centre of expertise in LPGA investments in Wales. The Wales Pension Partnership had prepared a strong business case for the Government in February 2025, and a letter of support for the Business Case was received in April 2025.

There would be a need to introduce new elements in the governance structure, including a Shareholder Board with representation from all administrative authorities. In the medium and long term, it was noted that WPP hoped to provide financial benefits that would exceed the costs of the operating model. There was no investment transfer costs but it was estimated that the cost of the new model would be approximately £5-£5.5m - the costs of the Fund and not the Council. The decision was noted.

Members were given an opportunity to ask questions and offer observations.

Of the two proposals identified by the UK Government, it was stated that this was the best option. It was noted that this retained control within Wales and therefore retained control within Welsh Local Governments. It also ensured that decisions protected the interests of Wales as well as ensuring that the Welsh language was used as a business language and kept alive.

Concern was highlighted regarding signing up to this with risks if other Authorities went out of business financially, particularly as Cyngor Gwynedd had been so good at doing this work. It was explained that these were points that had been raised as a committee. It was stated that there were some things to bear in mind namely that 85% of investments had already been pooled with the Wales Pensions Committee and therefore, the good work already undertaken was being maintained rather than being expanded.

It was emphasised that the Pool in Wales was regarded as the Pool that led the work and was a huge success and the Pool from England would be very keen to join. However, it was explained that keeping it in Wales ensured the Welsh element.

RESOLVED

1.     To note the Wales Pension Partnership Fit for the Future Business Case (Appendix 3, Appendix 4 and section 4 of the report)  

2.     To approve the formation of a corporate entity wholly owned by the WPP Administering Authorities (AAs) to be the WPP Investment Management Company (IMCo.) and all other actions necessary to submit an application to the Financial Conduct Authority (FCA) for the authorisation of the company including but not limited to the selection and recruitment of Senior Management Function (SMF) roles as required by the FCA and the preparation and submission of the application to the FCA.  (Section 5 of the report)

3.     To approve the revised WPP Business Plan and budget 2025/28 which includes design/enabling costs for Project yr Wyddfa (Appendix 5 and Section 6 of the report) 

4.     To delegate powers to the Section 151 Officer in consultation with the Chair of the Pensions Committee the right to proceed with the Snowdon Project with WPP Administration Authorities in accordance with the Government's timetable within the approved budget.

5.     To delegate the final approval of the final formal documentation required for IMCo. to be operational, described as “Go Live Work” as outlined in Section 7, to the Pensions Committee to give effect to the WPP Fit for the Future Business Case.