Agenda item

To consider and approve the 2026/27 financial year budget for the Pensions Administration and Investment sections.

DECISION

·        To accept the information and approve the budget of the Pensions Administration Unit and the Investment Unit for the financial year 2026/27

·        Recommend that discussions commence as soon as possible, on the structure and functions of the two units in response to 'Fit for the Future' regulations

A report was presented by the Investment Manager seeking the Committee's approval of the 2026/27 financial year budget for the Pensions Administration and Investment sections.

It was reported that the budget was now approved on an annual basis by the Pensions Committee. Reference was made to the Pensions Administration Section budget, consisting of 25 salaried staff members, together with systems, printing, and central reimbursement costs. Attention was drawn to supplies and services highlighting that the budget had to be increased to £185,500, mainly due to increases in postage costs, and software costs - costs that were unfortunately unavoidable.

In the context of the Investment Section's budget, it was noted that the majority of their duties related to the work of the Pension Fund but that they were also responsible for Cyngor Gwynedd's Treasury Management. Additionally, the costs of the Wales Pension Partnership (WPP), investment managers and advisers were the responsibility of the Investment Manager; these costs varied and depended on the performance of investments and the work required to be carried out by the advisers and the Partnership. When transferring and investing with WPP IM Co it would be necessary to keep a close eye on the costs over the forthcoming period, and it was therefore considered that there was no purpose in setting a budget for this year, although this would require attention in the next financial year.

Another element that could not be included in the budget were the changes required as part of the 'Fit for the Future' regulations where there would be a statutory requirement to appoint a Chief Officer for the Fund, an individual who was independent of the Committee, along with the costs of additional governance and training requirements. It was noted that as requirements increased and more information on these elements became available, it was likely that it would be necessary to introduce a supplementary budget. A new structure would need to be established, and job descriptions decided by 1 October 2026, although final guidance had not been issued. It was reiterated that, in Gwynedd, the Head of Finance and the Investment Manager had already met the Head of Legal Services and the Head of Corporate Services to discuss the constitutional arrangements.

Thanks were expressed for the report

Comments arising from the ensuing discussion:

·        The amendments were inevitable

·        Discussions should begin as soon as possible, regarding the structure and functions of the two sections in response to the 'Fit for the Future' regulations

·        This assumed that there was no slippage in the ‘Fit for the Future’ timetable

In response to a question regarding the role of the independent individual on the Committee, it was noted that this person would hold certain qualifications, in line with the requirements of the Act, and would provide advice, share expertise and provide guidance and overview of the investment and administrative elements. It was reiterated that neither the role of Committee Members nor Co-opted Members would change.

RESOLVED

·        To accept the information and approve the budget of the Pensions Administration and Investment Sections for the financial year 2026/27

·        Recommend that discussions commence as soon as possible, on the structure and functions of the two sections in response to the 'Fit for the Future' regulations