Agenda item

To consider and note the contents of this report and the appendices

To recommend the revised Inter Authority Agreement (IAA) to full Council on 5 March 2026 for approval as a reserved matter.

DECISION:

To note the content of this report and the appendices.

To recommend the amended Inter-Authority Agreement (IAA) to the full Council on 5 March 2026 for approval as an allocated matter

Submitted - the report of the Head of Finance and the Investment Manager highlighting the need for the Committee to formally recommend the Inter-Authority Agreement (IAA) to the Full Council for approval.

Members were reminded that the Inter-Authority Agreement was the formal legal and governance framework binding together the eight administering authorities of the Welsh Local Government Pension Scheme into the Wales Pension Partnership. It was reported that the Inter-Authority Agreement (IAA) was first approved in 2017 when the WPP was established, but following a 'Fit for the Future' consultation, and the adjustments needed to ensure compliance with UK Government requirements, investment management company WPP IM Co. was established and incorporated. As a result, it was considered necessary to undertake a comprehensive review of the IAA to ensure that it remained appropriate. It was reiterated that while the WPP had been successful, with good governance and arrangements leading to good returns, the UK Government was unwilling to continue with the arrangement and therefore a new investment company had had to be formed; under the 'Fit for the Future' requirements there would be significant adjustments to the existing structure, which would need to be operational by 1 April 2026.

Reference was made to the main changes in the new structure along with the assurance note that Hymans Robertson (WPP's oversight and governance adviser) had prepared for the eight administering authorities. It was noted that the assurance note included input from the eight authorities and provided an independent overview of the new regime and the key amendments proposed as part of the recommendation.

Work prepared by Burges Salmon (WPP's legal adviser) detailing all proposed amendments to the IAA was highlighted. The Committee was assured that the proposed agreement had been scrutinised by several layers of oversight which included discussions with the Steering Group, and that the Monitoring Officers of the eight administering authorities had provided input to ensure that the individual Councils were secure. Each of the eight administrative authorities would follow the same procedure to approve the Inter-Authority Agreement.

Thanks were expressed for the report.

The background work that had been done to prepare the agreement within a tight timeframe was appreciated, as was the good scrutiny work carried out by Hymans Robertson and Burges Salmon in highlighting the implications.

Thanks were given for the information-sharing workshop organised for members of the Pensions Committee and the Pension Board (23-02-26); the discussion had been valuable and beneficial and took place in a friendly atmosphere – reassuring the Committee that it was making the right decisions.

Observations arising from the ensuing discussion:

·        Concern that the Committee's role appeared to be as an oversight body, losing the right to participate in the discussion on investments

·        Concern that the Committee was losing its managerial role and responsibilities

·        Why was there a Senior Officer and not a Member on the Shareholder Forum? The opportunity of having the Members' voice on the Forum was being missed - the public contacted/shared their concerns with Elected Members if things did not go well, so it would be wise for them to have input

·        It had to be emphasised that the approval of the Inter-Authority Agreement was a response to statutory requirements

·        That the quality of the background work was of a very high standard, professional and detailed - the Committee relied on a standard of information of this level

In response to the observations, the Head of Finance accepted that the situation was a frustrating one and that layers of complexity were being added to the current arrangement which, to date, had been very clear and orderly. He added that as the Section 151 Officer, he would be attending the Shareholders' Forum on behalf of the Council (and not the WPP) where he had a duty to ensure that shares and actions were safe. The Monitoring Officer reiterated that the Council was a Shareholder in this situation and was entitled to vote on the decisions to protect the interests of Gwynedd; that could be discussed in the item on approving the Shareholders' Agreement.

It was proposed and seconded to recommend the Agreement to the Full Council

RESOLVED:

·        To note the content of this report and the appendices.

·        To recommend the amended Inter-Authority Agreement (IAA) to the full Council on 5 March 2026 for approval as a reserved matter