Agenda and draft minutes

To confirm the minutes of the meeting held on 17 September 2024.

The following amendment to the minute #290 of the meeting held on 17 September 2024 was agreed:

The Committee recorded its concern that Brunel had consistently failed to outperform, or meet, their benchmark targets since appointment, and thus the committee anticipated a material change in outcomes as a priority.

To disclose any pecuniary, other registrable or personal interest as set out in the adopted Code of Conduct.  In making their decision councillors are asked to state the agenda item, the nature of the interest and any action they propose to take as part of their declaration.

If required, further advice should be sought from the Monitoring Officer in advance of the meeting.

No declarations of disclosable pecuniary interests were made at the meeting.

Representatives of town or parish councils and members of the public who live, work, or represent an organisation within the Dorset Council area are welcome to submit either 1 question or 1 statement for each meeting.  You are welcome to attend the meeting in person or via MS Teams to read out your question and to receive the response.   If you submit a statement for the committee this will be circulated to all members of the committee in advance of the meeting as a supplement to the agenda and appended to the minutes for the formal record but will not be read out at the meeting. The first 8 questions and the first 8 statements received from members of the public or organisations for each meeting will be accepted on a first come first served basis in accordance with the deadline set out below.  Further information read Public Participation - Dorset Council

All submissions must be emailed in full to Joshua.kennedy@dorsetcouncil.gov.uk by 08:00am on Friday 22 November 2024.

When submitting your question(s) and/or statement(s) please note that:

·       You can submit 1 question or 1 statement.

·       A question may include a short pre-amble to set the context.

·       It must be a single question and any sub-divided questions will not be permitted.

·       Each question will consist of no more than 450 words, and you will be given up to 3 minutes to present your question.

·       When submitting a question please indicate who the question is for (e.g., the name of the committee or Portfolio Holder). 

·       Include your name, address, and contact details.  Only your name will be published but we may need your other details to contact you about your question or statement in advance of the meeting.

·       Questions and statements received in line with the council’s rules for public participation will be published as a supplement to the agenda. 

·       All questions, statements and responses will be published in full within the minutes of the meeting.   

Questions and statements from members of the public are included in an appendix to these minutes.

To receive questions submitted by councillors.

Councillors can submit up to two valid questions at each meeting and sub divided questions count towards this total. Questions and statements received will be published as a supplement to the agenda and all questions, statements and responses will be published in full within the minutes of the meeting.

The submissions must be emailed in full to Joshua.kennedy@dorsetcouncil.gov.uk by 08:00am on Friday 22 November 2024.

Dorset Council Constitution – Procedure Rule 13

Questions and statements from Councillors are included in an appendix to these minutes.

To consider any items of business which the Chairman has had prior notification and considers to be urgent pursuant to section 100B (4) b) of the Local Government Act 1972. The reason for the urgency shall be recorded in the minutes.

No urgent items were raised at the meeting.

To consider the quarterly report on pension fund administration.

Performance against Key Performance Indicators (KPIs) continued to be positive.

Some of the software required for the implementation of the McCloud remedy had been delivered by the software provider and was being tested. The remaining developments were still expected to be delivered in January 2025.

The Government was consulting on changes that would mean death grants paid by the Local Government Pension Scheme (LGPS) would form part of a member’s estate for inheritance tax purposes. Death grants were currently out of scope for inheritance tax. The change was planned to take effect from April 2027.

It was noted that once the pensions payroll had migrated into the pensions administration system, pensioners would be able to access P60s and payslips on the member portal. Pensioner members were currently unable to do this.

Monthly updates were now sent to scheme employers.

To receive a verbal update from Cllr John Beesley in his capacity as the Committee’s representative on the Brunel Oversight Board and as a member of the Scheme Advisory Board (SAB) for the Local Government Pension Scheme (LGPS).

Cllr John Beesley, the pension fund’s representative on the Brunel Oversight Board (BOB), and also a member of the Local Government Pension Scheme (LGPS) Scheme Advisory Board (SAB), updated the Committee on governance matters relating to investment pooling. 

An introductory meeting with Sally Bridgeland, the new Chair of Brunel, had taken place with Cllr Beesley and officers.  The next BOB meeting was scheduled for 5 December 2024.

The last meeting of SAB was on 25 November 2024, where the Chancellor’s Mansion House proposals were discussed. The Local Government Pension Scheme: Fit For The Future consultation is due to close on 16 January 2025. This consultation seeks views on proposals relating to the investments of the LGPS, such as asset pooling, UK and local investment, and governance matters. SAB planned to prepare a draft response to the consultation prior to Christmas.

Officers would also draft a response to the consultation for consideration by the Chair and Vice-Chair of the Committee, Cllr Beesley and Steve Tyson. Discussions were also taking place between officers of the Brunel Pension Partnership and the ten client/shareholder administering authorities.

The Government’s deadline of March 2026 for a new investment pooling model to be in place would be tight and a lot of work needed to be completed ahead of this, by Brunel in particular.

To approve the Pension Fund Annual Report 2023/24 for publication.

The financial statements included in the annual report were draft financial statements. This was because the external audit had not yet been concluded. The annual report would be updated on completion of the audit.

Two inconsistencies in relation to the wording of the Local Pension Board and omission of the Code of Conduct for scheme member representatives were highlighted. Subject to these inconsistencies being checked and amended as necessary, it was agreed to publish the annual report.

The annual report did not require an equality impact assessment because it reported what had happened during the year and was not a policy, project, strategy, service or proposal that would affect people.

Decision

That the draft annual report for 2023/24 be published.

To consider the quarterly report on the value and performance of the pension fund’s investments.

The value of the pension fund’s assets at 30 September 2024 was just over £4 billion, an increase of approximately £100m since 1 April 2024. The total return from the pension fund’s investments over the quarter to 30 September 2024 was 2.2%, compared to the combined benchmark return of 1.6%. The total return for the year to 30 September 2024 was 13.8% compared to the benchmark return of 13.7%.

The drivers for improved performance in the quarter to 30 September 2024 were the sterling corporate bond fund, multi asset credit fund and UK active equities. The currency hedging in place also helped overall performance.

Simon Wood provided an update on performance of the Brunel portfolios over the quarter to 30 September 2024. Four of the eight active funds outperformed, three underperformed and one fund was in line with the benchmark. The relative performance of Brunel’s portfolios continued to be determined by their exposure to the ‘magnificent seven’ mega-cap stocks. However, it was noted there were signs of a break-up of the magnificent seven stocks which would be positive for Brunel’s global portfolios.

There were concerns of underperformance in the current quarter to date. All listed UK equity portfolios were behind benchmark.

Tim Dickson provided an update on the recruitment of a new Chief Investment Officer (CIO) at Brunel. The process was underway, and interviews were scheduled for January 2025. The current CIO, David Vickers, was due to leave Brunel in Spring 2025.

To confirm the dates for the meetings of the Committee in 2024/25:

1.30 pm Tuesday 18 March 2025 - County Hall, Dorchester.

All meetings to be preceded by training for committee members 10am to 12.45pm.

1.30 pm Tuesday 18 March 2025 - County Hall, Dorchester.

All meetings to be preceded by training for committee members 10am to 12.45pm.

To move the exclusion of the press and the public for the following item in view of the likely disclosure of exempt information within the meaning of paragraph 3 of schedule 12 A to the Local Government Act 1972 (as amended).

The public and the press will be asked to leave the meeting whilst the item of business is considered.

Decision

That the press and the public be excluded for the following item(s) in view of the likely disclosure of exempt information within the meaning of paragraph 3 of schedule 12 A to the Local Government Act 1972 (as amended).

To consider any potential changes to investment management arrangements.

The Committee considered proposals to make some changes to investment management arrangements.

Decision

That the proposed investment management changes were implemented.