Purpose

 
This report is to seek approval of award of
contract in respect of the following:
 
Title of Contract: The Provision of Pension
Fund Custodian Services
 
Contract Reference: CR/CORP/LCC/24/202
 
Brief Details of Service: Lancashire County
Council (LCC) as Administering Authority (i.e., Lancashire County
Pension Fund (LCPF)) seeks to appoint a professional custodian
service provider for an initial 3-year contract with the option to
extend for any given period up to a maximum of a further 3 years (6
years in total). This is a renewal of existing services.
 
On the 1st of December 2023 the decision to
commence with the procurement activity was approved by the Pension
Fund Committee.
 
The list below is not comprehensive, but a
summary of the services to be provided by the Fund custodian.
 
•Hold LCPF's financial assets (likely in
a digital depository) to protect them from being lost or stolen.
They are responsible for recording the sales and purchases made by
the fund, we trade in multiple currencies e.g. GBP, Euro, USD,
Swedish Krona, Canadian Dollars etc.
 
•Purchase and sell bonds as well as make
capital calls to the Pooled Investments.
 
•Provide monthly accounting transactions
to allow LCPF Finance to update the general ledger for the
investment transactions such as change in market value, sales and
purchases.
 
•Provide monthly and quarterly investment
reports showing the performance breakdown by asset over various
timeframes (1 month + 1, 3 & 5 years) against the Lancashire
portfolio benchmarks and Actuarial benchmarks. The performance
report also compares the portfolio against the strategic asset
allocations to ensure weighted properly and provides major indices
performance such as the FTSE100.
 
•A requirement for the Custodian to work
with the Authority's 3rd party investment management provider LPPI
(Local Pensions Partnership Investments) as part of the ongoing
contract.
 
Length of Contract: Initial 3-year contract
with the option to extend for any given period up to a maximum of a
further 3 years (6 years in total).
 
The contract will commence on 16th July 2024
and will end on 15th July 2027 (initial term). The option to extend
the contract further will be decided at a later date by the
Authority dependant on provider performance and future
requirements.
 
Value: The estimated value of the current
service is £70,000 per annum
 
Tender Exercise
 
I can confirm that a further competition
process was conducted via the Public Contract Regulations (2015)
compliant National LGPS Framework for
Global Custody Services (NCCT42038).
 
The further competition was followed ensuring
compliance with Council Standing orders and UK Procurement
Laws.
 
The Tender Evaluation Panel comprised of:
Chris Ridings (Chair – Non-scoring), Sean Greene (Scoring),
Paul Dobson (Scoring) and Paul Crotty (Scoring).
 
In addition, Junaid Laly and Reece Pearce
supported the Chair in the compliance checks of the tenderer's
submitted price files, which were then disclosed to the scoring
panel members, once the quality evaluation element had been
completed.
Bidders were evaluated on a Quality / Cost
ratio of 80 / 20 as follows:
 
Bids Received: 4
 
The scores achieved following formal tender
evaluation are detailed below:
*Quality - Part 1 (out of 62%)
Quality – Part 2 (out of 18%)
Cost (out of 20%)Final Score (100%)
 
BNY Mellon The tenderer was disqualified on
the basis of a non-compliant submission.
 
CACEIS BANK39.4511.508.9259.87
 
NORTHERN TRUST42.9115.5020.0078.41
 
STATE STREET The tenderer was disqualified on
the basis of a non-compliant submission.
 
*Please note Part 1 of the Quality Evaluation
was a pre-scored element conducted by Mercer, working on behalf of
the Framework Provider. All other elements were scored by the
Authority.
 
Successful Bidder – The Northern Trust
Company
 
Savings: There are no projected savings as the
successful tenderer is the current incumbent provider to the
Authority and the Pension Fund has compared the quoted fees within
their tendered submission at around the same as what the Fund is
currently charged. However, as confirmed in the results of the
further competition the leading compliant bidder was also the
lowest in terms of fees charged.
 
In addition, there is a one-off fee of
£8,000 to use the LGPS Framework which has been agreed by
both Lancashire County Pension Fund and LCC / Corporate Finance at
approximately 80 / 20 split for their requirements under this
contract.
 
 

Content

Neil Kissock, Director of Finance, took a
decision to award a contract to The Northern Trust
Company for the Provision of Global Custody Services for an initial
period of 3 years, commencing on 16th July 2024 with
option to extend for a further period of a maximum of 3 years.
Following the conclusion of a further competition process,
conducted by Lancashire County Council, via
the Public Contract Regulations (2015) compliant National LGPS
Framework for Global Custody Services (NCCT42038).