The Dyfed Pension Fund Pension Board met on Wednesday 24 July 2024 to review the outcomes of the Dyfed Pension Fund Committee meeting held on 19 June 2024. The Board noted reports on the Audit Plan, the final budgetary position for 2023-24, cash reconciliation as at 31 March 2024, pensions administration, breaches, the risk register, the training plan, carbon intensity analysis, and the Wales Pension Partnership's responsible investment update. The Board also reviewed its own budget monitoring for April to June 2024 and its work plan for the remainder of the year.

Dyfed Pension Fund Committee Meeting 19 June 2024

The Board reviewed the reports presented to the Dyfed Pension Fund Committee on 19 June 2024.

Audit Plan 2024

The Board noted the Dyfed Pension Fund Audit Plan, which outlines the statutory responsibilities of the Auditor General for Wales as the Pension Fund's external auditor. The plan details the work to be undertaken by Audit Wales to address identified audit risks and key focus areas for 2024, including the estimated audit fee, audit team, and key dates for planned outputs.

Final Budgetary Position 2023-24

A report detailing the Dyfed Pension Fund's final budgetary position for 2023/24 as at 31 March 2024 was considered. The Board noted that income had exceeded budget. In response to a query about whether contributing Authorities would receive rebates, the Treasury and Pension Investments Manager clarified that the next triennial actuarial evaluation to set employer rates was scheduled for March 2025. The Board also noted that Wales Pension Partnership expenditure was over budget, primarily due to increased allocations in Global Credit and Sustainable Active Equity investments during the year.

Cash Reconciliation as at 31 March 2024

The Board reviewed the Cash Reconciliation report, which provided an update on the Dyfed Pension Fund's cash position as at 31 March 2024. The Treasury and Pension Investments Manager explained that the noted high levels of debtors and creditors were short-term and related to costs paid or income received in April 2024 that pertained to the 2023-24 financial period, and were therefore accrued into the previous year.

Pensions Administration Report

The Board considered a report providing an update on activities within the Pensions Administration service, including regulatory matters, the breaches register, i-Connect, Guaranteed Minimum Pension (GMP) reconciliation, and workflows. The Pensions Manager confirmed that guidance from the Government Actuary Department had been issued on 16 June 2024, reflecting changes to taxation and interest related to the McCloud judgement.

Breaches Report

The Breaches Report for the Dyfed Pension Fund was received. This report, prepared in accordance with Section 70 of the Pension Act 2004, Code of Practice No. 14, and the Dyfed Pension Fund Breaches Policy, detailed instances where employee or employer contributions had not been received on time.

Risk Register

The Board reviewed the Risk Register, which identifies risks related to the Dyfed Pension Fund's functions. The report includes assessments of potential impact, probability, and risk ratings, along with control measures to mitigate these risks. The focus for this review was on the eight Governance and Regulatory risks, and it was confirmed that no changes had been identified since the previous Committee meeting. In response to comments regarding a recent global IT outage, the Board was assured of the Authority's robust ICT structures and contingency arrangements, including ISO27001 accreditation for the pension administration software. It was clarified that macro-economic factors, categorised as high-risk, were largely outside the Fund's control but were mitigated through diversified asset allocation.

Training Plan 2024-2025

An update on the Training Plan for 2024-2025 was presented, detailing the schedule of committee meetings and training events for members and officers of the Dyfed Pension Fund.

Carbon Intensity Analysis as at 31 March 2024

The Board received an update on the Fund's carbon footprint, illustrating the Weighted Average Carbon Intensity (WACI) for the Fund's equity portfolio. The WACI had reduced by 18% in the year to 31 March 2024, representing a 15% annual reduction since September 2020. The Treasury and Pension Investments Manager informed the Board of ongoing efforts to develop a bespoke investment mandate for the Wales Pension Partnership (WPP) focused on sustainable products.

Wales Pension Partnership Responsible Investment Update - March 2024

The WPP's Responsible Investments update report as at 31 March 2024 was presented, detailing recent Responsible Investment activities and information on the Global Growth, Sustainable Active Equity, and Global Credit Sub-Funds. The update also included a Stewardship Summary. In response to concerns about shareholder proposals supported by the WPP for Tyson Foods not passing, the Treasury and Pension Investments Manager stated that further information would be sought and provided to the Board.

Draft Minutes of the Pension Committee Meeting 19 June 2024

The draft minutes of the Dyfed Pension Fund Committee meeting held on 19 June 2024 were noted.

Pension Board Budget Monitoring 1 April 2024 - 30 June 2024

The Board reviewed its own budget monitoring report for the period 1 April to 30 June 2024. Total actual expenditure incurred was £6.1k, with forecasted expenditure for the year expected to be in line with the budget. It was clarified that a nil figure in the expenditure column for certain items related to timing differences, with invoices not yet processed but reflected in forecast commitments.

Pension Board Work Plan 2024

The Board considered the Pension Board Work Plan for 2024, which outlines the Board's activities and the items to be presented at each meeting. The Work Plan is subject to review and revision at each Board meeting.

Exclusion of the Public

It was resolved, pursuant to the Local Government Act 1972, that the public be excluded from the meeting during the consideration of the following items due to the presence of exempt information.

Independent Advisor Performance & Risk Report to 31 March 2024

The Board considered the Independent Investment Adviser Performance and Risk Report, which detailed investment manager performance for the quarterly, 12-month, and rolling 3-year periods ending 31 March 2024, along with the global market background.

Northern Trust Performance Report to 31 March 2024

The Northern Trust Performance report, detailing the Dyfed Pension Fund's performance as at 31 March 2024 at both a total fund level and by investment manager, was reviewed.

Investment Manager Reports to 31 March 2024

The Board considered reports providing an update on the performance of various investment managers as at 31 March 2024, including BlackRock, Schroders, Partners Group, and the WPP Global Growth, Global Credit, and Sustainable Active Equity Funds.

Schroders Update

A presentation from Schroders was received, providing an update on the Fund's investments, including a business update, Real Estate Market Overview, Portfolio Overview, Performance and Strategy, and Sustainability and Governance activities.