The Pension Fund Committee of Lancashire County Council met on Friday, 14 June 2024, to discuss various matters related to the management and administration of the Lancashire County Pension Fund. Key topics included the external audit findings for 2022/23, budget monitoring for 2023/24, the approval of the 2024/25 budget, and updates on responsible investments.

Lancashire County Pension Fund - External Audit Findings Report 2022/23

Mr S Basnett, Engagement Manager at Grant Thornton, presented the external audit findings for the Lancashire County Pension Fund's annual accounts for the year ending 31 March 2023. The Committee noted the national delays in local government audits and acknowledged that the auditors' final opinion would be presented to the Audit Risk and Governance Committee on 22 April 2024. The Committee resolved to note the findings and await the final opinion.

Budget Monitoring 2023/24 – Q3

A report on the income and expenditure of the Fund for the nine-month period up to 31 December 2023 was presented. The Committee reviewed the budget and forecast variances for the financial year ending 31 March 2024 and resolved to note the financial results.

Lancashire County Pension Fund Budget 2024/25

The Head of Fund presented a one-year budget for the Fund for the year ending 31 March 2025. The Committee approved the budget as set out in Appendix 'A'.

Overpayments

The Head of Fund reported on the recovery of Pension Fund debts and the writing off of irrecoverable amounts. The implementation of new pension administration and finance systems in 2022 had initially affected debt recovery, but improvements were now reflected in the report. The Committee noted the update on overpayments for the period 1 April 2022 to 31 March 2023.

Pension Related Training for Members of the Committee

A report on pension-related training involving Committee members since the last meeting was presented. County Councillor Clifford shared his experience at the PLSA Investment Conference, and the Chair encouraged members to attend future external conferences. The next internal workshop was scheduled for 27 March 2024. The Committee resolved to note the participation in training events and update the Training Record.

Training Plan 2024/25

The Committee considered a draft Training Plan for the first six months of 2024/25, which included various training opportunities based on regulatory requirements and best practices. The Head of Fund confirmed that a revised plan for the remainder of the year would be presented later. The Committee approved the Training Plan and requested an updated plan for future approval.

Lancashire Local Pension Board Workplan 2024/25

The Chair presented the 2024/25 Work Plan for the Pension Board, developed in consultation with Fund Officers. The plan included regular activities and specific tasks related to the Lancashire County Pension Fund Strategic Plan. The Committee approved the Work Plan as set out in Appendix 'A'.

Responsible Investments Report

The Head of Fund provided an update from Local Pensions Partnership Investments Limited on responsible investment matters during the fourth quarter of 2023. Committee members queried the 'global controversy engagement' reference and the level of Fund investment in tobacco/alcohol. Mr Rule, LPP Chief Executive, committed to providing further information. The Committee noted the update and requested additional details on the queried items.

Local Pensions Partnership Administration Update

Ms J Darbyshire, Managing Director at Local Pensions Partnership Administration Ltd (LPPA), presented a report on the performance of the pension administration service for the three months to 31 December 2023. The Committee discussed the need for greater employer engagement to ensure timely and accurate information for processing retirements. The Chair urged members to address this issue with employers. The Committee noted the performance report and requested a further report on improved engagement and communications.

Lancashire County Pension Fund Strategic Plan 2024/25

The Head of Fund presented the draft Lancashire County Pension Fund Strategic Plan for 2024/25, outlining key projects and activities for the next 12 months. The Committee approved the Strategic Plan and noted the Pension Fund Team structure as set out in Appendix 'B' and Appendix 'C'.

Local Pensions Partnership - Shareholder Update

Mr Rule provided an update on the activities of the Local Pensions Partnership Ltd (LPP) and the ongoing LPP Governance Review. The Committee noted the shareholder update and activities related to the Fund's 2024/25 Strategic Plan.

Local Pensions Partnership Limited - Budget 2024/25

Mr Rule presented the LPP Group budget for 2024/25 and the business plan for Local Pensions Partnerships Investments Ltd. The Committee approved the Group budget and noted the business plan.

Investment Context Report

Ms George, Independent Investment Adviser, reported on the performance of global markets and other factors influencing the investment markets. The Committee noted the report.

Investment Performance Report

Ms George also presented a report on the Fund's performance up to 31 December 2023, highlighting the total portfolio performance, asset class allocations, and the current Fund level. The Committee noted the performance report.

Investment Panel Report

The Head of Fund reported on the matters discussed at the Investment Panel meetings on 30 November 2023 and 7 March 2024. The Committee noted the minutes of the Investment Panel held on 30 November 2023.

Appointment of Independent Investment Adviser to the Pension Fund

The Head of Fund presented a report on the recruitment process for an Independent Investment Adviser. The Committee approved the recruitment process and the establishment of an Appointments Sub-Committee to conduct interviews and appoint the Adviser.