The Pension Fund Committee met to consider a number of reports on the performance of the Somerset Council Pension Fund. The committee was also scheduled to receive a verbal update on the state of world financial markets, and to consider the Government's consultation on the future of the Local Government Pension Scheme.

Government consultation on the future of the Local Government Pension Scheme (LGPS)

The meeting was scheduled to consider a report on the Government's consultation on the future of the Local Government Pension Scheme, which closed on 25 September 2024. The report noted that the Government was consulting on a number of proposals, including:

• A new funding regime for the LGPS.
• A new governance framework for the LGPS.
• New investment regulations for the LGPS.

The report recommended that the Committee note the Government's consultation and that the Funds & Investments Manager should draft a response on behalf of the Somerset Fund.

Review of investment performance

The committee was scheduled to review the investment performance of the Somerset Pension Fund. A report by the Funds & Investments Manager showed that the fund's investments had underperformed against the MSCI World Index benchmark. The report highlighted the performance of the Brunel Global High Alpha Portfolio, which is the largest exposure in the fund. The report noted that Alliance Bernstein, one of the five underlying fund managers within the Brunel Global High Alpha Portfolio, had not been doing very well , while RLAM had performed very well . The report also noted that the new Government had said that they would like to see pension funds used in alternative ways .

The new Government said that they would like to see pension funds used in alternative ways which raised the concern that the fund may have to have yet another reorganisation.

The meeting was also scheduled to note that Councillor Peter Seib wished to step down from being Somerset Council Pension Fund's representative on the Brunel Oversight Board.

Review of administration performance

The committee was scheduled to receive an update on the administration of the pension fund. A report, presented by Alex Thompson from Peninsula Pensions, the company that administers the fund, showed that the fund was performing well against its targets. However, the report also noted that there had been a high number of complaints about the administration of the fund.

Finance and membership statistics update

The committee was scheduled to receive an update on the financial position of the pension fund. A report by the Funds & Investments Manager showed that the fund was in a strong financial position. However, the report also noted that there had been a high level of lump sums claimed on retirement. The report said that this was unexpected and not budgeted for . The report went on to say that this was consistent with employees changing jobs or retiring as a result of the Council’s Voluntary Redundancy programme .

Business plan update

The Funds & Investment Manager was scheduled to present an update to the committee's business plan. The report noted that:

Good progress was being made on the external audit of the Pension Funds’ 2023/2024 accounts and it was expected that the auditors would produce their findings report for Audit Committee meeting on 30 September 2024.

The report highlighted a number of issues that had been identified during the audit, including:

• The implementation of Microsoft Dynamics as the pension funds main general ledger.
• A number of adjusting items to the accounts.

Review of pension fund risk register

The committee was scheduled to review the Pension Fund's risk register.

Independent Investment Advisor's report

Caroline Burton, the Independent Investment Advisor, was scheduled to provide a verbal update on developments in financial markets.