Agenda and draft minutes

There were no declarations of interest made on this occasion.

Resolved – That the minutes of the Meeting of the Pensions Panel held on 8 June 2022 be confirmed and signed by the Chairman.

Tuesday 6 December 2022

Tuesday 7 March 2023

All meetings are scheduled to start at 9.30am at County Buildings, Stafford

·         Tuesday 6 December 2022

·         Tuesday 7 March 2023

All meetings scheduled to start at 9.30am at County Buildings, Stafford unless indicated otherwise.

Report of the Director of Corporate Services

The Deputy Chief Executive & Director for Corporate Services submitted a summary of the performance of the Staffordshire Pension Fund, together with a portfolio of the Fund’s investments, as at 30 June 2022.

The Panel was informed that the Fund had a market value of £6.3 billion at 30 June 2022, down slightly on the previous quarterly valuation. Over the quarter the Fund had returned -6.1%, which was an outperformance of 0.3% versus the Fund’s Strategic Asset Allocation (SAA) benchmark return of -6.4%. The best performing asset class relative to its benchmark was Private Equity. Property and Corporate Bonds were the main detractors from performance during the quarter.

The Panel were informed that, longer term, the Fund had outperformed its SAA benchmark return over a 3, 5 and 10-year period. Annualised returns over 10 years were 9.5% per annum, well above the investment return assumptions used by the Actuary as part of the triennial valuation.

Resolved – That the Pension Fund investment performance and the portfolio of investments for the quarter ended 30 June 2022 be noted.

Report of the Director for Corporate Services

The Deputy Chief Executive & Director for Corporate Services submitted a summary of activity during the quarter by the Fund’s investment managers, in fulfilment of their corporate governance and socially responsible investment obligations. This includes the Responsible Investment (RI) report, including the Climate Stewardship Plan for 2022/23, the Local Authority Pension Fund Forum (LAPFF) Quarterly Engagement Report and the LGPSC Quarterly Stewardship Update.

Panel members were informed that the Stewardship report to comply with the UK Stewardship Code of 2020 was currently being developed. The aim was to have this developed ready for approval at the Pensions Committee meeting in March 2023, so it could be formally submitted to the UK Stewardship Code for sign-off and approval.

The Director highlighted the Climate Change Roadmap as part of the Climate Change Strategy for which the Fund’s carbon metrics would be remeasured at the end of September. It was anticipated that the decision to invest 10% of the Fund into the Legal and General Low Carbon Transition Fund (LCTF) would have a positive impact on the Fund’s requirement to reduce its carbon footprint.

Panel members were presented with the updated Climate Stewardship Plan (CSP) attached to the report at Appendix 1. The CSP working document would be updated for engagement activity carried out throughout 2022/23 with progress reported quarterly. The Director informed the Panel that Officers were engaging with the Fund’s Investment Managers independently to facilitate engagement that needed to be undertaken, not only on climate stewardship but also to understand more about other engagement themes that the managers might be looking at.

The Director highlighted some key engagement activities that had taken place in Q2. These included:

·         Engagement with Shell by JPMorgan and LGPS Central as part of the Climate Action 100+ Group.

·         Discussing working conditions of employees in Mexico and Co2 emissions with a technology company.

·         An escalated engagement with cruise operator Carnival PLC, who pay many employees less than a living wage.

The Director also submitted the quarterly report of the Local Authority Pension Fund Forum (LAPFF) attached at Appendix 2 to the report. This report highlighted the work LAPFF does in engaging with organisations on behalf of its members. Examples of engagement from the last quarter included:

·         The Human Rights initiative which involved a visit from the Chair of the LAPFF to communities affected by the Mariana and Brumadinho tailings dam collapses in Brazil.

·         Meeting with BMW and Mercedes over their approach to decarbonising their vehicles.

·         Joining a collaborative call with Nestle around plastic packaging.

·         Meeting with the Chair of Severn Trent Water, who outlined their commitment to reducing pollution and the release of sewage into waterways.

Finally, the Panel received the LGPS Central Ltd Quarterly Stewardship Report Q1 2022 at Appendix 3 to the report. This report highlighted the work LGPS Central and its appointed voting and engagement partners do in engaging with organisations on behalf of the eight Partner Funds. The Director highlighted that LGPSC had recently developed a Modern Slavery Policy. As a result LGPSC had  ...  view the full minutes text for item 66.

Resolved - That the public be excluded from the meeting for the following items of business which involve the likely disclosure of exempt information as defined in the paragraphs of Part One of Schedule 12A of the Local Government Act 1972 (as amended) indicated below.

The Panel then proceeded to consider reports on the following issues:

(Portfolio Evaluation report for the quarter ended 30 June 2022 attached for information)

Presentation by Hymans Robertson

Report of the Director for Corporate Services

Report (LGPS Central presentation) Attached