Agenda and minutes

There were no declarations of interest on this occasion.

Resolved: that the minutes of the meeting of the Pensions Panel held on 5 September 2023 be confirmed and signed by the Chairman.

·       Tuesday 5 March 2024

·       Tuesday 4 June 2024

·       Tuesday 3 September 2024

·       Tuesday 3 December 2024

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

·       Tuesday 5 March 2024, 9:30am – Oak Room, County Buildings

·       Tuesday 4 June 2024, 9:30am – Oak Room, County Buildings

·       Tuesday 3 September 2024, 9:30am – Oak Room, County Buildings

·       Tuesday 3 December 2024, 9:30am – Oak Room, County Buildings

Members were also reminded of the requirement to complete Hymans online LGPS Knowledge Progress Assessment 2023 by the 18 December 2023.

Resolved: That the dates of the future Pensions Panel meetings be noted.

Report of the Director of Finance   

The Director of Finance submitted a summary of the performance of the Staffordshire Pension Fund (the Fund), together with a portfolio of the Fund’s investments as at 30 September 2023.

The Panel heard that over the quarter the Fund had generated a return of -0.46%, underperforming the strategic benchmark return of 0.42% by -0.88%.

Infrastructure was the highest performing asset class over the quarter, whilst Index Linked Gilts generated the largest negative return due to continuing high inflation and increasing interest rates.

The Fund had a market value of £6.744 billion as of 30 September 2023, a decrease of £0.002 billion since 30 June 2023.

A copy of the Staffordshire Pension Fund’s portfolio of investments at 30 September 2023 was attached at Appendix 1 to the report.

Resolved: That the Pension Fund investment performance and the portfolio of investments for the quarter ended 30 September 2023 be noted.

Report of the Director of Finance

The Director of Finance submitted the Responsible Investment and Engagement Report to the Panel, which included the Climate Stewardship Plan for 2023/24, the Local Authority Pension Fund Forum (LAPFF) Quarterly Engagement Report, and the Local Government Pension Scheme Central (LGPS Central) Quarterly Stewardship update.

The Panel were informed that the Fund’s Climate Change Strategy would be updated and presented at the Pensions Committee meeting taking place in March 2024. There had been some rebasing of data in the portfolio and additional work would be undertaken with LGPS Central to determine latest progress against the targets that had been set.

The Panel heard that, with regards the Climate Stewardship Plan, there had been very little engagement over the quarter which was highlighted as a source of disappointment - this had also been raised with LGPS Central directly. The Panel were told that LGPS Central had appointed a new Stewardship Manager, and, whilst it was acknowledged that engagement would always take time to generate positive results, the importance of having examples of the difference engagement had made had been highlighted, and it was hoped that improvements would be seen in the future.

Following a request from Councillor Greatorex at the September Pensions Panel meeting for more information relating to the application of the Transition Pathway Initiative (TPI) framework, it was explained that it was difficult to provide a succinct response due to the size and complexity of the TPI database.  Following some research carried out by Fund Officers it had been determined that there were two elements: Management Quality, where the score assigned to an organisation was derived following the completion of a number of questions and Carbon Performance which referenced public data around the organisation’s alignment with the Paris alignment. Fund Officers were still trying to establish how LGPS Central used the information, and it was suggested that a training session be delivered in 2024 that focussed on stewardship and engagement and covered this subject.

LAPFF had continued to engage with several organisations regarding their human rights practices and had also established a new mining company engagement with Grupo Mexico. LAPFF had also met with the Chair of Severn Trent on the reputational risks from the use of storm overflow drains which were discharging sewage into waterways, and discussions had taken place with the Chair of house builder Taylor Wimpey to consider the company’s approach to climate change.

During the last quarter LGPS Central had launched a proprietary tool for tracking engagement activities, including advocacy type engagements. The tool would track progress against engagement Key Performance Indicators. Examples of engagement from the last quarter included meetings with Société Générale and Ansell Ltd.

The Panel was informed that, at the request of Partner Funds, LGPS Central had undertaken a review of its Stewardship Themes, as the current Themes had been in place for several years. LGPS Central had proposed four ‘macro’ Stewardship Themes that incorporated several more detailed areas within them. It was explained that the four Themes were more aligned to  ...  view the full minutes text for item 127.

The Chairman to move:

‘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 1 of Schedule 12A of the Local Government Act 1972 (as amended) indicated below’.

Part Two

(All reports in this section are exempt)

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 paragraph 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:

Presentation by Hymans Robertson

Portfolio Evaluation report for the quarter ended 30 September 2023 attached for information.

A presentation from Hymans Robertson

Report of the Director of Finance   

A presentation from LGPS Central