Agenda item

Report of the Director for Corporate Services

The Panel were reminded that, at its meeting on 3 December 2019, they received a briefing paper from Hymans Robertson LLP (Hymans) advising of the findings of the December 2018 report of the Competition and Markets Authority (CMA), and their subsequent Order, in respect of the need for Pension Scheme Trustees to set annual objectives for their investment consultants.

In response to the CMA Order, the Panel agreed a high-level set of objectives with Hymans for 2020/21 which were developed further to incorporate more focussed objectives and detail about how the objectives were to be measured. These objectives were signed off by the Panel at the meeting in July 2021.  

It was agreed that the Panel would assess / measure and report on the performance of the Investment Consultant against the objectives set, by way of a collective annual review.

All objectives, bar one, were fully achieved. The partially achieved objective referred to the “enhancement of arrangements for monitoring implementation of its investment strategy”. It was explained that whilst the Pensions Panel received a quarterly Strategic Asset Allocation update with any potential market impact on the Fund’s strategy highlighted, the intention was to develop an investment dashboard to help focus the Panel on key issues and potential remedies.

One assessment remained outstanding, and the Panel was requested to confirm its assessment of the objective ‘Pensions Committee and Panel are satisfied with the quality, presentation and content of any training requested’. The Panel were in agreement that the level of service and training provided was of a satisfactory level.

It was explained to the Panel that, with regard to the setting of objectives for 2022/23 (included at Appendix 2 of the report), many of the objectives set would remain high level, reflecting the long-term nature of the Fund’s Investment Strategy and they would not change year on year. Following their re-appointment to the role of Investment Consultant, Hymans suggested it would be appropriate to be more specific with the focus of the objectives, and where possible to link them to the workplan for the year ahead.

Two minor proposed changes to the objectives were highlighted but given the workplan for 2022/23 was concerned with the implementation of the recommendations from the Strategic Asset Allocation Review and the Funds’ Climate Change Strategy, these were the only changes to the previous years’ focussed objectives.

RESOLVED – a) That the Panel ‘s concurrence with the view of the Director for Corporate Services; that the desired outcomes from the Investment Consultant Objectives for 2021/22 have been met, where these can be considered in the short term, be noted;

b) That the Pensions Panel agreed that the level of service and training provided was of a satisfactory level in their assessment of the objective ‘Pensions Committee and Panel are satisfied with the quality, presentation and content of any training requested’; and

c) That the Investment Consultant Objectives provided in Appendix 2 to the report be approved, and the specific focus for the 2022/23 financial year be noted.