Agenda item

NORTHERN (LGPS)

The report of the Director, West Yorkshire Pension Fund, (Document “F”), advises members that, in accordance with the guidance from Government, West Yorkshire Pension Fund (WYPF) together with Greater Manchester and Merseyside are working towards the creation of an investment Pool, Northern LGPS (NLGPS).

 

The report sets out the progress in establishing the Northern LGPS (formerly the Northern Pool), covering:-

 

·           Drafting the Northern LGPS Operating Agreement, including the Terms of Reference for the Joint Committee

·           Procuring a joint custodian for all the assets of NLGPS

·           Developing the GLIL Infrastructure vehicle (including FCA regulation to facilitate it becoming the national LGPS vehicle for infrastructure investment)

·           Developing a joint private equity vehicle.

 

Recommended-

 

That the progress to date, and the response to the Ministry of Housing, Communities and Local Government on the limited informal consultation in respect of revised statutory guidance on investment pooling, be noted.

 

(Rodney Barton – 01274 432317)

Minutes:

The report of the Director, West Yorkshire Pension Fund, (Document “F”), advised members that, in accordance with the guidance from Government, West Yorkshire Pension Fund (WYPF) together with Greater Manchester and Merseyside were working towards the creation of an investment Pool, Northern LGPS (NLGPS).

 

The report set out the progress in establishing the Northern LGPS (formerly the Northern Pool), covering:-

 

·           Drafting the Northern LGPS Operating Agreement, including the Terms of Reference for the Joint Committee

·           Procuring a joint custodian for all the assets of NLGPS

·           Developing the GLIL Infrastructure vehicle (including FCA regulation to facilitate it becoming the national LGPS vehicle for infrastructure investment)

·           Developing a joint private equity vehicle.

 

Members were advised that between the January and March meetings the decision had been taken to change the name to Northern LGPS which identified the pool more clearly with the LGPS and avoided confusion which may have arisen from use of pool in the name. 

 

It was also explained that, at the Shadow Joint Committee meeting on 28 March, Councillor Doughty (Merseyside Pension Fund) had resigned as Chair as he was not standing for office in the forthcoming election.  Councillor Ged Cooney (Greater Manchester Pension Fund) had subsequently been elected Chair.

 

The latest report on performance and cost was provided and demonstrated that NLGPS was low cost compared to its peers. 

 

The four criteria which asset pools were required to achieve were reported.  Those were achieving benefits of scale; delivering strong governance and decision making; achieving reduced costs and providing excellent value for money and an improved capacity to invest in infrastructure.  It was confirmed that the Northern LGPS had a clear plan to deliver on those criteria.

 

Document “F” reported that the Ministry of Housing, Communities and Local Government (MHCLG) had begun an informal consultation on statutory guidance on pooling.  The guidance differed considerably from the current guidance and if implemented removed the criteria set in 2015 and in particular the requirement to deliver improved value for money and lower costs.  The NLGPS had submitted a response to the consultation making it clear that while it fully supported the criteria set in 2015 many aspects of the revised guidance were at odds with elected Members duties to local council tax payers and would not achieve the policy objectives of asset pooling.  The key concerns raised in the report were provided.

 

As the issues raised were so wide and far reaching the opinion of Jason Coppel QC had been sought. The response to the MHCLG; the covering letter to QC Opinion and QC Opinion were appended to the report.

 

In response to questions it was explained that there could be a situation where costs incurred to fix another fund’s portfolio would be charged to the NLGPS.  All funds in a pool could be made to share the costs of others.

 

Members raised concerns that their fiduciary duty to members of the WYPF could be compromised if they were forced to subsidise other funds. 

 

Resolved –

 

That the progress to date, and the response to the Ministry of Housing, Communities and Local Government on the limited informal consultation in respect of revised statutory guidance on investment pooling , be noted.

 

ACTION:       Director, West Yorkshire Pension Fund

 

Supporting documents: