The report of the Director, West Yorkshire Pension  Fund (WYPF),

Document “N”, reports that in accordance with Local Government Pension Scheme Regulations, costs of managing LGPS pension funds must be charged to the pension fund accounts and not to local authorities’ general fund accounts.

The cost of services reported in the report will be charged to WYPF accounts. The budget proposals in the report will deliver pension administration services to both LGPS and fire services pension scheme members and employers across the UK and will be used to manage over £15bn WYPF investment assets. WYPF service strategy is to maintain service quality and cost performance, not necessarily the lowest cost in all areas, but a balance of cost and performance.

Recommended –

That the projected outturn of £12.68m against budget of £14.85m be noted for 2020/21.

That budget of £15.38m be approved for 2021/22.

That the Government SF3 data - total pension cost per member of £41.94 for 2019/20, making WYPF the lowest cost LGPS scheme for 2019/20, be noted.

(Ola Ajala – 01274 434534)

The report of the Director, West Yorkshire Pension Fund (Document “N”) was presented to the Board in accordance with Local Government Pension Scheme Regulations which stipulates that the costs related to managing LGPS pension funds must be charged to pension fund accounts and not to Local Authority general fund accounts.

It was reported that the latest forecast for expenditure plus the cost of managing the fund was £12.6 million against a target of £14.8 million representing an underspend of £2.7million.  Unfilled vacancies within WYPF remained a key issue and impacted on the figures, however recruitment was progressing.

The cost per member was forecast to be £34 and plans for services had been put in place which were not delivered due to the COVID pandemic but would be brought back on line with the same base budget being proposed for the following year.

A key point from the report indicated that moving from HSBC to Northern Trust would achieve a saving, investment was needed for more IT as well as providing more services and to increase the digital offering to clients. Officers were confident that the service remained cost effective versus other LGPS and the private sector.

Members were then given the opportunity to ask questions, details of which, along with responses, are detailed below:

·         Officers were asked whether the COVID pandemic had affected services provided.

·      It was confirmed that services continued to be provided including payments, servicing memberships both in and out of the scheme and were fully compliant with submitting returns.  Employers were supported with issues and guidance throughout.  Only face to face meetings were unavailable and the contact centre was available via telephone and email.  They also stated that staff had moved to working from home and had worked hard and shown flexibility.  Whilst there had been operational savings, equipment was provided to facilitate this.

·         Services had continued to be provided to partners and pension fund members throughout the pandemic and Officers were asked how this had been possible, especially in light of unfilled vacancies.

·      In response, it was advised that staff had undertaken extra hours and extra work and that the vacancies that existed did so before the pandemic and were as a result of a proposed re-structure and continuation of the existing service was the priority.

·         A Member proposed that a report be commissioned into divestment in fossil fuel companies and requested that funds be made available in the budget to facilitate this.  During the discussion it was confirmed that a review of investment strategy was already underway and that it was not appropriate to make such a proposal as it was not within the remit of this Board to do so.  It was also confirmed that funds were available to undertake the review and provide a separate report if required.  Following a vote amongst Members a resolution on the matter was reached (please see resolution 4 below)

·         A Member raised a concern that the budget was due to be increased next year and asked whether the saving from this year would be rolled forward.

·      Officers advised that savings were due to unfilled vacancies as the team was under resourced.  The new staff structure needed to be implemented and the appropriate staff needed to be recruited.  There was no risk of a ‘double budget’ and only what is spent is charged to the account.

Resolved –

1. That the projected outturn of £12.68m against budget of £14.85m be noted for 2020/21.

2. That budget of £15.38m be approved for 2021/22.

3. That the Government SF3 data - total pension cost per member of £41.94 for 2019/20, making WYPF the lowest cost LGPS scheme for 2019/20, be noted.

4. That additional funding of up to £50,000 be made available in the budget to the Investment Advisory Panel to commission a report on divestment in fossil fuel companies should the Investment  Advisory  Panel deem that it is required.

Action: Director, West Yorkshire Pension Fund