The report of the Director, West Yorkshire Pension Fund, (Document “M”) provides an update on the continued development of pooling arrangements.

The report also informs the Board of the requirement of the Administering Authority to confirm that the pooling arrangements meet the criteria set out in the November 2015 Investment Reform and Criteria Guidance. Document “M” summarises how those criteria are met by the Northern Pool.

The Pension Board is asked to note the progress on pooling to date, and confirm the pooling arrangements for the Northern Pool meet the criteria set out in the November 2015 investment reform and criteria guidance, in compliance with the statutory guidance to the Investment Regulations.

(Rodney Barton – 01274 432317)

The report of the Director, West Yorkshire Pension Fund, (Document “M”) provided an update on the continued development of pooling arrangements.

The report also informed the Board of the requirement of the Administering Authority to confirm that the pooling arrangements met the criteria set out in the November 2015 Investment Reform Criteria and Guidance. Document “M” summarised how those criteria were met by the Northern Pool.

The Pension Board was asked to note the progress on pooling to date, and confirm the pooling arrangements for the Northern Pool met the criteria set out in the November 2015 investment reform and criteria guidance, in compliance with the statutory guidance to the Investment Regulations.

The pooling criteria require asset pools to achieve benefits of scale; the pools must deliver strong governance and decision making; authorities were to achieve reduced costs and excellent value for money and that authorities were to achieve an improved capacity to invest infrastructure as outlined in Document “M”.

WYPF’s response to those criteria was explained including that in March 2017 there was £42 billion in the pool which more than met the government’s minimum requirement of £25 billion.  

A shadow joint committee, shortly to become a joint committee, had been established to ensure strong governance and decision making.  The committee comprised two members from each fund and three trade union representatives from the regions.  The representatives from WYPF were Councillor Thornton and Ian Greenwood.  A constitution for that body, currently in draft form, was being considered by lawyers and would need to be accepted by the member authorities in May.  Members were advised that the Chair of the shadow committee had, sadly, passed away at Christmas 2017.   Ian Greenwood was to take over that role.

With regard to reduced costs and excellent value for money it was reported that at a recent meeting with the Local Government Association the consensus had been that most pools would set up a company with a budget of £5 million per annum.  The Northern Pool had taken legal advice and was advised that this was not required and would concentrate on saving money on the unquoted investments.  This was because equity and bonds were invested in house at a relatively small cost by WYPF and that Greater Manchester and Merseyside Pension Funds had very large mandates and were already excellent value compared to other authorities. .

In relation to improved capacity to invest in infrastructure it was explained that GLIL, a joint venture between WYPF, Greater Manchester, Merseyside and LPP (a partnership between the Lancashire Pension Fund and the London Pension Authority) had been established to invest in infrastructure.  GLIL had already committed £1.3 billion with £630 million already invested and earning a return.  GlIL would receive Financial Conduct Authority approval shortly.  Members questioned the nature of those investments and were advised that these included very large off shore wind turbines; railway carriages and a large stake in Anglian Water.

The impact of Brexit was questioned and it was explained that GLIL investments were in the UK and that the risk factor of Brexit was reviewed in each project.

Resolved –

That the progress on pooling to date be noted and that the pooling arrangements for the Northern Pool meet the criteria set out in the November 2015 investment reform and criteria guidance, in compliance with the statutory guidance to the Investment Regulations, be confirmed.

ACTION: Director, West Yorkshire Pension Fund.