Agenda item

Report FSD23060

The report provided a summary of the investment performance of Bromley’s Pension fund in Quarter 1 of the 2023/24 financial year and included information on general financial and membership trends of the Pension Fund as well as details of key developments in the Local Government Pension Fund (LGPS) expected during the next five years.

In introducing the report, the Chairman noted that the Bromley Pension Fund’s tactical asset allocation continued to deviate from the Strategic Asset Allocation Benchmark in being overweight in equities and it was proposed to undertake further rebalancing in the form of transferring 5% or £65M from the Baillie Gifford Global Equity Portfolio that was currently managed through the LCIV into a Short-Dated UK Corporate Bond fund managed by Fidelity.  This proposal was supported by Members, although a Member underlined that should the transfer be agreed, the effect of this in rebalancing the Strategic Asset Allocation would mean there was no need to revise the Strategic Benchmark which was a subsequent recommendation of the report.  It was also recommended to work with Fidelity on the costs and benefits of moving the Fund’s fixed interest investments to a single segregated portfolio and should this be supported by Members, an update on this work would be provided to the Committee at its next meeting on 6 December 2023.  It was also planned to revisit the Strategic Asset Allocation benchmark at the next meeting of the Committee and a Member suggested that consideration be given to disinvest from multi-asset income funds at that time as the increase in interest rates in recent months had made equity and bond funds a more attractive investment option.

With regard to other matters, the Chairman was pleased to note that progress had been made in implementing the Member Self-Service Pensions Portal and I-Connect (Employer) Portal and that the Member Self-Service Pensions Portal was scheduled to go live to deferred and active Pension Fund Members in October 2023.  The Chairman also flagged that a Government consultation was anticipated on the potential removal of the age limit of 75 years for death grant lump sums as such a rule was now considered discriminatory and further updates would be provided to the Committee when available.

Councillor Simon Fawthrop moved that the proposal to switch 5% or £65m from the Baillie Gifford Global Equity Portfolio currently managed through the LCIV into a Short-Dated UK Corporate Bond fund managed by Fidelity be approved alongside the other report recommendations, excluding the recommendation seeking a revision of the Strategic Benchmark.  The motion was seconded by Councillor Simon Jeal, put to the vote and CARRIED unanimously.

RESOLVED: That:

·  The contents of the report and appendices be noted.

·  The recommendations in Appendix 5 be agreed as shown below:

i)  To switch 5% or £65m from the Baillie Gifford Global Equity portfolio currently managed through the LCIV into a Short-Dated UK Corporate Bond fund managed by Fidelity;

ii)  Agree to follow up with Fidelity the costs and benefits of moving the Fund’s fixed interest investments to a single segregated portfolio; and,

iii)  Agree the cash management arrangement as highlighted in the Apex report.

·  Appendix 6 which set out the key developments in the Local Government Pension Fund expected during the next five years be noted.