Investment and funding
Contents
What does the role of the Committee entail?
The main decisions that members of a pension committee are likely to have to make are listed below:
Agreeing the fund's objectives and investment beliefs
- Monitoring progress of the fund towards its objectives
- Using the beliefs to form the fund's investment strategy
Deciding upon an appropriate investment strategy and structure for the fund
- Considering advice from the investment advisers and the fund's Actuary
- Identifying and managing the fund's key risks
- Setting policy on environmental, social and governance ("ESG") related matters, including climate change
In relation to the management of the fund's assets
- Liaising with the pool on investment options (Border to Coast Pensions Partnership)
- Monitoring performance over time of decisions delegated to other parties
Investment decisions
One of the pension committee's main tasks include setting the fund's objectives and investment beliefs, as set out within the requirements of the Investment Regulations.
Surrey Pension Fund has continued in ground-breaking work with its mapping provider to understand the starting position against the United Nations Sustainable Development Goals (UN SDGs) and how it can further contribute towards these goals.
The Fund opted to use the World Benchmarking Alliance's (WBA) SDG 2000 Benchmark to understand its starting position against the UN SDGs, as the most robust approach in understanding how best to target systematic change with the world's most influential companies.
The companies targeted within the SDG 2000 have the most potential to deliver these goals and become leaders in their sector for others to follow as an example.
Initial findings from the Fund's mapping against the WBA SDG 2000 are summarised below;
- Approximately 63% of the Fund's equity and corporate bond portfolio holdings are also in the WBA SDG 2000 Index.
- The overlap against the WBA SDG 2000 is purely coincidental, but does present an opportunity to focus on these holdings, and how these companies are managed. Improving the management of these companies can allow them to make progress in aligning against the SDGs.
Further information can also be found in our Annual Report.
The Fund has since used this analysis and worked with the Pension Fund Committee to discuss how it can integrate the findings into its Investment Strategy as well as ensuring the SDGs form the foundation of its Investment Core Beliefs.
Some areas in development include:
- Working with its regional asset pool, Border to Coast Pensions Partnership in using its influence to engage with its invested companies.
- Seeking further SDG friendly investment opportunities.
- Developing future Climate Impact (SDG 13: Climate Action) related performance reporting and how it impacts our investments.
We encourage our Members to follow us on this journey, either by contacting the Pension Fund at pension.fund@surreycc.gov.uk or by keeping up-to-date of our upcoming Pension Fund Committee meetings.
The role of the Actuary
The main objective when running a pension fund is to ensure that there are sufficient funds to pay for the benefits as they fall due and contributions are paid at an appropriate level.
The fund actuary will carry out regular actuarial valuations of the fund with the following objectives:
- To comply with legislation (it is mandatory to have an actuarial valuation every three years);
- To monitor the ongoing health of the fund (i.e. is there enough money to pay the pensions);
- To recommend appropriate contribution rates for employers;
- To monitor the actual experience of the fund against the assumptions made