The report of the Pensions Investment and Responsible Investment Manager is attached, marked 7.

Contact:  Peter Chadderton (07990 086399)

The Committee received the report of the Pensions Investment and Responsible Investment Manager which informed them of corporate governance changes including the government’s latest “LGPS - Fit for the Future” consultation and updates since the last committee together with a review of socially responsible investment issues arising in the quarter period 1st July 2025 to 30th September 2025.  The report also updated the Committee on the latest position in respect of the Palestine Solidarity Campaigns demands.

Members were advised that work was ongoing to reduce the number of appendices in future agenda packs by replacing them with links embedded into the actual report where possible.

It was noted that the Scheme Advisory Board (SAB) was still awaiting a response from central government to their letter on conflict affected areas.  The issue remained a priority and would continue to be monitored, with a more detailed update anticipated at the Committee’s next meeting.  A question was asked regarding whether, once clarification had been received from central government, the Fund’s position on investments in conflict affected areas could be published in advance of the next Committee meeting, noting the level of public interest in the issue.  In response, the Pensions Investment and Responsible Investment Manager confirmed that this would be done and advised that a wider review of the Fund’s website was currently underway to improve transparency and accessibility of key documents, including investment related statements.

Regarding the Local Government Pension Scheme (England and Wales): Fit for the future consultation, Members were informed that since the report had been written, the Pensions Bill which provided the formal legislation for the various changes had cleared through the House of Commons and would now proceed to the House of Lords for consideration.

A question was asked about the security of the defined benefit nature of the Local Government Pension Scheme (LGPS), particularly in light of public commentary suggesting potential future reform.  The Independent Advisor to the Committee explained that, while future legislative changes could not be ruled out, historically, where employers had moved away from defined benefit schemes, this had been achieved by closing schemes to new entrants rather than removing accrued benefits.  Any changes to the LGPS would require national legislation rather than decisions at local authority or pool level.

A question was asked regarding how the Fund could ensure that Shropshire’s responsible investment policies continued to be reflected within LGPS Central, given the increasing number of partner funds within the pool.  It was explained that the Committee would retain responsibility for setting its strategic asset allocation and investment beliefs, which would guide responsible investment within the pool and LGPS Central representatives confirmed that its policies were developed through consultation with its partner funds and that this collaborative approach would continue. 

RESOLVED:

1.     That the position as set out in the report of the Pensions Investment and Responsible Investment Manager in respect of voting and engagement activity be noted and accepted: 

·    LGPS Central at Appendix A/A1;

·      Columbia Threadneedle Investments Responsible Engagement Overlay Activity Report at Appendix B; and

·    LAPFF Engagement Report at Appendix C.

2.     That the Funds update on companies in conflict affected and high-risk areas be noted and accepted.

3.     That the process for responding to the government’s latest Local Government Pension Scheme (England and Wales): Fit for the future consultation be noted and approved.