The Chair welcomed everyone to the meeting.

Applogies were noted as above.

The Director informed members that Councillor Trevor Smith had resigned from his position as a member of the Authority, Barnsley MBC will appoint a replacement at their next full Council meeting.

To determine whether there are any additional items of business which by reason of special circumstances the Chair is of the opinion should be considered at the meeting; the reason(s) for such urgency to be stated.

None

To identify where resolutions may be moved to exclude the public and press.  (For items marked * the public and press may be excluded from the meeting.)

Members noted that items 20 and 21 would be considered in the absence of the press and public. 

Gillian Taberner (Assistant Director – Resources) and William Goddard (Head of Finance & Performance) declared an interest in item 9 and would leave the room whilst the item is considered.

Cllr Dunn advised that a Motion at Sheffield City Council was debated and passed the previous day, and the Authority will receive the feedback from this meeting in due course. The only action raised for SYPA in the motion had already been completed so there is nothing further to add.

RESOLVED: Members agreed that the minutes as presented for the Authority Meeting held on 05 June 2025 were a true and accurate record.

Questions were received from Mr Ashraf, Ms Smith, Mr Cross and Mr Burnham. The Director replied on behalf of the Authority.

Written copies of the questions and the responses were given to the questioners and are attached as appendix to these minutes.

The Director presented a report seeking approval of the appointment of an individual to perform Statutory Officer functions and to address consequential human resources issues and the impact of the national pay award on the Authority’s pay and grading structure.

RESOLVED: Members

1. Approve the appointment of Gillian Taberner as Head of Paid Service and Clerk with effect from 19^th December 2025.
2. Approve the arrangements to set out in para 5.4 for interim cover for the role of Assistant Director – Resources pending a permanent appointment to the role.
3. Approve the arrangements of the appointment of permanent Assistant Director – Resources set out in para 5.6.
4. Approve the appointment of William Goddard as s.73 (Chief Finance) Officer with effect from 1^st October 2025 until the appointment of a permanent Assistant Director – Resources.
5. Approve the setting of Grade M at £93,559 - £102,865p.a. following the local government national pay award and the consequent setting of pay packages for staff at Grade M greater than £100,000.

The Assistant Director – Resources presented the Quarter 1 Corporate Performance Report for 2025-26, noting that this is the first quarter reporting on the new Corporate Strategy that was approved by the Authority in February.

The Assistant Director – Investment Strategy provided an update on the Investment Performance, noting that a separate report for this quarter was not included in the agenda due to the recent transition to a new custodian, which led to some inevitable teething issues. A slimmed-down version of the report will be made available in the online reading room for members in due course and normal reporting procedures will resume from next quarter.

The Head of Finance and Performance provided an update on the budget outturn, noting that there was a forecast £247k underspend, some of which will be used towards costs associated with clearing the backlog in pensions administration. The prime driver of the underspend was employee costs, including the pay award which was budgeted at 4% but was now confirmed at 3.2%; alongside some recruitment delays and the Director transition which has had a knock-on effect.

Members probed about the risk relating to clearing the backlogs, asking that if we are not able to meet the current target what will be a realistic timeline for clearing the casework. The Assistant Director – Pensions responded that we hope to have it cleared by March next year based on current clearance rates and will be keeping a very close eye on it.

Members further questioned whether there was a published timeline for the Investment Strategy Statement and consultation arrangements.

The Director responded that there will be engagement with elected members in the period leading up to March 2026, before it is brought to the Authority for approval. Further to this we are obliged to consult with those who have an interest in the strategy.

Members requested an update on the procurement for the Local Affordable Housing Mandate Manager and how this will interact with local authorities.

The Assistant Director – Investment Strategy updated that we are expecting responses from managers who are continuing in the process and the assessment day is scheduled to take place in two weeks' time. During this session, there will be detailed discussions and scrutiny. As part of these discussions, we will also be looking to understand how the managers plan to engage with local authorities.

Members sought further explanations in relation to the risk register section of the report; with questions relating to the increased risk of cashflow imbalances as a result of anticipated reduction in employer contributions income, and about the risk relating to Border to Coast strategic plan and expansion.

The Director explained that there would be a post-lunch briefing session from the actuary to provide further details regarding the valuation results and implications for employer contribution rates. He also noted that the Assistant Director – Investment Strategy will work with the investment consultants to assess the investment income needed to bridge the cashflow gap between contributions and pension  ...  view the full minutes text for item 10.

Aoifinn Devitt, Independent Investment Adviser, presented the Market Commentary Report for members to consider and note.

Members sought the Independent Advisers’ opinions on equities, given how high they are at present, asking if the bubble is at risk of bursting and does she anticipate a financial crash.

Aoifinn Devitt commented that recent events such as the regional banking issues and the challenges in the commercial property sector have not yet resulted in a market crash. Financial institutions today are generally more robust, better regulated, and more prepared to intervene when needed.

As a result, it is increasingly difficult to identify a single trigger for a major downturn. Rather than a sudden "big bang" crash, any future correction is more likely to be a slow burn, as a large-scale sell-off would be required to cause significant disruption, something she does not currently foresee.

Regarding equity markets being overvalued, the Adviser noted that this is true to some extent. The technology sector appears overvalued, with many stocks trading at unsustainable levels well above the normal levels, however the broader market does not reflect the same trend.

Much of the non-tech sector appears fairly valued or even undervalued, therefore she recommends rebalancing the portfolio by reducing exposure to technology and U.S. equities and increasing allocations to other regions and sectors.

Jonathan Hunt added that while the media noise can make short-term issues feel more significant, SYPA as a pension fund maintains a long-term investor perspective. As long-term investors we must remain focused on our objectives and be prepared to ride out any short-term volatility along the way.

RESOLVED: Members noted the report.

The Assistant Director – Investment Strategy presented the Investment Strategy Review report to update the Authority with the recommendation to agree the scope for the planned review.

Noting that Hymans Robertson have been appointed as consultants for this project. The key output of the review will be the Investment Strategy Statement, and this would determine the long-term asset allocation for the coming years until the next valuation cycle.

Members probed whether the Responsible Investment Survey will inform this and to what extent will scheme members’ non-financial interests be considered.

The Assistant Director – Investment Strategy responded that this is one of many factors that will be considered, but the focus will be on high-level strategic issues such as climate change and the route to net zero.

It was noted that some scheme members views are often nuanced and may not be fully representative or directly applicable when considering decisions at such a macro level such as in relation to specific stocks.

The Director added that scheme members’ views from the survey will also inform the Responsible Investment Framework, which will come to the Authority in March as it does every year.

A Member commented that while climate change is recognised as the biggest risk to the portfolio, it appears contradictory to suggest that the 2030 target may not be achievable.

The Assistant Director – Investment Strategy responded that in an ideal world we would move as quickly as possible towards our net zero goals, however, the necessary investment opportunities remain limited, as many companies have not progressed fast enough.

Currently, only a minimal number of companies are aligned with a 2030 net zero target, and we do not want to reduce our portfolio from 30 holdings to just two to meet that timeline.

We will therefore review our current allocation and assess the likely timeline for achieving net zero.

The focus will be on identifying whether there are realistic portfolios we can construct that will allow us to reach our goals and achieve real world impact within a reasonable and achievable timeframe.

RESOLVED: Members agreed the scope of the Investment Strategy Review as set out in the body of the report.

The Assistant Director – Investment Strategy presented the Q1 Responsible Investment Update and informed Members that on a question raised at the last meeting regarding holdings in Israeli government bonds and engagement on conflict-related risks, a written response has been provided directly to the Authority Member and a brief update on this was shared in the meeting.

The Assistant Director – Investment Strategy updated that the bonds held by PIMCO within the Border to Coast Multi-Asset Credit Fund, are not a restricted investment and we have been engaging with Border to Coast to understand the rationale behind PIMCO’s decision, especially in relation to ESG risks. Adding that PIMCO stated the investment was made prior to the conflict, based on Israel’s then-strong credit rating and economic fundamentals.

They confirmed they monitor conflict-related risks, which have since put downward pressure on ESG indicators. However, we are not fully satisfied with their responses and have asked further questions, particularly around whether Israel’s ESG rating has moved to the lowest tier.

Additionally, Border to Coast have rolled out a new tool to improve risk oversight and engagement with managers. This is currently being used with equity managers, with fixed income managers like PIMCO to follow after their next review.

The Assistant Director noted that officers appreciate Border to Coast’s continued efforts to follow up, though the process has been slow, we remain actively engaged and will update on further developments, including related conflict-area engagements.

Rachel Elwell added that Border to Coast welcome the challenge and engagement with her team, who share these same frustrations. Rachel will continue to engage with PIMCO and their senior leadership team to seek answers and express their frustrations, as they are not receiving the external transparency they expect from investment managers.

A concern was raised around the timeliness of receiving answers and the frustration in the responses received from PIMCO, alongside their rationale in decision making back in 2024 given the political direction of travel at the time.

The Assistant Director – Investment Strategy responded that he is seeking to understand a further level of detail as they already mentioned the downward pressure on ESG ratings.

We want to understand what those ratings were at the time of the initial investment, particularly as they have since invested in more of these bonds, to assess whether the ESG ratings have moved and what the threshold would be for a government entity to become un-investable. While there are no sanctions against Israel in the same way there are with Russia, it's difficult to engage in the next level of debate without clarity on the underlying decision-making process.

Rachel Elwell also assured members that she will follow up, and highlighted that unlike the Russia case, the lack of clear international consensus makes this a more complex and nuanced investment decision, particularly as the bonds remain liquid and performing. She will personally take this forward and respond once she has further clarity from PIMCO’s senior leadership team.

RESOLVED: Members noted the report.

The Assistant Director – Pensions presented a report to update the Authority on the Pensions Administration Improvement Plan.

Members probed around whether we have any idea on the software provider’s timetable to implement the functionality needed to address all the elements in the McCloud Remedy which need to be applied to scheme members.

The Assistant Director – Pensions responded that a plan is being pulled together outlining the key elements to assess if the latest development is successful. While we can't set a timetable yet, we're identifying all potential actions to be ready when we can. With the McCloud implementation extended to August next year, we're hopeful we can comply. The current functionality should support much of the rectification work however we cannot yet estimate how much will require manual intervention so the testing will clarify this.

Members sought assurance that we were not the only pension fund awaiting these software updates and asked when we will know if the August target is unachievable.

The Assistant Director – Pensions responded that many other pension funds using the same software are in the same position and that she is hopeful that the latest delivery will allow us to understand the scale of the work by the end of September.

RESOLVED: Members

1. Noted and commented on the 2025/2026 plans for Administration improvement that are in place.
2. Agreed the Data Quality Improvement Plan 2025/27 at Appendix A.
3. Agreed the Dashboard Matching Criteria Policy at Appendix B.

The Assistant Director – Pensions presented an Administration Policy Update to update members on changes required to the core Funding Strategy Statement, Policy (J) Academy Funding, and Policy (L) on Prepayments in line with the 2025 triennial Valuation to comply with Regulation 58 of the Local Government Pension Scheme Regulations 2013.

The Pension Administration Strategy and the Breaches Procedure also required updating and there is need to introduce a Complaints Procedure.

RESOLVED: Members

1. Agreed the Funding Strategy Statement, Academy Funding Policy and the Prepayments Policy be updated in line with this report, as shown in Appendix A
2. Agree with the Pensions Administration Strategy at Appendix B
3. Agree with the Complaints Procedure at Appendix C
4. Agree with the Breaches Procedure at Appendix D

The Chair of the Local Pension Board, Riaz Nurennabi presented the Summary of the Local Pension Board Report.

This report is a means of continuing to grow the relationship between the Board and the Authority and to provide an update on matters discussed at the Board and work they are doing with officers and the Authority to ensure compliance with regulations and legislation.

It was noted that the pensions administration software provider has been invited to the Members Away Day in November to allow members to have a constructive discussion with them around the quality and timeliness of their delivery of the software for the McCloud Remedy work.

RESOLVED: Members

1. Noted the content of the report.
2. Make any recommendations to the Local Pension Board if required.

The Head of Governance and Corporate Services provided members with an update on current governance related activity and regulatory matters.

RESOLVED: Members noted the updates included in the report.

The Assistant Director – Resources presented the progress update on the Independent Governance Review Action Plan.

It was noted that most actions on the plan are completed or in progress, the one main action that isn’t yet progressed is around starting a project to review report templates and consistency, which was delayed due to workload pressures and lack of staff capacity. This project will now commence from next month, with a new target date of June 2026.

RESOLVED: Members noted the updates and progress against the Independent Governance Review Action Plan.

The Head of Governance and Corporate Services presented the report on decisions taken as a matter of urgency between meetings of the Authority.

To note, two decisions have been made since the last meeting which are noted within section 5.3 and 5.7 of the report.

RESOLVED: Members noted the decisions taken between meetings of the Authority using the urgency procedure.

The Assistant Director – Investment Strategy presented the Annual Review of Border to Coast 2024/25 to update the Authority on the review which encompasses both the company itself and the wider partnership.

RESOLVED: Members noted the content and conclusions.

The Director presented an update on pooling to consider the Authority’s stance in relation to the admission of further funds to the Border to Coast Pensions Partnership as a result of the Government’s Fit for the Future process.

RESOLVED: Members

1. Agreed that the funds identified in para 5.2 should be supported to become members of the Border to Coast Pensions Partnership.
2. Note the Heads of Terms for admission of new partners set out at Appendix B which will form the basis on which the admission of new partners is negotiated.
3. Note the intention that SYPA offer to relinquish the role of Secretary to the Joint Committee as part of the approach to signifying the start of a new partnership.
4. Authorise the Director to cast the Authority’s shareholder vote in support of the admission of the named funds as shareholders in the operating company and in support of any other shareholder resolutions, including, but not limited to, for the issue of further shares, necessary to facilitate this process.
5. Authorise the Head of Governance and Corporate Services to sign and attach the Authority’s seal as necessary to the legal agreements needed to give effect to these decisions, including but not limited to the Shareholder Agreement and Inter-Authority Agreement.

Cllr Alexi Dimond abstained. 

Public Questions – 4 September 2025

Question 1 – Mr Ashraf

As-Salaam Alaikum, 

Good Morning Chair, Councillors and Officers,

My question concerns SYPA’s fiduciary duty and its alignment with the urgent need to divest from entities complicit in Israel’s violations of international law in Palestine. Recent disclosures confirm SYPA holds £118 million in arms manufacturers (including BAE Systems and Rolls-Royce) and £4.8 million in Israeli investment, of which £1.9 million comprises Israeli government bonds, initiated in 2024 amid the International Court of Justice’s genocide investigation. These investments directly contradict SYPA’s Responsible Investment Policy, which mandates investments to "do no harm. Yet, SYPA has consistently cited fiduciary duty and operational constraints within the Border to Coast Pensions Partnership (managing 80% of SYPA’s £11bn fund) as barriers to divestment. I argue this interpretation is legally incomplete, financially unsound, and ethically indefensible.   

Fiduciary Duty Encompasses More Than Short-Term Returns, SYPA’s narrow view of fiduciary duty ignores material risks:   

Reputational & Legal Liability: Continuing investments in companies implicated in war crimes (e.g., BAE Systems’ provision of F-35 jets used in Gaza) exposes SYPA to legal challenges under international law, including the Rome Statute which is applicable via the United Kingdom's International Criminal Court Act of 2001. The UN has explicitly called on states to sever economic ties with Israel, noting complicity risks.   

Member Sentiment: SYPA has no mandate for investing members' money in companies profiting from genocide or Israeli government bonds. The 7,000 strong petition (including signatures of over 700 scheme members) collected in a short space of time along with recent polling of the UK general public supporting an arms embargo and sanctions on Israel (https://palestinecampaign.org/polling-reveals-huge-public-support-for-arms-embargo) strongly suggests that members would oppose these investments. SYPA has recently also conducted a survey of its scheme members, which it is yet to publish fully, but which may further demonstrate member sentiment. SYPA has a fiduciary duty to take account of the views and interests of members, some of whom may have been harmed morally or directly through these investments.  

Precedents: Councils like Manchester, Bristol, and Islington have divested from similar assets, proving fiduciary duty accommodates ethical divestment.   

Pooling Arrangements Are Not Absolute Barriers. SYPA claims divestment requires unanimous agreement from all 11 Border to Coast funds. However, this misrepresents options:  

Segregation of Assets: SYPA can work with Border to Coast to create exclusion-led pooled funds or segregate contentious assets for phased divestment. Other pools (e.g., Brunel) have engineered such solutions for climate goals.   

Leverage as a Major Investor: As part of a £64bn pool, SYPA holds influence to demand ethical screens. Withholding further investments until exclusion policies align is a legitimate fiduciary tool.   

Divestment of Directly Held Assets: SYPA retains control over 20% of its portfolio (£2.2bn), including Israeli bonds. Divesting these immediately is wholly within SYPA’s power.   

Financial Stability Supports Principled Action SYPA’s funding level stands at 159–160%—far above liabilities. Arms investments constitute just 1% of total assets (£118m). Divesting this fraction poses no material  ...  view the full minutes text for item 22.