The Chair welcomed everyone to the meeting.

Apologies were noted as above.

The Chair noted that this was George Graham’s final meeting as the Director of the Authority, as he is retiring today. The Chair thanked Mr Graham on behalf of the Authority for his dedication, loyal service and highly successful leadership of the organisation since February 2018, and noted the positive and lasting legacy that he will leave behind, not just at South Yorkshire Pensions Authority, but also for the wider LGPS.

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.)

None

None

None

RESOLVED: Members agreed that the minutes as presented for the Authority meeting held on 04 September 2025 were a true and accurate record.

Questions were received from Ms O’Gara, Ms Dale, Mr Pearson 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 an appendix to these minutes.

The Assistant Director – Pensions presented the Funding Strategy Statement to secure approval, noting that the policy has been updated to encompass the statutory guidance and assumptions and considerations in the 2025 Valuation, this came as a draft in September and has since been out to a full consultation with employers. Four employers responded to the consultation, engaged with the process and have confirmed they accept the policy.

A question was raised regarding the statement made that ‘when considering climate scenario stress tests, the Fund appears to be generally resilient to different climate scenarios, with generally modest impacts versus the base case modelled’. The member asking this question argued that given we are heading towards catastrophic climate change, the term modest felt questionable.

The Actuary explained that two types of climate related testing are carried out: standard stress tests, which assess a range of possible scenarios, and additional modelling of extreme downside climate risks. The results of additional modelling on catastrophic events provide a broader perspective and will be available in the Valuation reports.

The Director advised that more detailed analysis will be published in the online reading room for Members and on the website, alongside the more detailed Valuation report.

Members asked whether the Gender Pensions Gap reporting had started and to what extent there would be further involvement and discussion on this at Authority meetings.  

The Actuary responded that gender pensions gap reporting may soon become mandatory within the Valuation report. Whilst final guidance on requirements for this is still awaited, early indications are that it will cover active and retired members across the Fund and may break results down by employer groups, looking at gender mix, salaries and pension types to produce an overall gap. The aim is to give members and employers clearer insight.

The Assistant Director – Pensions further added that initial data from the system is already starting to be collected on this and reported to the Local Pension Board. In addition to this, as part of aiming to take actions in respect of gender pensions gap, the plan is to target communications to different age groups of active members to provide them with the opportunity to help improve their forecast benefits.

Members commented that they found this useful and considered it good practice.

The Director commented that as a Fund, our ability to influence the gender pensions gap is limited, given that it is largely driven by the gender pay gap and wider societal factors, that we cannot solve it alone. Good practice can be promoted within the scheme, and upcoming government rule changes should help women maintain more consistent contributions and build up pension benefits, though the impact will be modest. The wider issue remains significant, but it’s something we take seriously and continue to work on.

A Member commented that this was the most encouraging Funding Strategy Statement he had seen in his 19 years of tenure. Further asking what more could be done to ensure that our successors can have  ...  view the full minutes text for item 9.

The Assistant Director – Pensions presented the Fund Actuary’s report on the outcome of the 2025 Valuation to seek approval on the employer contribution rates for the 3 years from 2026/27 set out in the rates and adjustments certificate, referencing Members to points 5.2-5.3 of the report which summarises at the position as of 31^st March 2025 regarding fund assets, liabilities, funding level and average contribution rates.

Steven Scott, Greer Flanagan and Reece Notman, the Fund’s actuaries from Hymans Robertson, presented the results of the Valuation to Members.

Independent Investment Adviser, Aoifinn Devitt raised questions around how higher return expectations fit with the investment outlook and raised her concern about the ‘higher for longer’ view expressed in the report.

The Actuary replied that investment consultants use the same core modelling assumptions that the actuaries use for Valuations whilst also considering the additional factors that Aoifinn mentioned. Contribution rates aren’t set directly from the funding level, otherwise many employers would have a nil rate. Instead, the modelling allows for future yield changes, with central assumptions of around 3% nominal yields over the next 20 years. The Actuary recognises that today’s strong funding levels may not persist, which is why a prudent approach is taken when setting employer contributions.

The Director added that a floor has been set on employer contributions based on what’s needed to fund future benefits accrual. This protects against the risk Aoifinn identified and without it, employers would face much sharper increases.

Members noted that past performance doesn’t guarantee future returns and sought assurance that our assumptions aren’t based solely on historical results, and there is confidence that even if returns fell to 4.2% or lower, the Fund would still be able to meet its obligations.

The Actuary noted that they must report on the funding level every three years, which gets a lot of attention but is highly sensitive to market conditions. Higher expected returns are boosting the funding level at this Valuation; however, the required return is a much more stable measure at 3.5% which is unchanged from the previous Valuation, and it isn’t affected by short term market movements.

RESOLVED: Members

1. Noted the results of the 2025 Valuation carried out by the Fund Actuary set out in the report at Appendix A.
2. Approved the employer contribution rates set out in the rates and adjustments certificate to apply for the three years starting 1^st April 2026.

The Acting Assistant Director – Resources presented the Quarter 2 Corporate Performance Report for 2025-26. Members were informed that the clearance of the backlog is progressing, however the deadline has been extended to March 2026. Additionally positive progress is being made on the transition of legacy assets to Border to Coast with an extended target date of June 2026.

The Independent Investment Adviser, Jonathan Hunt raised that with significant pooling changes coming down the track, it is important to monitor the progress of integrating the new partner funds whilst managing the risk to ensure that this does not distract Border to Coast from their ‘day job’ of managing the Fund’s assets.

The Director responded that this is a dimension of two risks in the risk register; the Pensions Review and Border to Coast’s Strategic Plan, noting that so far, the day-to-day business alongside integrating the new partner funds is working in parallel providing us with a reasonable degree of confidence, however this will continue to be monitored.

The Director Designate added that at the next risk register review, following further developments on the Pension Schemes Bill and once all legal documentation for incoming partner funds has been completed, we will consider revising and updating these two risks to reflect the evolving situation and ensure that the associated mitigating actions are sufficient and appropriate in recognition of this issue.

Members queried the discrepancy on the Funding Level within the Corporate Performance Report compared to the Valuation report presented at this meeting.

The Director advised that the funding level monitoring tool used to gather this data has not been updated at a member level for the 2025 Valuation and instead reflects a roll-forward estimate based on the 2022 Valuation data. This is due to be updated to the 2025 Valuation basis in January.

RESOLVED: Members noted the report.

The Acting Assistant Director – Resources presented a report to seek approval of the Levy for 2026/27 under the Levying Bodies (General) Regulations 1992.

RESOLVED: Members approved a total levy of £251,566.00 for 2026/27 in accordance with The Levying Bodies (General) Regulations 1992, to be allocated to the District Councils in proportion to their approved council tax base shares.

The Director Designate presented the results of the 2025 Staff Engagement Survey for Members’ information and consideration and informed Members that this is the third survey of this format, enabling us to assess the progress achieved over time, with the last survey taking place in 2023. The report outlines in paragraph 5.7 the excellent improvement in the overall net promoter score from a positive 7 in 2023 to a positive 43 in 2025, the consultants also noted the strong level of engagement demonstrated by our employees.

All four measures of engagement which were assessed in the survey improved across the board which was the target set back in 2023. There are still further improvements to be made, and actions will be planned with the Leadership team in the new year.

Members raised that staff who have been here more than five years scored lower in engagement scores than other tenures and sought assurance that this area would be worked on.

The Director Designate noted that this would be reviewed with the aim of further increasing engagement in the cohorts where engagement scores were lower than others, while acknowledging that the current scores remain strong across all tenures and grades, with most exceeding 80 out of 100. She added that in the analysis of different grades, it was the Senior Practitioners group who recorded the lowest scores, and actions will therefore focus on addressing the areas highlighted by the results and qualitative feedback.

RESOLVED: Members noted and welcomed the positive results of the staff survey.

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

Members sought assurance on the AI bubble and how damaging it could be.

Aoifinn Devitt responded that initially she expects there to be a stock market shock and a sell off, which will make our portfolio more volatile so we will need headroom for this exposure. Following this the market will realign, with some companies dropping out and others emerging stronger, though most firms are likely to survive. Noting that throughout this equity market wobble, the demand for data centres should remain strong.

Members noted that UK stock markets have performed well since the Budget, largely because the measures were broad based rather than focused on specific sectors as seen in the US and asked what factors could prevent this momentum from continuing throughout the remainder of this Parliament, and is this trend attracting the attention of Border to Coast in shaping its investment strategy for the UK.

Aoifinn Devitt replied that the market held up after the Budget due to the FTSE’s foreign currency exposure and its focus on energy, industrials and financials, which have all performed well. Noting that the UK market is tiny globally, which is why pension funds have reduced UK allocations. While forced UK investment isn’t favoured, there is a push to make the UK more attractive on its own merits, with good relative value and efforts to stimulate areas like energy and local investment, where Border to Coast is already active.

Independent Investment Adviser, Jonathan Hunt added that UK markets are often misunderstood. Pension funds have reduced UK exposure because the index is dominated by stable, dividend paying companies rather than high growth stocks, pushing investors toward the US. This raises the wider question of how to make London a growth market again, but the UK lacks the same supporting infrastructure as the US. Further to this, gilt markets have stabilised, improving confidence.

Members further probed around the AI bubble and its potential impact, questioning whether it is being driven by private debt and private credit, and could problems there spill over into our own exposure.

Aoifinn Devitt responded that AI isn’t the main issue, and while private credit has risks, they’re mostly in the mid?market where lenders back operating companies with steady cash flow. AI investment is largely funded by big firms themselves, so any downturn would hit equities first.

Members queried whether emerging markets in Africa is way off the mark when compared to other markets such as China.

Aoifinn Devitt responded that China continues to invest in regions others avoid, including parts of Africa, but as an investment opportunity, Africa remains firmly in frontier market territory. Investors have pulled back from emerging markets in recent years due to weak returns, and African managers face challenges such as limited liquidity, weaker tech infrastructure, and political or legal instability. Because of this, it’s unlikely we would see an African Allocation in the Border to Coast emerging  ...  view the full minutes text for item 14.

The Assistant Director – Investment Strategy presented the Q2 Investment Performance Report commenting that it was a very positive three months with the fund returning over 3.5% in the period and 6.7% over the last twelve months, both of which are behind the benchmark but very much in line with the actuarial targets. Looking ahead for the five-year period we are ahead of the benchmark and the actuarial targets.

RESOLVED: Members noted the report.

The Assistant Director – Investment Strategy presented the Q2 Responsible Investment Update.

Members raised questions around the LAPFF engagement activity and why there is no information in the report regarding specific engagement with weapons companies or other companies operating in occupied territories such as Booking.com and Airbnb.

Officers advised that they did not have this information to hand, although the Director noted that historically LAPFF have certainly engaged with Booking.com. The Assistant Director – Investment Strategy committed to gathering further information on this and providing a response back to Members accordingly after the meeting.

RESOLVED: Members noted the report.

The Director presented a report to allow Members to consider the Authority’s approach to exclusions of specific investments from the investment universe following discussion at the March meeting. The report set out the work that had been undertaken by officers in order to investigate and provide detail of the options and implications of each.

The Director advised Members that the choice they are faced with is between taking a decision that may make Members feel better but that cannot be implemented or taking a decision to maintain the current position and seek to influence the direction of the Partnership through building alliances with others. The Director stated that this is a decision for members, but as the principal policy adviser to the Authority, his clear advice to members is to maintain the current position and seek to influence through building alliances.

A Member raised with reference to the report and reflecting on the Members Away Day should engagement fail, should we be arguing for exclusion on whole sectors, such as the fossil fuel industry.

The Director responded that the draft guidance from the Government in preparing the Investment Strategy Statement and Pooling under the new regime makes it clear that individual funds should not be setting policies which exclude sectors or rafts of companies, this should be dealt with at the pool level.

A Member questioned what the reference to a single issue in paragraph 5.14 of the report referred to specifically.

The Director explained that what was meant was that we risk losing credibility within the Partnership if we focus too heavily on exclusion. He noted that we have successfully moved various elements of the pool’s approach both in the responsible investment sphere and wider. This has been possible through building alliances within the Partnership and the Director advised that it is his view that a very strong focus on exclusion would undermine our ability to maintain those alliances and to build new ones.

Members sought assurance for context on the positions of other partner funds.

The Director replied that three of the existing eleven Partner funds have been actively discussing this issue, none of which have taken a decision to do anything different to what they are already doing. For new funds joining the Partnership, this is not on their agenda given the other areas they need to focus on, so gaining consensus on the decision would take a very long time.

In response to further questions regarding there being no Government guidance to funds on international conflicts and occupied territories, the Director noted that the Government’s view can be inferred from the draft guidance which outlines that funds should not be taking a stance on such issues at individual fund level but that this is for the pool to determine.

The Director added that whilst appreciating that there is strength of feeling on such issues, he must remind members that the Authority’s duty is to ensure that we have the funds required to pay pensions when due.  ...  view the full minutes text for item 17.

Tim Manuel, Head of Responsible Investment at Border to Coast introduced and summarised the Annual Review of Border to Coast’s Responsible Investment Policies.

Mr Manuel added that until now these policies have been reviewed annually, but that now the development of these policies has reached a level of maturity, the Board has agreed to move to a three yearly review cycle. This would provide a more stable policy environment which would be conducive to implementing the policy intent.

It was noted that should there be a reason to review the policies in the interim, this would happen and that the voting guidelines would continue to be set every year.

A question was asked in relation to paragraph 5.4 (ii) regarding portfolio managers having the final decision on whether to reduce or exit the position, and whether this meant that a portfolio manager could effectively over-ride a decision of the Board.

Tim Manuel responded that the Board approves the overall suite of policies in which this sits and are involved at this level, not at the individual stock level, which would be the decision of portfolio managers, clarifying that the reason for this separation is to ensure clear accountability about who is making decisions at what level.

Cllr Dimond welcomed the addition in respect of biodiversity but raised a concern around his view on the accuracy of the climate section and that this should be revised to reflect current projections of global temperature rises.

Tim Manuel responded that the Net Zero Roadmap will be revisited next year, and there’ll be an opportunity for all Partner Funds to input into this.

RESOLVED: Members endorsed the updated policies attached at Appendices A to C.

Cllr Dimond requested that his dissent be noted for the record. 

The Assistant Director – Investment Strategy presented the update to SYPA’s Statement of Investment Beliefs, noting that the review of the statement was driven by the Government’s Fit for the Future consultation and the opportunity has been taken to update other aspects of the document, where appropriate.

Members welcomed the statement and questioned whether this just formalises what we already do or signals a shift toward more passive management.

The Assistant Director – Investment Strategy responded that this change in the beliefs statement is simply opening up the option to use passive management. The beliefs statement has only been in place since 2019, and at that time Border to Coast had no passive funds available. Now that these options exist, it’s quite possible we would want to use them.

The Director noted that the Fund is now much larger than in 2019 and relying too heavily on certain active strategies could increase risk. Adding passive options would help diversify our equity exposure and gives Border to Coast fund managers more flexibility when managing the 40% equity allocation.

RESOLVED: Members approved the updated Investment Beliefs Statement.

Cllr Dimond requested that his dissent be noted for the record – on the basis that he disagrees with the addition of passive management because this does not allow for exclusion. 

The Assistant Director – Pensions presented a report to update the Authority on the Pensions Administration Improvement Plan and a consultation opened by MHCLG on the Local Government Pensions Scheme in England and Wales, Access and Protections.

Members asked whether they could be provided with a preview of the Pensions Dashboard.

The Assistant Director – Pensions assured Members that once it reached a point where it could be showcased, it will be shared either during a meeting or at a separate training session.

Members raised that in SYPA’s response to the consultation, on the normal minimum pension age issue, there is concern around category 2 members losing protection for service they have already transferred and that they may have made different decisions if this fact was known at the time and asked whether there was any prospect of challenge to this.

The Assistant Director – Pensions responded that most Funds will be raising this point in their responses to Government, to highlight that this could present a significant challenge.

The Director added that the Local Government Pensions Committee, which is the employer-side body within the LGA, was of the view that there shouldn’t be any protections, given the administrative burden it could create and the risk that this could lead to another situation like that of McCloud. The Trade Unions view is that the rights at the age of 55 are a valuable benefit to members and understand that the age must increase but want to keep protections as far as possible.

RESOLVED: Members

1. Noted and commented on the 2025/26 plans for Administration improvement that are in place.
2. Delegated the response to the consultation to officers.

The Assistant Director – Pensions presented the Pensions Administration Strategy to secure approval following a full consultation with Employers in the Fund.

RESOLVED: Members approved the revised Pensions Administration Strategy at Appendix A.

The Head of Governance & Corporate Services presented the summary of the Local Pension Board Chair’s 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. Section 5 of the report highlights areas where the Local Pension Board would like to see further progress.

RESOLVED: Members

1. Noted the content of the report.

The Head of Governance and Corporate Services provided members with an update on current governance related activity and regulatory matters. With reference to section 5.6 of the report on the Fit for Future policies, the Authority are working with Border to Coast on a shared response to the consultation and a further update will be provided to Members in due course on the position of these outcomes.

RESOLVED: Members noted the updates included in the report.

The Head of Governance and Corporate Services presented the report on decisions taken as a matter of urgency between meetings of the Authority. One decision has been taken between meetings which was the approval of the Border to Coast Shareholder resolution for the investment and data platform budget which is detailed in section 5.2 of the report.

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