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 the same level of confidence and make similarly positive statements about contribution levels.

The Director replied that this links back to the Valuation and the approach taken being a long?term view and keeping risk within reasonable limits. Contributions could still rise at the next Valuation but setting them lower now would make that more likely, which isn’t helpful for employers. Our aim is to provide as much long?term stability as possible.

RESOLVED: Members approved the revised Funding Strategy Statement at Appendix A.