The East Sussex Pension Fund (the Fund) have been awarded the 2021 Local Government Pension Scheme (LGPS) Fund of the year (assets over £2.5 billion) in the LAPF Investments Awards. The LAPF Investments Awards were established in 2015 and have come to be recognised as a mark of excellence in the field of pensions provision in the LGPS.
We were also highly commended for our Climate Change strategy reflecting the work the Fund has done to address both the challenges and the opportunities presented by climate change, sustainability, and the energy transition. This has helped us to better align the Fund’s portfolio with these themes, allowing it to play a role both in providing climate solutions, as well as protecting the interests of our scheme members.
Note: The 2021 awards were only held on 29th March 2022 due to the pandemic.
East Sussex Pension Fund achievements
To be able to win the LGPS Fund of the year award we had to demonstrate excellence in:
- Implementing best practice
- Leadership across pension fund operations
- Investment performance
- Collaboration and leadership within the LGPS
Funding and investment
The Fund continues to be an LGPS leader in the investment arena. Careful consideration of our Funding Strategy Statement and Investment Strategy Statement ensures the Fund balances stable, affordable contributions with a prudent, longer-term view of funding and solvency. The Funding position was 107% at the 2019 triennial valuation and estimated to be 111% at September 2021.
The target return from investments of the Fund is a minimum 4.0% with the strategic aim to achieve 5.3%, shaping the Fund’s appetite for risk. The 3 year annualised returns to March 2021 were 7.94%.
Throughout the strategy the Fund has substantially aligned to energy transition challenges resulting in the Fund being highly commended for the work it has done on Climate Change. The Fund takes a whole portfolio approach to climate risk instead of focusing on a single industry – find out more here.
The Fund has implemented all recommendations from its good governance review by:
- Ensuring high quality policies are in place
- Creating a more comprehensive risk register and risk management policy
- Changing the team structure to ensure sufficient resources are available to meet increasing regulatory requirements and created an LGPS officer post, as recommended through the Scheme Advisory Board (SAB) Good Governance project
- Reviewed and enhanced the terms of reference for the Pensions Board and Pensions Committee as well as officer delegations to ensure decisions are being made at the right level and responsibilities are clear
The administration of the Fund was a major area of focus and is now carried out in-house by East Sussex County Council. This change took place in April 2021, on time, and within budget. The administration team have continued to ensure KPI performance remains high throughout and increased transparency and improved management of member benefits. Data improvement work saw TPR data validation scores improve to 96.9% for Common and 96.0% for Conditional data. The team work on a wide range of daily tasks for the Funds 78,000 members, ensuring people receive their pension when they retire.
Our employer engagement team build relationships and communicate with our 130 employers. They are continuing to to embed i-Connect, an internet application which helps manage the flow of employee information from payroll systems to the fund’s pension administration system. This helps improve data timing and accuracy. The team provide training, updates, resources and support to employers and manage the process to admit new employers to the scheme.
The Fund works collaboratively through the ACCESS LGPS Pool*, playing a role in working groups. East Sussex is the pool ESG lead and spokesperson.
*The Government encouraged LGPS Funds to work together to put forward plans to “pool investments to significantly reduce costs, while maintaining investment performance” - making efficient use of public money. East Sussex County Council are part of the ACCESS pool comprised of 11 local authorities supported by a strong governance framework.
The Fund has strengthened its investment approach via membership of:
- Principles for Responsible Investment (PRI) - The world’s leading proponent of responsible investment.
- Local Authority Pension Fund Forum - LAPFF promotes the highest standards of corporate governance to protect the long-term value of local authority pension funds.
- And a seat on The Institutional Investors Group on Climate Change Corporate Programme Advisory Group – IIGCC are the European membership body for investor collaboration on climate change and the voice of investors taking action for a prosperous, low carbon future.