Mr Barry Dodds, from Hymans Robertson LLP presented the funding update. He said the funding update provided an illustration of the estimated funding position from 31^st March 2019 to 31 December 2020 and the funding impact, risks and mitigation of risks associated with the ongoing COVID-19 pandemic.

At the last formal valuation, the Fund assets was £1,552m and the liabilities were £1,525m. This represented a surplus of £27m and equated to a funding level of 102%. At 31 December 2020, with assets at £1,948m and estimated liabilities £1,716m, the actuarial estimate is that the funding level is 114%. Mr Dodds referred to the charts on page 94 of the agenda and explained the outlook on the funding position and associated risks.

In response to questions and comments from members the following was noted:

• Mr Steve Turner from Mercer commented that the funding level of 114% was a great result especially in the LGPS sector. He recommended the Committee to consider reviewing its long-term investment strategy as a lower return might now be targeted.
• Members expressed their agreement to re-examine the investment strategy.
• In response to how many active members the fund had, Ms Miriam Adams confirmed this to be 7,378 and said this included staff members TUPEed over to Waste Services from Veolia. She said approximately 324 members had been TUPEed.
• Mr Dodds cautioned that any changes to the investment strategy ought to consider if the expected investment return would be adequate as the payroll and/or the number of people making contributions was far smaller than fifteen years ago. He said this was known as ‘gearing’ in the sector.

The Pensions Committee RESOLVED to:

1. Note the whole Fund actuarial update at 31 December 2020
2. Note that any investment decisions taken which fail to provide the desired returns will impact estimated funding levels