Report attached.

Contact: Vicky Jenks 01743 252192

The Board received the report of the Pensions Administration Manager which provided an update on the Breaches of LGPS regulations recorded between 1 April 2025 and 28 February 2026 affecting the Shropshire County Pension Fund.  Updates on all other governance issues were also included within the report along with an update on the number of stage 1 and 2 appeals which had been received under the Internal Disputes Resolution Procedure (IDRP).

The Pensions Administration Manager introduced and amplified the report and explained that the report was now being made public for transparency, but that any items requiring confidentiality would be brought as separate reports. The purpose of the governance report is to provide updates on policy reviews, the establishment of new policies, and to ensure the board had the opportunity to review and comment on these before they proceeded to the Pensions Committee for approval. The timing of Board and Committee meetings has been adjusted to facilitate this process.

The report included information on the breaches log, which records instances where employers, the fund, Committee, or Board have not met expected timeframes. It was noted that breaches were infrequent and generally minor, most commonly involving late receipt of information from employers, often due to changes in payroll providers. Efforts were ongoing to resolve such issues promptly.

A comprehensive review of several policies had been undertaken, including the Conflicts of Interest Policy, Data Retention Policy, Data Improvement Strategy and Work Plan, and the Communications Policy. The fund was moving towards developing its own policies, particularly in areas where reliance on Council Policies was no longer appropriate due to recent regulatory changes and the drive for good governance. For example, a dedicated data retention policy for the fund had been created.

The Medium-Term Business Plan was also included in the report, outlining plans for resource allocation and the management of upcoming work. The importance of training was emphasised, with a focus on developing a training plan to ensure Board Members were equipped to understand the range of topics discussed, including administration, governance, and investment matters. Training sessions were planned for later in the year.

The new requirement for an Independent Governance Review every three years was discussed, specifically regarding the options available and the challenges in identifying a provider who was truly independent. It was explained that the pool of suitable providers was small, and that all funds would be seeking such reviews within the same timeframe, which may create practical difficulties in terms of timing and procurement. Further guidance was awaited, and once received, the fund would determine the best timing and provider for the review. It was also clarified that the review must be conducted by a professional organisation and could not be replaced by a peer review, although the scheme advisory board was developing a peer review system for additional support.

A question was raised regarding the Conflicts of Interest Policy, specifically about the use of the term "board" and whether it referred to the Pension Board or another body. It was clarified that "board" referred to the local Pension Board, and that the updated policy now also incorporated the Committee, moving away from reliance on the Council’s conflicts of interest policy for Committee Members.

Another question concerned the scope of the Conflicts of Interest Policy, particularly whether it addressed more than financial conflicts and how to determine when a strongly held opinion constituted a conflict that must be disclosed. It was explained that the policy covered all types of conflicts, not just financial ones, and that a strongly held opinion became a conflict when it could influence a Member to act in their own interest rather than in the interest of all Members.

The Board was invited to provide any feedback on the Policies before they proceed to Committee for approval at the next meeting.

RESOLVED:

To note the contents of the report, along with the contents of Appendices A – F.