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Annual Report 2019-2020 Cover photos © Andy Harris - Main image pier Bottom, right, Portland © Shutterstock - Bottom, left, Maiden Newton Scheme Benefits Scheme Membership Information Performance Governance –2019-20 Scheme Administration and Scheme (LGPS) The Local Government Pension Administration Scheme Performance Investment Financial Performance Contact and Further information Other Organisations/Individuals The Fund’s Managers Overall Fund Management Responsible Investing The Annual Report Developments to the Fund in 2019-20 Key Financial Information Introduction Chairman’s Statement Introduction and Overview Contents

23 16 14 31 30 27 25 24 13 11 10 9 3 8 8 7 7 6 4

Notes to the Accounts Net Assets Statement Account Fund Independent Auditor's Report Pension Fund Accounts County Pension Fund The Local Pension Board for the Pension Fund Committee Governance Statement of the Actuary IAS26 Report Actuarial Information My Pension Cohabiting partners and the LGPS on restricting exit payments Government response to consultation McCloud Judgement new website Dorset County Pension Fund Information Other Scheme Administration Participating Employers ofthe Fund

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71 64 55 52 75 74 73 72 68 65 56 54 53 53 52 33 44 Appendix 2 - Appendix 1 -  Appendices Glossary of Terms Training Knowledge and Skills Material Other Brunel Costs and Savings Pools Asset Appendix 9 - Appendix 8 - Appendix 7 - Appendix 6 -  Appendix 5 -  Appendix 4 - Appendix 3 -  Statement Investment Strategy Compliance Statement Governance Policy and Risk Management Voting Issues Policy Climate Change Policy Principles UK Stewardship Code Statement Communication Policy Statement Funding Strategy Strategy Report Pension Administration

103 104 100 180 177 161 159 151 135 120 114 97 93 98 98 93

Contents | 2 Introduction and Overview vice-chairman. He remains a valued as well as the four years previously as all his hard work overthe last five years chairman, Councillor John Beesley, for want to begin by thanking the previous Fund Committee in September 2019. I election as chairman by the Pension Dorset County Pension Fund since my This is the first annual report ofthe Introduction Chairman’s Statement Chairman’s concerns aboutthe impact of the quarter ofthe financial year growing December 2019. in However, the last of March2019 to £3.2bn at the end of had risen £3.0 from billion at the end The value of the pension fund’s assets Investment Performance the Committee. Legg Brown, Howard and Felicity Rice to Felgate and Councillors Ray Bryan, David contribution, and to welcome Adrian and John Lofts for their hard work and Flower, May Haines, Colin Jamieson Andrew Turner and Councillors Spencer of the Committee. I would like to thank number ofchanges to the membership in Dorset, and this also resulted in a reorganisation of local government fund in April 2019 following the administering authority for the pension since Dorset Council became the This is also the first annual report Partnership oversight board. representative on the Brunel Pension member ofthe Committee and is our more positive. means that the outlook is now looking of vaccines for the virus in particular encouraging news about the development financial year and beyond, the recent volatility over the remainder of this £3.0bn. Whilst we still anticipate more the 2019/20 financial year at just over had to recovered levels at the start of September the value of the fund’s assets these from lows and as at the end of 2020 we have seen a significant recovery I am pleased to report that since April a benchmark of 4.6% over five years. of 0.8%, and an annualised 4.1% against March 2020,to the compared benchmark annualised -0.4% over the three years to longer term, the pension fund returned an combined benchmarkof -8.0%. Over the for the year was -9.7%, below the The pension fund’s return on investments 2020. assets at £2.7bn at the end of March all markets leaving the value of the fund’s pandemic saw severe coronavirus falls in

Introduction and Overview | 4 Introduction and Overview | 5 contribution rates effective from 1 April 2020 contribution rateseffectivefrom1 April 2020 period reduced from 22 to 19 years. New 31 March 2016, with the deficit recovery liabilities, an improvement from 83% at sufficient to cover 92% of its accrued at 31 March 2019 the fund had assets Barnett Waddingham. This estimated that fund’s assets and liabilities from our actuary, latest triennial valuation of the pension In 2019-20 we received the results of the Actuarial Valuation expected to increase. to Brunel’s management, fee savings are costs of £1m. As more assets transition Dorset’s share of Brunel’s annual running at approximately £1.5m, to compared assets transferred to date are estimated Fee savings in a full the year from transitioned to Brunel’s management. of the pension fund’s total assets had As at 31 March 2020 approximately 40% across and Wales. which itself is one of eight such pools formed the Brunel Pension Partnership, is one of the ten pension funds which efficiency and to reduce costs, Dorset pool investments, in to order improve Pension Scheme (LGPS) funds to requirement forLocalGovernment In response to the government’s Investment Pooling Chairman Cllr Andy Canning Yours sincerely, for all their hard work throughout the year. to the staff who support the pension fund over the past year. My thanks extend also and external advisers for all their support members, local pension board members Peter Wharf, my fellow Committee to thank the Vice-Chairman, Councillor involved in its administration. I would like on the combined efforts of all those The success of the pension fund depends Thank You the Pensions Regulator and officers. speakers from the pension fund’s actuary, The event was well attended and featured at Kingston Maurward in November 2019. The Annual Employers’ Conference was held Annual Employer Meeting 15.6% to 17.7% of payroll. meet the cost of future benefits rising from with the average employer contributions to were also agreed for all scheme employers, with employer contribution rates being as a percentage of pensionable pay, specify the member contribution rates the Dorset area. The regulations also employers admitted by agreement, in local authority employers, and other LGPS regulations for staff workingfor retirement benefits specified by the The purpose of the Fund is to provide officers. for teachers, fire-fighters and police Fund. Separate arrangements are made admitted and scheduled bodies in the of and the employees of DC and employees former provides the for payment of benefits to scheme established under statute, which contributory defined benefit pension a committee of the Council. It is a Fund Committee (PFC), which is matters, are overseen by the Pension and administration, including investment All aspects of the Fund’s management Government Pension Scheme (LGPS). the Fund), which is part of the Local the Dorset County Pension Fund (DCPF, statutory administering authority for Dorset Council (DC, the Council) is the Introduction Fund. It brings together a number of financial management applied to the the high standard of governanceand Council the opportunity to demonstrate Publication of this report gives the of the Treasury Management function. external fund managers with the exception of investment funds are undertaken by aspects of the day to day management information requirements of the Fund. All after the accounting and management Treasury and Investments team looks records, pension benefits etc. and the Team administers all aspects of member sections. The Pension Administration him is a team of staff split into two decisions made by the PFC. Supporting is responsible for implementing the Development S151) of the Council and who is the Executive Director (Corporate delegated to the Fund Administrator The day to day running of the Fund is order to pay retirement benefits. by earnings on the Fund’s investments in These contributions are supplemented Barnett Actuary, Waddingham LLP. set every three years by the Fund’s and excellent value for money. and continues to provide high returns the public that the Fund is well managed It is in the interest of both employees and is performing. how the Fund is managed and how well it both the public and employees to see comprehensive document that enables separate reporting strands into one

Introduction and Overview | 6 Introduction and Overview | 7 Key FinancialInformation • • • • to 23,330 including dependents. pensioners rose during 2019-20 by 4.3% decrease of 6.9%, whilst the number of in 2018-19 to 24,548 in 2019-20, a the Fund fell from an adjusted 26,369 The number of active contributors in benchmark of 4.6%. the performance was 4.1% against a benchmark of 0.8%. Over five years a performance of -0.4% against its benchmarks over three years with The Fund underperformed its actuary at the last valuation of 5.4%. rate (or target rate of return) used by the return of -8.0% and below the discount year of -9.7%, 1.7% below the benchmark investments for the 2019-20 financial The Fund achieved a return on increased by £0.5 million (21.7%). five years the value of the fund has valuation of £3.0 billion. Over the last compared to the previous year end of £2.7 billion as at 31 March 2020, (10.8%) over the year with a valuation Investments fell by £327.5 million The market value of the Fund's • • 2019-20 Fund in in the Developments • • Developed Markets Equities, funded by Developed Markets Equities, funded by invested £125M in the Brunel High Alpha In November 2019, the pension fund £101.4M. Markets Equities portfolio for a value of transferred to the Brunel Emerging Markets Diversified Equity Fund investment in the JP Morgan Emerging In October 2019, the pension fund’s 22.8%. £127.9M as at 31 March 2020, a rise of period from £104.1M in 2015-16 to have been steadily rising over the same 22.7%. The pension benefit payments £136.7M as at 31 March 2020, a rise of years from £111.4M in 2015-16 to gradually increasing over the past five Income from contributions has been (22 years at the 2016 valuation). period of no more than 19 years 31 March 2016, with the deficit recovery was 92%, an increase from 83% as at as at 31 March 2019, the funding level At the most recent actuarial valuation,

• • • uncommitted. uncommitted. Fund 7 leaving approximately £18.9M Fund, and £8.4M to the Ardian Buyout Neuberger Berman Private Equity Impact Global Secondary Fund, £18.4M to the were £14.1M to the Capital Dynamics made by Brunel to Private Equity funds Dorset’s shares of commitments sale receipts of £0.1M. the final quarter of 2019-20 with total net the Derwent portfolio were sold during 2019-20. Two properties staircased from purchases were added to the Fund in valuation (£7.63M). No new property price of £8.05m, 6% above the final Cambridgeshire District Council for a Park in Cambridgeshire to South office 270-279 Cambridge Science Property manager part sold the vacant In January 2020 CBRE, the Fund Brunel’s Global Passive Equity portfolio. management of Investec transitioned to remaining assets of £179.1M under the In January 2020, the pension fund’s (£60M) and Wellington (£65M). two global equities’ managers, Investec assets under the management of its partial disinvestment from the Fund’s • • all information that must be provided. Dorset County Pension Fund has disclosed included under the following headings. in the annual report, which have been "must", "should" and "may" be included annual report showing disclosures that showing a checklist for preparing the Local Government Pension Scheme Funds” In 2019 CIPFA created a “Guidance for into a single, annual document. and statements which the Fund produces Annual report compiles many of the reports following the year end. The Pension Fund Annual Report on or before 1st December authority must publish the Pension Fund as “The Pension Fund Annual Report”. The authorities to prepare a document known Regulations 2013 require administering The Local Government Pension Scheme The AnnualReport have been committed. commitments is £50m in total and all Income Fund. Dorset’s share of these Fund and the Greencoats Renewable the M&G Secured Property Income Standard Long Lease Property Fund, Secured Income funds - the Aberdeen Brunel has made commitments to three report must list the names and, where Overall Fund Management – The • • • • • • • arrangements are progressing. Asset Pools– How asset pooling accounting practices. disclosures in with accordance proper statement with supporting notes and a fund account and a net assets and Notes - The report must include Fund Account, Net Assets Statements Statement. content of the Governance Compliance LGPS Regulations 2013 prescribes the – Regulation 55 of the Governance revaluation. by the actuary at the last triennial current level of funding as reported Actuarial Report–Disclosure of the the administration of the fund. arrangements made during the year for Scheme Administration–A report of the Strategy Statement. and how this links to the Funding been put into practice during the year investment strategy statement has – This should demonstrate how the Investment Policy and Performance on income, expenditure and cash flows. financial performance, focused primarily must provide an overview of the fund’s Financial Performance–The report Fund Management. appropriate, contact details for the the Fund. retention or realisation of investments for company when undertaking the acquisition, and ethical issues on the performance of a factors, the effects of social, environmental are expected to consider, amongst other in the best financial interests of the Fund, The Fund investment managers, acting investment returns to its shareholders. performance of a company and will improve favourable effect on the long-term financial ethical issues is generally likely to have a in terms of social, environmental and believes that following good practice assets to unnecessary risk. The Council on Fund investments without exposing to obtain the best possible financial return The Council has a paramount fiduciary duty Responsible Investing • • • • • • the authority considers appropriate. Other Material - any other material which External AuditOpinion Communications PolicyStatement. Investment StrategyStatement Funding StrategyStatement. Pensions AdministrationStrategy report.

Introduction and Overview | 8 Overall Fund Management Pension Partnership. portfolios managed by the Brunel provided below. Dorset has fourteen in 2019-20 the details of which are but used thirteen external fund managers currently manage any fund’s internally and Cash Equivalents. The Fund does not Liability Driven Investments and Cash Funds, Multi Asset Credit, Infrastructure, Equity, Property,Diversified Growth Overseas), Corporate Bonds, Private The Fund is invested in Equities (UK and The Fund’s Managers The Overall FundManagement Dorchester, Dorset DT1 1XJ DT1 Dorset Dorchester, Council, Dorset County Hall Authority Administering Limited Insight Investment Management IFM Investors Management Hermes Investment CQS Limited Baring Asset Management CBRE Global Investors Aberdeen Standard Investments HarbourVest Partners, LLC Wellington Asset Management Investec Asset Management J.P.Morgan Asset Management Management Royal London Asset Schroders Fund Managers Managers Investments Liability Driven Infrastructure Infrastructure Multi Asset Credit Growth Funds Diversified Property Private Equity Private Equity Overseas Equities Overseas Equities Overseas Equities Bonds UK Equities Asset Class EC4V 4LA Street, London Victoria Queen 160 EC2V 7BB 3rd Floor, 60 Gresham Street, London 150 Cheapside, London EC2V 6ET 20 Old Bailey, London EC4M 7BF EC4M 9AF Third Floor, One New Change, London 6 St Andrew Square, Edinburgh EH2 2AH One Financial Center Boston, MA 02111 80 Victoria Street, London SW1E 5JL 25 Basinghall Street, London EC2V 5HA EC4Y 0JP 60 Victoria Embankment, London 55 Gracechurch Street, London EC3V 0RL 1 London Wall Place, London EC2Y 5AU Address 4th Floor, One Strand, London WC2N 5HR

Overall Fund Management | 10 Overall Fund Management | 11 Other Organisations/Individuals Other Brunel Pension Partnership Limited Government Local Pension FundPool MJ Hudson Allenbridge Mr Alan Saunders Independent Adviser MJ Hudson Allenbridge Mr Peter Scales Governance Adviser Osborne Clarke Fund Legal Advisers State Street Global Services Custodian State Street - Banker NatWest - Main Bankers Bankers Prudential Plc AVC Providers Deloitte LLP Auditors Barnett Waddingham LLP Actuary Service 101 Victoria Street, Bristol BS1 6PU 1 Frederick's Place, London EC2R 8AE 1 Frederick's Place, London EC2R 8AE 2 Temple Back East, Redcliffe, Bristol BS1 6EG Quartermile 3, 10 Nightingale Way, EdinburghEH3 9EG 20 Churchill Place, , London E14 5HJ 49 South Street, Dorchester, Dorset DT1 1DW PO Box 2711, Reading RG1 3UL 5 Callaghan Cardiff CF10 Square, 5BT 163 West George Street, Glasgow G2 2JJ Address from 1 from April 2019. Dorset County Pension Fund with effect auditors for Dorset Council and the Deloitte are the appointed as external External Auditor approach to address and control risk. is measured against, and offer a practical benchmarks that the Fund’s performance assessments of compliance against other managers and carrying out independent matters, assisting in the selection of new activity, giving advice on general investment Committee through reviewing investment been appointed to support the Pension Fund An IndependentAdviser(AlanSaunders)has Independent Adviser Waddingham. Council appointed Fund Actuary is Barnett and if an employer leaves the Scheme. The employers, if membership figures change to calculate contributions rates for new every three years, they are also required is required to carry out a full valuation are properly funded. Although the Actuary rates to ensure benefits under the Scheme is required to set employer contribution Central Government. However, the Actuary Employee contributions are fixed by Fund Actuary The Custodian Services • • • • • • Street Bank &Trust to the Fund include: by State The services provided custody and Board on an annual basis. custodian is reported to the Committee assets. The performance of the global managers in managing the Pension Fund’s the Pension Fund and its investment underpin the work of the officers of provides a wide variety of services that Fund’s assets. State Street Bank & Trust responsible for the safekeeping of the to the investment managers, to be Trust as its global custodian, independent The Fund employs State Street Bank & sell assets in foreign currencies; enable the Pension Fund to buy and foreign exchange settlement to lawsuits; filing of US-based class action investment managers; received by the Pension Fund’s proxy voting based on the instructions action corporate processing and tax reclamation services; and interest; collection of dividends income from investment managers; assets in the various different safekeeping of the Pension Fund’s investment and employer issues. for advice covering conveyancing, The Pension Fund uses Osborne Clarke Legal Adviser with the Treasury Management Strategy. balances will be invested in accordance and to pay day-to-day expenses. Surplus property investments and other managers to pay pensions, to fund private equity, Working balances comprise funds required County’s Treasury Management Team. policy, which is implemented by the operates its own treasury management internally as working balances and The Pension Fund also holds cash Internally ManagedCash • • managers. of the performance Fund’s investment Fund’s assets and the investment reporting on the value of pension lending; stock

Overall Fund Management | 12 Overall Fund Management | 13 www.dorsetpensionfund.org the LGPS. The address is as follows: further information relating to Contains Our website: County Hall, Dorchester, Dorset DT1 1XJ Dorset County Pension Fund Address: [email protected] Email: (01305) 224845 Telephone: on: our Pensions helpline County PensionFund, contact please For more information Dorset about the Contact and Information Further

(01305) 228524 Service Manager for Pensions Mrs KarenGibson regarding Benefits Queries (01305) 224119 (Treasury and Investments Service Manager Mr David Wilkes [email protected] Corporate Development Executive Director of Mr Aidan Dunn Accounts and Queries regarding Fund Investments as follows: Alternatively, you team can of the contact a member

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Financial Performance Financial Performance | 15 the year. No amounts had been written off during outstanding. recovered and £71,583.02 remained March 2020, £7,343.79 of this had been overpayments in 2019-20. As at 31 There was a total of £78,926.81 pension Pension Overpayments Analysis of regularly paid their contributions late. In 2019-20 there were no employers who Late Contributions Financial Performance Investment Performance Investment Performance

This year’s Fund Information Total Asset Distribution as at 31 March 2020 - The total asset distribution of the Dorset County Pension Fund as at 31 March 2020 is shown in the chart below. These allocations are within the agreed ranges.

£316 M £2.7Bn  UK Equities £491.0M (18.2%)  Bonds £220.6M (8.2%)  Liability Driven Investments £306.8M (11.4%)

Investment Performance | 17  Overseas Equities £766.5M (28.4%) Fund value Total  Private Equity £98.1M (3.6%)  Property (including Property Funds) decrease fund value £301.0M (11.2%)  Diversified Growth Fund £152.8M (5.7%)  Multi Asset Credit £120.4M (4.5%)  Infrastructure £195.3M (7.2%)  Cash and Cash Equivalents -9.7% -1.7% (including Derivatives) £53.4M (2.0%) ote F edging 97M -4

Fund Valuation (year ended 31 March)- The diagram below shows the change Fund value Underperformed in value of the Fund over the last five years as at 31 March. decrease benchmark 3,500 3,000 Market Value 2,500 2,000 £M 1,500 1,000 500 0 2016 2017 2018 2019 2020 market indicators. in line with the financial economic, and to be regularly monitored and adjusted limits of risk. The portfolio balance needs maximising returns within the acceptable investment policy ofthe Fund is aimed at of volatility in those returns i.e. the enhanced returns and potential ‘risk’ must be struck between the desire for asset classes. The balance correct diversification of its assets over different the Fund is to ensure adequate The main requirement in managing Asset Allocation. table opposite summarises the Fund’s the asset allocation of the fund. The Committee is responsible for deciding The Dorset County Pension Fund Asset Allocation Asset Class Total Asset Valuation Liability Matching Assets Emerging Markets Equities Overseas Equities UK Equities Private Equity Infrastructure Diversified Growth Multi Asset Credit Corporate Bonds F/X Hedging Cash Total Return Seeking Assets Total ListedEquities Property 10 15 20 25 30 Asset mix of the portfolio mix ofthe Asset -5 0 5 Equities UK Overseas Equities Emerging Emerging Markets Manager Insight JP Morgan/Brunel Several Several Several Several Barings CQS Management Royal London Asset State Street Internal CBRE Corporate Bonds Credit Asset Multi Diversified Growth Fund 3,023.6 2,622.5 1,444.2 401.1 703.0 643.0 138.7 176.1 139.7 214.4 105.1 323.3 31-Mar-19 98.2 80.3 ructure Infrast- 0.7 £M 100.0 Private 86.7 47.8 Equity 13.3 23.3 21.3 10.7 4.6 5.8 4.6 7.1 3.5 0.0 3.2 2.7 % 2,389.5 2,696.3 1,257.6 Property 306.8 682.8 491.0 195.3 152.8 120.4 220.6 301.0 31-Mar-20 53.4 83.8 98.1 -9.7 £M 100.0 Cash 88.6 46.6 11.4 25.3 18.2 11.2 -0.4 7.2 5.7 4.5 8.2 2.0 3.1 3.6 % Strategic Target Actual 31/03/19 Actual 31/03/20 Matching 2,318.9 2,696.3 1,213.4 Target Allocation Liability 377.5 593.2 539.3 134.8 215.7 134.8 161.8 134.8 323.5 80.9 £M - - Hedging F/X 100.0 86.0 45.0 14.0 22.0 20.0 12.0 5.0 8.0 5.0 6.0 0.0 0.0 3.0 5.0 %

Investment Performance | 18 Investment Performance | 19 values as at 31 March 2020. is responsible for based on market of the Fund’s assets that each manager with the figures showing the percentage appointed portfolios are shown opposite, The investment managers and their Investment Managers Investment Manager Brunel Pension Partnership Limited Brunel Pension Partnership Limited Insight Investment Management Limited CBRE Global Investors Royal London Asset Management Wellington Asset Management Brunel Pension Partnership Limited Baring Asset Management Limited CQS IFM Investors Brunel Pension Partnership Limited Aberdeen Standard Investments Schroders HarbourVest Partners, LLC Cash and Cash Equivalents Hermes Investment Management Brunel Pension Partnership Limited Brunel Pension Partnership Limited Derivatives Total Asset Class Overseas Equities UK Equities Liabilty Driven Investment Property/Property Funds Bonds Overseas/UK Equities Global Equities Diversified Growth Fund Multi Asset Credit Infrastructure Private Equity Private Equity UK Equities Private Equity Interest Receivables Cash and Cash Equivalents/ Infrastructure Property Funds Long Term Investments Derivatives 2,696.5 2019-2020 437.8 435.3 306.8 301.0 220.6 171.7 168.2 152.8 120.4 104.4 34.0 41.8 55.0 56.0 81.9 -9.7 £M 9.1 9.0 0.4 100.0 16.2 16.1 11.4 11.2 -0.4 8.2 6.4 6.2 5.7 4.5 1.3 1.6 2.0 2.1 3.0 3.9 0.3 0.3 0.0 % benchmarks. comparison against their specific investment categories and enables for one, three, five years in each of the The table opposite sets out the returns Five YearsbyAssetClass and Fund Returns Achieved OverOne,Three Overall FundReturn IFM Fund Hermes Fund Infrastructure Insight Hedging Inflation Bonds Barings Asset Management Diversified GrowthFund Brunel PM Secured Income CBRE Global Investors Property Brunel PM Private Equity Aberdeen Standard HarbourVest Private Equity CQS Multi AssetCredit Royal London Asset Management Bonds (Hedged) Brunel / LGIM Smart Beta Brunel / LGIM SmartBeta Wellington Overseas Equities Brunel UK Active Brunel/ LGIM Passive Schroders UK Equities Dorset -23.5 -13.2 -13.8 -14.8 -10.2 -20.0 -18.5 -19.5 12.4 25.3 19.6 29.2 -9.7 -0.8 -3.5 8.0 1.7 2.9 % 1 year Benchmark -23.1 -18.5 -18.5 -14.6 -10.0 -18.5 -18.5 -24.4 10.1 10.1 -8.0 -6.2 -5.8 1.5 4.9 1.3 4.8 2.0 % Dorset 11.6 12.7 17.9 -0.4 N/A N/A N/A N/A N/A N/A N/A -7.1 -3.0 -4.0 7.8 5.0 3.8 3.4 % 3 year Benchmark 10.0 10.0 N/A N/A N/A N/A N/A N/A N/A -7.2 -4.2 -4.2 -9.2 0.8 4.8 5.7 2.7 2.2 % Dorset 14.7 19.7 N/A N/A N/A N/A N/A N/A N/A N/A N/A -0.1 -0.5 4.1 9.1 6.4 4.7 4.1 % 5 year Benchmark 10.0 N/A N/A N/A N/A N/A N/A N/A N/A N/A -0.1 -1.0 4.6 4.7 6.6 0.6 0.6 3.9 %

Investment Performance | 20 Investment Performance | 21 Asset Management their who underperformed index by 18.1%. their underperformed index by 18.6% and the Diversified Growth Fund manager Barings The main detractors was to the performance Multi Asset Credit manager CQS who its benchmark of -24.4%. benchmark by 47.7% and 38.1% respectively, whilst Schroders returned -19.5% against two Private Equity managers HarbourVest and Aberdeen Standard their outperformed attributable to the Private Equity managers and UK EquitymanagerSchroders. The of -9.7% to compared a benchmark of-8.0%. Positives have to performance been During the year, the Fund its underperformed bespoke benchmark with a return Return Rates of One Year Summary compared with compared its benchmark foreach of the last ten years as at 31 March. - The Total AnnualReturns diagram belowshows the total return of the Fund -10 10 20 30 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Benchmark Dorset five-year period. their benchmark by 5.2% over the Asset Management underperformed Diversified Growth Manager Baring respectively. benchmarks by 19.1%, 14.1% and 5.1% Schroders who outperformed their HarbourVest, Aberdeen Standard and of 4.6%. Positives to performance were return of 4.1% compared to a benchmark underperformed its benchmark with a Over the five-year period, the Fund Return-Five Rates of Year Summary their underperformed index by 7.8%. Barings Asset Management who the Diversified Growth Fund manager The main detractor towas performance -4.0% against its benchmark of -9.2%. respectively, whilst returned Schroders their benchmark by 22.1% and 16.9% and Aberdeen Standard outperformed Private Equity managers HarbourVest The Equity manager Schroders. two the Private Equity managers and UK have performance been attributable to benchmark of 0.8%. Positives to returned -0.4% against its bespoke Over the three-year period, the Fund Return Rates of Three Year Summary

benchmarks. of the Fund and their respective The table opposite shows the Managers is performance regularly monitored. target performance against which their manager has a specific benchmark and management of the Fund’s assets. Each managers to undertake the day to day The Fund utilises external investment Fund Benchmarks provided by State Street. Information on returns is currently against their benchmark and target. of each performance manager measured longer period reports that includes the review a comprehensive quarterly and Fund Committee. The Committee is reviewed quarterly by the Pension Investment manager performance Performance Monitoring Management Wellington Investment SSgA Schroders Management Royal London Asset Insight IFM Hermes HarbourVest CQS CBRE Brunel - LGIM Brunel - LGIM Brunel - LGIM Brunel - LGIM Brunel - LGIM Brunel - Fundrock Brunel - Fundrock Brunel - Fundrock Brunel - Colmore Brunel - Colmore Management Baring Asset Aberdeen Standard Manager Global Equity Currency Overlay UK Equities Corporate Bonds Liability Driven Investment Infrastructure Infrastructure Private Equity Multi Asset Credit Property (Hedged) Passive Developed Equities Passive Developed Equities Passive UK Equities Passive Smart Beta (Hedged) Passive Smart Beta Emerging Markets Equity Global Equity High Alpha UK ActiveEquity Secured Income Private Equity Diversified Growth Fund Private Equity Description MSCI World Net - Investment Trusts FTSE Small Cap ex Years iBoxx Sterling Non-Gilt over 5 Insight from Sourced 10% Absolute Return 10% Absolute Return FTSE All Share 1 month +4% MSCI Quarterly Universe (Hedged) FTSE World Developed GBP FTSE World Developed Passive UK Equities Passive Smart Beta (Hedged) Passive Smart Beta MSCI EM TR Gross MSCI World TR Gross FTSE All Share Consumer Price Index MSCI ACWI 3 Month LIBOR +4% FTSE All Share Benchmark Indices 2015 2006 2007 2012 2016 2015 2006 2017 2000 2020 2020 2018 2018 2018 2019 2019 2018 2019 2019 2012 2006 Appointment Date of

Investment Performance | 22 Scheme Administration service providers service providers can join the LGPS. schools and other public bodies and and further education establishments, Employees of all Local Authorities, higher be found on page 34. breakdown of scheme membership can employers, and over 70,000 members. A administration service covers 317 The Dorset County Pension Fund (DCPF) prior to this by Dorset County Council. administered by Dorset Council, and From April 2019 the LGPS in Dorset is performance or market conditions. and are not affected by investment benefits are determined by the regulations a defined benefit scheme. This means that The Local Government Pension Scheme is cohabitating partners and eligible children. and their spouses, civil partners or eligible scheme providing pensions for all members and has developed into a comprehensive (LGPS) has been in existence since 1922 The Local Government Pension Scheme Pension Scheme Local The Government Scheme Administration classified as a final salary scheme whereby classified as a final salary scheme whereby Until 31 March 2014 the LGPS was and earnings investments.from members and employers’ contributions members. The Fund is financed by pension entitlements of past and present Fund must be sufficient to sustain future are invested in securities. approved The immediate pension benefit requirements, Scheme funds, currently surplus to The LGPS is required to be funded. How the Scheme Currently Works • • • following secondary legislation: administered in with accordance the Services Pension Act 2013.The fund is The Scheme is governed by the Public of Funds) Regulations 2016. Scheme (Management and Investment The Local Government Pension 2014 (as amended) Savings and Amendment) regulations Scheme (Transitional Provisions, The Local GovernmentPension Scheme 2013 (as amended) The Local GovernmentPension for Scheme Specific (Conditional) Data. were 99.3% for Common Data, and 98.1% reported to the Pensions Regulator in 2019 The Data Quality scores for the Fund, as represents good value for money. high, and staff turnover verylow, this 2019-20. With data quality scores very measured as £19.32 per member in The Administration Service cost was ensuring our statutory duties are met. whilst meeting member expectations, and successfully, in a cost-effective way, Our vision is to administer the DCPF career average scheme. be calculated under the rules of the new up in the LGPS after 31 March 2014 will career average scheme. All benefits built changed a final from salary scheme to a With effect 1 from April 2014 the LGPS to be calculated on a final salary basis. to andincluding31 March2014 willcontinue months pay. Benefits built up in the LGPS up membership and (usually) the final twelve grant were paid based on the period of the annual pension and any retirement

Scheme Administration | 24 Scheme Administration | 25 Benefits upto 31 accrued March 2014 are shown on page 34. valuation. contribution Employer rates actuary every three years following a contributions which areset by the DCPF’s of the LGPS throughvariable employer Employers meet the balance of the cost the members’ level of pensionable pay. 5.5% vary from to 12.50% depending on Standard contributions for members conditions. by investment or market performance by the regulations and are not affected This means that benefits are determined The LGPS is a defined benefit scheme. service providers can join the LGPS. schools and other public bodies and and further education establishments, Employees of all Local Authorities, higher can be found on page 44. breakdown of the scheme membership employers, and over 80,000 members. A administration service covers over230 The Dorset County Pension Fund (DCPF) prior to this by Dorset County Council. administered by Dorset Council, and From April 2019 the LGPS in Dorset is Governance – 2019-20 Administration and Scheme directly into our work flowsystem. exchanged securely. This system links enables notifications and data to be our YourFund employer portal, which Our employers are all required to use and in completing the data returns required. understanding their role and responsibilities, training is provided to assist employers in sheets available on the website, regular to the information, forms and fact dedicated team and website. In addition Scheme employers are supported by a Scheme Employers included in Appendix 3 The Pensions Administration Strategy is full ill health and death benefits. standard pension but still benefit from contribution and 50% accrue of the where they can pay 50% of the normal opt for the 50/50 section of the scheme, with CPI. Alternatively, members can the pension build up each year in line subsequent year and an adjustment to additional pension being added for each of pensionable pay received, with a pension build up each year of1/49th main section of this scheme accrues based on a career average basis. The Benefits after thisaccrued date, are are calculated on a final salary basis. duties are met. expectations, and ensuring our statutory effective way, whilst meeting member the DCPF successfully, in a cost- possible. Our vision is to administer improvement ofcost efficiency where for moneyand ensuring the continued administration functions represent value is committed to ensuring that the The Dorset County Pension Fund (DCPF) Value for Money template document. of discretions, policy guidance and a on the fund website containing a full list discretions policy, including a section completing and maintaining their LGPS is provided to assist employers in Full support and regular training section on the website. joining the fund including a dedicated outsourcing, and to new employers Specific supportis provided to employers materials are published on our website. are invited to attend, minutes and training and information updates. All employers interest to employers and regular training updates and pension news specifically of times a year, providing regulatory Officers –PLOG), Group meet three Employer meetings, (Pension Liaison Since 2018, the DCPF has developed a Data Since 2018, the DCPF has developed a Data improve its data quality. and it accurate, continually strives to data which is considered to be present Fund has a high level of scheme member members’ pension Whilst records. the governance and administration of Fund is paramount to ensuring effective Retaining good quality data within the Data Quality money. very low,this represents good value for high, and staff turnover and complaints nationally. With data quality scores very at an average cost to other funds The DCPF administration service remains are of less value than in previous years. data to the benchmarking club, the findings less than 25% of LGPS Funds contributing consider resuming this next year, but with health crisis and lockdown. The DCPF will to the restricted working resulting from the was not possible for the 2019-20 year due against other LGPS Funds. However, this Club to assess its performance and costs Pensions Administration Benchmarking The DCPF has subscribed to the CIPFA during 2019-20 is included on page 36. of the Fund’s administration functions Further detail about the performance training and support. together with an enhanced programme of Administration Strategy have been imposed, penalties as set out in the Pensions able to meet these requirements, financial data. Where employers have not been committed to providing accurate and timely team and the DCPF employers who have and joint effort of both the administration condition. This comes as a continued and currently all scheme data is in excellent to the continued improvement of our data, subsequent improvement plans, have led of the data held. The annual report, and commissioned to examine the quality Improvement Plan following annual reports Statutory duties expectations Member Cost efficiency administration and accurate. etc.) was scored as being 98.1% present employment details, contribution history scheme specific conditional data (e.g. was present and and accurate the data (e.g. NI Number, address etc.) reported that 99.3% of its common by the Pensions Regulator, the DCPF Using the scoring mechanism as set out scheme specific data. quality scores, and for both common the annual Scheme Return, the data pension schemes to report to them via The Pensions Regulator requires all Successful

Scheme Administration | 26 Performance Information The table below shows a summary of the main task areas, our local target for completion, (Fund KPIs), the legal timescales, the number of tasks completed in each work area, plus the % completed within our target time.

Process Fund KPIs Legal Number of cases % completed Requirement completed in year within Benchmark Deaths - Calculate and notify amount of 15 days 2 months 739 N/A

Scheme Administration Scheme Administration | 27 dependent's benefit Estimates - Letter notifying estimate of retirement 15 days 2 months 1312 99.39% benefits Retirements - Process and pay lump sum 5 Days 2 months 2829 97.84% retirement grant (including all retirement types) Deferment - Calculate and notify deferred benefits 40 Days 2 months 3206 94.45% Transfers in - Letter detailing transfer in quote 15 Days 2 months 930 99.25% Transfers out - Letter detailing transfer out quote 10 Days 2 months 534 96.82% Refund - Process and pay a refund 15 Days 2 months 4246 93.33% Joiners - Send notification of joining the LGPS to 30 Days 2 months 4922 97.11% scheme member Divorce - estimates for divorce purposes 30 Days or 21 Days for 3 months 190 N/A processed Court Ordered Requests General Correspondence 30 3415 N/A Communications and Member These communications are very well been concluded. This facility allows Engagement received by members. members the option to top up their LGPS The Dorset County Pension Fund (DCPF) pension provision by paying additional provides an on-line Member Self-Serve In April 2020 an additional newsletter contributions which are deducted from (MSS) facility, which allows active, deferred was issued to members at the start of the members salary at source. and pensioner members the option to the COVID-19 lockdown. The aim was change basic details, such as address, to ensure members knew how best to run through benefit calculations and communicate with DCPF and to promote also receive communications. 26.61% of the use of MSS. This led to 1,040 new active members and 17.96% of deferred activations during the month of April. members are now registered with MSS. The newsletter provided reassurance to Scheme Administration | 28 members who may have been concerned The DCPF main website will be changing about their pension at this time, as from 30 September 2020. The new well as information about the furlough website address from 1 October 2020 scheme and links to additional relevant will be www.dorsetpensionfund.org. information. This site will be for scheme members, providing information, forms and fact The DCPF also provides a Pensions sheets. A separate website will be Helpline where members can contact available for employers, effective from DCPF either by telephone or e-mail. the same date. Member presentations and roadshows are also staged throughout the county by Annual Benefit Illustrations are issued arrangement with employers. each year to active and deferred members together with an annual The Communication Policy Statement for newsletter detailing regulatory changes the DCPF is attached at Appendix 5. and key messages for members. Further newsletters are sent to members In-House Additional Voluntary highlighting issues of importance, such Contributions (AVC) Provider as changes in scheme regulations, when The DCPF has appointed the Prudential required. Annual newsletters are also as its In-House AVC provider. A sent to pensioner members each year. review of this provision has recently Scheme Administration | 29 return forhalf of their normal pension. Under this option full life assurance and ill health iscover retained. The scheme includes a 50/50 option which allows a member to contribute half of their normal contribution rate into the scheme in Changes to the Local GovernmentPension Scheme. The table below comparesthe LGPS 2008 and the LGPS 2014 schemes. The LGPS 2008/2014 Schemes Vesting Period Indexation of pension in Payment Ill Health provision Death Benefits in Service Survivor Death in Service LumpSum Lump SumTrade Off Opting Out Employee Contribution Rates Normal Pension Age increase for accumulated pension) Revaluation rate (the rate of rate Accrual Basis of the Pension Provision 3 Months CPI (RPI for pre-2011 increases) Tier 3 - Temporary payment of pension for upto 3 years enhancement to Normal Pension Age (65) Tier 2 - Immediate payment with 25% service Normal Pension Age (65) Tier 1 - Immediate payment with service enhanced to enhancement 1/160th accrual based on Tier 1 ill health pension 3 x Pensionable Pay Trade £1 of pension for £12 lump sum No Between 5.5% and 7.5% 65 Based on Final Salary The accrual rate was 1/60th Final Salary LGPS 2008 2 Years CPI Tier 3 - Temporary payment of pension for upto 3 years enhancement to Normal Pension Age (65) Tier 2 - Immediate payment with 25% service Normal Pension Age (65) Tier 1 - Immediate payment with service enhanced to enhancement 1/160th accrual based on Tier 1 ill health pension 3 x Pensionable Pay Trade £1 of pension for £12 lump sum other benefits. This is known as the 50/50 option. for half the pension, while still retaining the full value of the scheme can instead elect to pay half the contributions Members who have already or are considering opting out of Between 5.5% and 12.5% Pension Age. member’s NormalPension Age (NPA) will be their State There is no normal scheme pension age, instead each Consumer Price Index The accrual rate is 1/49th. March 2014, the scheme was a final salary scheme). A Career Average Revalue Earnings scheme.(Prior to 31st LGPS 2014 Scheme Membership contributions which are set by the DCPF’s contributions which are set by the DCPF’s of the LGPS through variable employer Employers meet the balance of the cost the members’ level of pensionable pay. vary from 5.5% to 12.5%, depending on Standard contributions for members deadline of twelve months). schemes into the Fund (usually within a may transfer benefits accrued with other other pension benefits. New members most circumstances, have not transferred they have no other LGPS benefits and, in contributions (less income tax) provided can choose to receive a refund of their with less than two years membership approved schemes. Members who leave transfer their accrued benefits to other Members who leave the scheme may entitled to be members of the LGPS. have their own pension schemes, are not have paid. Fire fighters and teachers, who can claim a refund of the contributions they this is done within two years of joining they wish to remain in the scheme can opt out; if join the scheme. Employees who do not less than three months are able to elect to months. Any employees with a contract for contract of employment for more than three employees under the age of 75 and with a Entry to the LGPS is automatic for all contribution rates are shown on page 34. commencing 1 April 2020. Employer contribution rate for the three-year period 31 March 2019 that sets out the employers’ valuation. A valuation was undertaken as at actuary every three years following a 9 8 7 6 5 4 3 2 1 Band Table Contribution 2019-20 £161,501 or more £107,701 to £161,500 £91,501 to £107,700 £64,601 to £91,500 £46,201 to £64,600 £36,501 to £46,200 £22,501 to £36,500 £14,101 to £22,500 Up to £14,100 Actual Pensionable Pay Pay Bands:

12.50 11.40 10.50 9.90 8.50 6.80 6.50 5.80 5.50 Scheme % Contribution Rate Main salary from 1 April to 31 March each year. based on their actual annual pensionable contribution percentage a member pays is contribution percentage for each band. The There are nine salary bands with a different Employees ContributionsTable2019-20 6.25 5.70 5.25 4.95 4.25 3.40 3.25 2.90 2.75 Scheme % Contribution rate 50/50

Scheme Administration | 30 Scheme Administration | 31 membership before 1 April 2008. membership before 1 April 2008. and 1/80th of final pay for each year of between 1 April 2008 and 31 March 2014 of final pay for each year of membership Pension is determined at a rate of 1/60th ill health and death benefits. standard pension but still benefit from full normal contribution and accrue 50% of the the scheme, where they can pay 50% of the members can opt for the 50/50 section of up each year in line with CPI. Alternatively, year and an adjustment to the pension build pension being added for each subsequent pensionable pay received, with additional a pension build up each year of 1/49th of The main section of this scheme accrues 2014, subject to meeting certain criteria. in the LGPS had it not changed on 1 April to the pension they would have received members will get a pension at least equal Normal Pension Age on 1 April 2012. These were within ten years of their protected who were active on 31 March 2012 and is an additional protection for members 60 for all or part of their membership. There certain members have a retirement age of which for most members is 65, although retain their protected Normal Pension Age, Benefits built up before April 2014 also Benefits Scheme • • circumstances: qualifying membership in the following leaving to a member with at least 2 years In the main, benefits can be paid upon members. eligible children of deceased scheme Children’s pensions are also payable to pensionable service after 5 April 1988. only takes account of the member’s pension for an eligible co-habiting partner an accrual rate of 1/160th. The survivor partner or eligible co-habiting partner at scheme member’s husband, wife, civil on the death of a scheme member to the years’ pay. Survivor’s pensions are payable be paid. This death grant is equal to three sum in the form of a death grant would Where a member dies in service, a lump (taxable) pension given up. tax-free lump sum for every £1 of annual scheme up to certain limits, getting £12 of the option to take a lump sum from the benefits after that date, retirees have lump sum is not a feature of the retirement before 1 April 2008. Although an automatic of final pay for each year of membership Retirement grants are based on 3/80th Pension Age, however early retirement Pension Age, however early retirement between the age of 55 and State any early retirement reductions applied; on reaching State Pension Age, without and the date of payment. increases between the date of leaving Such benefits are subject to inflationary the reaches member retirement age. remain in the Fund and are paid when Deferred benefits are those which benefits, deferred benefits are awarded. not choose to transfer out their accrued immediate payment of benefits and does years membership and is not entitled to If a member leaves with at least two • • business efficiency. business efficiency. retires by reason of redundancy or at the age of 55 and, if the member membership is less than 3 months. dependants’ benefits are paid even if the future. In the case of death in service, to obtain gainful employment again in judged that an individual will be able payable, depending on how soon it is different levels of ill-health benefit are grounds of permanent ill-health. Three at any age, if the member retires on the joined the scheme; pensionable service and the date they on the individual’s age, sex, length of of reduction that applies depends before State Pension Age. The amount someone draws their pension benefits reductions will normally apply where that have applied for the last ten years. that have applied for the last ten years. The table below show the rate of increases receive the increase regardless of age. widow’s, widower’s or dependant’s benefit receive the increase. Those in receipt of a five or have retired on ill-health grounds to Pensioners must be over the age of fifty- by 1.7%. therefore the annual pension will increase Consumer Prices Index (CPI) rate was 1.7%, against inflation. As the September 2019 (Review) Orders to help protect pensions with annual statutory Pension Increase deferred benefits are made in accordance Mandatory increases in pensions and Pension Increase CPI - Consumer Price Index 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year Beginning April 3.1 5.2 2.2 2.7 1.2 0.0 1.0 3.0 2.4 1.7 Rate ofIncrease % CPI CPI CPI CPI CPI CPI CPI CPI CPI CPI Index

Scheme Administration | 32 Scheme Administration | 33 • Members and Pensioners. categories of Active Members, Deferred analysed below overthe three main The membership of the Scheme is • • defined below: scheduled bodies or admitted bodies, as Participating employers can be employers in the Pension Fund. At 31 March 2020 there were 317 Fund of the Participating Employers Active Members: participating in the Pension Fund. 2020 there were 58 admitted bodies and the relevant body. At 31 March Agreement between the Pension Fund Scheme by virtue of an Admission staff can become members of the out scheduled bodies’ contracts, where private sector organisations carrying charitable and, in certaincircumstances, Bodies. These are voluntary, Admitted to be members of the Fund. employees are automatically entitled school) and Academies, whose as the Council (including maintained Bodies. Employers such Scheduled contributions to the Pension Fund. of the scheme employers making employment with the Council or one Those in a dedicated section on our website. outsourcing and new employers including Specific supportis provided to employers invited to attend. times a year, and all employers are Officers –PLOG), Group meet three Employer meetings (Pension Liaison directly into our ownworkflow system. exchanged securely. This system links enables notifications and data to be our YourFund employer portal, which Our employers are all required to use data returns required. responsibilities, and in completing the employers in understanding their role and regular training is provided to assist fact sheets available on our website, addition to the information, formsand to assist and support employers.In a dedicated team, who are available Scheme employers are supported by • • spouses’ and dependants’ pension). pension the from Scheme (including Pensioners: the Scheme. entitled to receive their pension from employers but have not yet become left the Council or one of the Scheme Members: Deferred Those who receive a Those who have template at: of discretions, policy guidance and a employer's website containing a full list LGPS discretions policy, including an completing and maintaining their are provided to assist employers in Full support and regular training www.dcpfemployers.org employees during the year are also shown. a period of twenty-two years. The contributions both received from employers and The contribution rates are set at a level so as to bring the fund to 100% funding over employees’ pensionable pay that each employer paid into the fund during 2019-20. as at 31 March 2020. The contribution rates shown are the percentage of its The following are the employers participating in the Dorset County Pension Fund The tables below show the Scheduled Bodies and Admitted Bodies Information. Employer Rates -YearEnded31 Contribution March2020 Gillingham Town Council Town Council East Stoke Parish Council Dorchester Town Council Crossways Parish Council Corfe Mullen Parish Council Colehill Parish Council Christchurch Town Council Town Council Town Council Bothenhampton And Walditch Parish Council Blandford Town Council Bere Regis Parish Council Arne Parish Council Schedule Bodies Alderholt Parish Council Parish andTownCouncils Tricuro Dorset Council BCP Council Principal Councils Tricuro SupportedLiving Active Members Number of 6,494 4,803 857 13 26 20 14 43 4 1 1 7 1 1 2 1 1 1 1 Number of Pensioners 11,114 6,387 309 24 11 8 8 1 2 8 0 0 0 0 0 0 0 0 0 Contribution Rate Paid % Rate Paid 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 15.9 15.6 17.7 17.7 Contributions Employer 35,576,180.50 30,070,441.08 2,548,677.91 106,708.20 69,359.72 28,430.96 28,568.66 10,039.34 99,214.76 62,223.59 53,641.90 3,318.48 4,481.78 6,139.08 2,219.38 2,541.10 1,452.00 7,372.97 616.80 Contribution Rate Paid % Rate Paid Employee 6.2 6.6 5.5 6.5 5.5 5.8 6.0 6.5 6.2 6.3 5.5 6.3 5.5 5.5 5.7 6.4 6.4 5.6 5.9 Contributions Employee 8,197,886.16 7,470,360.02 848,439.98 19,691.27 31,386.16 28,391.44 17,872.33 17,045.99 8,589.17 1,185.81 9,081.79 1,813.80 2,821.32 1,905.23 154.19 829.59 554.86 637.91 363.00

Scheme Administration | 34 Scheme Administration | 35 Wool Parish Council Town Council Weymouth Town Council West Parley Parish Council West Moors Parish Council Wareham TownCouncil Wareham St Martin Parish Council Town Council Town Council Parish Council Sturminster Marshall Parish Council Town Council Milborne St Andrew Parish Council Lytchett Minster & Upton Town Council St Leonard's Parish Council Town Council Town Council Puddletown Parish Council Portland Town Council Lytchett Matravers Parish Council Town Council Bournemouth and College Lower Winterbourne Parish Council Bournemouth and Poole Adult Learning Arts Institute At Bournemouth Further andHigher Education Establishments Schedule Bodies Kingston College Maurward Harewood College Knightsford Parish Council Active Members Number of 1,629 362 125 235 211 184 43 28 16 14 1 9 1 2 7 3 1 1 5 1 7 1 8 1 2 1 0 0 0 0 Number of Pensioners 557 427 221 112 10 64 20 11 29 72 1 2 1 1 1 1 2 1 1 4 1 3 3 1 0 0 0 0 0 0 Contribution Rate Paid % Rate Paid 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 13.1 15.5 19.6 14.1 22.0 15.3 15.1 N/A N/A N/A N/A Contributions Employer 4,897,496.89 1,531,443.40 1,110,885.97 217,563.54 147,056.56 407,711.64 700,674.63 367,388.79 40,413.93 10,093.69 33,741.74 14,140.35 24,132.48 82,147.66 41,328.31 23,587.34 75,081.64 4,153.32 3,453.98 2,369.64 5,087.69 5,975.92 3,886.93 1,161.35 1,159.28 1,755.92 142.44 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A 6.7 5.8 6.1 5.8 6.5 6.4 6.1 6.2 5.5 5.8 6.5 5.8 5.5 6.1 6.4 6.2 5.5 5.9 6.2 5.5 6.3 6.9 6.4 5.6 6.1 6.1 6.0 Contributions Employee 2,123,500.20 395,935.05 449,463.07 201,869.37 142,503.26 64,515.19 11,222.53 40,294.36 23,723.73 11,873.48 21,154.99 72,911.35 1,094.88 2,823.79 9,820.87 3,930.89 1,341.30 1,765.63 1,024.77 6,641.78 6,262.34 910.65 592.44 290.32 289.82 446.18 35.61 0.00 0.00 0.00 Coastal Learning Partnership Christchurch Infant School Chickerell Primary Castleman Academy Trust Burton C of EPrimarySchool Baden-Powell and St Peter's Church of England Junior School Dorset Studio School Dorchester Middle School Broadstone First School Bovington Academy Bournemouth SchoolForGirls Academy Bournemouth SchoolAcademy Bourne Academy Courthill Infant School Colehill First School Broadstone Middle School Blandford Education Trust Bishop Of Winchester Academy Academy Avonbourne Atlantic Academy (Aspirations) Schedule Bodies Diocese Salisbury Academy Trust Beaucroft School Bayside Academy Allenbourn Middle School All Saints Church ofEngland Academy Academies andSchools Bethany CE VA Junior School 1 2 3 1 5 3 2 2 Active Members Number of 449 134 119 305 41 40 12 45 26 40 48 59 38 50 59 56 47 29 18 25 32 51 54 48 5 2 7 0 0 Number of Pensioners 10 60 69 26 30 23 10 67 10 44 11 6 1 1 7 1 8 9 1 3 2 6 5 8 4 2 5 2 0 Contribution Rate Paid % Rate Paid 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 N/A N/A Contributions Employer 1,072,711.70 138,906.42 104,022.99 369,406.86 686,614.74 339,362.93 106,124.65 157,861.34 123,763.85 187,689.18 204,176.21 159,550.45 182,901.63 22,658.93 87,982.37 72,158.22 63,229.31 87,972.56 56,750.73 83,749.88 88,736.81 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A N/A N/A N/A N/A N/A 6.1 5.8 5.6 5.7 6.0 5.6 5.9 5.8 5.8 5.6 5.7 5.6 6.3 6.2 6.2 6.0 5.7 5.8 6.3 5.7 5.8 Contributions Employee 108,630.99 110,056.88 325,155.11 21,517.51 21,613.87 42,489.15 33,123.76 15,031.47 27,323.26 87,463.32 32,117.88 17,046.91 53,149.59 40,860.51 62,229.16 47,864.18 48,825.34 58,310.57 25,163.33 27,177.24 7,310.53 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Scheme Administration | 36 Scheme Administration | 37 Hayeswood School Hamwic EducationTrust Lilliput C of EInfant School Primary School Kingsleigh Primary School King's Park Academy Heatherlands Primary School Merley First School PrimarySchool Manorside Primary Academy Malmesbury Park Primary School Hillside Community First School Hill View Primary Academy St Mark PrimarySchool Greenwood Tree Academy Trust Glenmoor School Epiphany Academy Montacute Academy Longfleet Primary School Primary Trust Jewell Academy Highcliffe Junior School Highcliffe Academy Heathlands Primary School Heath Academy Trust Schedule Bodies Longspee Academy Lockyer's Middle School Emmanuel Middle School Elm AcadmeyLeaf 1 1 1 2 1 2 2 2 1 Active Members Number of 521 126 140 29 89 54 10 28 76 29 75 59 76 48 23 78 34 28 30 17 61 36 42 20 28 29 6 9 8 3 0 Number of Pensioners 25 12 11 11 10 23 34 36 4 7 7 1 7 3 3 6 8 5 2 3 3 2 6 5 5 6 3 1 3 0 0 Contribution Rate Paid % Rate Paid 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 N/A Contributions Employer 802,115.77 201,259.65 206,669.25 135,039.23 223,788.80 142,010.22 106,318.02 241,739.27 134,710.75 166,125.22 194,384.00 69,221.01 70,316.53 77,305.54 10,127.76 64,805.95 77,406.43 31,162.04 65,965.69 11,603.29 84,135.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5.7 5.6 5.6 5.8 5.8 5.9 5.5 5.7 5.5 5.8 5.7 6.3 6.0 5.6 5.5 6.0 5.7 5.7 5.4 6.0 5.8 Contributions Employee 242,487.77 60,900.84 20,685.99 21,551.38 63,289.12 41,716.19 66,403.18 23,149.33 19,891.26 36,475.94 34,766.35 61,515.00 23,051.79 31,700.28 19,883.08 50,485.32 62,904.34 25,546.08 2,962.98 7,585.98 3,306.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Shillingstone C Primary School Queen Elizabeth's School Portsmouth & Winchester Diocesan St Clement's And St John's C of EInfant School St Aldhelm's Academy St Mark's C of E Primary School Sherborne AreaSchool'sTrust St Luke's Church ofPrimarySchool Academy Poole Grammar Pokesdown Academy Plymouth Cast - Poole St John's CE VC First School Southern Multi Academy Trust Primary CommunitySchool Somerford St Gregory's PrimarySchool St Edward's RC & Cof ESchool Shaftesbury Academy St Joseph's Primary School Queens Park Academy Old Town First School & Nursery Ocean Academy Poole Oakmead Academy Leaf Muscliff Primary School Schedule Bodies Plymouth Cast - Dorset Plymouth Cast - Bournemouth Parkstone School Grammar Parkfield Academy Junior School Mudeford Infants School St Johns Moordown Primary School 2 1 1 8 4 2 2 2 Active Members Number of 345 118 168 136 153 54 34 59 62 59 93 40 44 20 26 30 63 31 25 28 70 83 65 28 27 23 52 5 0 0 0 Number of Pensioners 46 38 16 33 43 10 23 12 20 28 6 6 8 6 2 5 6 1 2 4 6 2 5 7 3 4 2 8 0 0 0 Contribution Rate Paid % Rate Paid 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 N/A N/A N/A Contributions Employer 640,623.83 347,584.04 109,459.10 247,101.35 399,184.60 173,227.41 140,223.53 186,371.16 182,339.63 199,084.98 105,024.61 133,767.12 124,672.52 180,254.95 80,311.68 96,608.00 48,870.95 88,674.25 96,123.98 75,648.05 52,990.90 54,218.24 66,462.63 46,105.42 70,848.31 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A N/A N/A N/A N/A 5.7 5.7 6.0 6.0 5.6 5.6 5.9 5.6 6.0 5.7 5.7 5.6 5.8 6.0 5.9 5.6 5.7 6.1 5.8 5.7 6.0 5.9 5.7 5.6 Contributions Employee 196,743.48 24,838.78 98,228.80 34,987.03 74,588.81 28,759.71 99,276.59 11,546.07 56,585.92 26,782.21 43,184.32 55,258.57 23,641.88 51,728.54 22,791.41 14,135.24 65,360.07 12,593.23 16,373.03 34,124.81 41,104.13 37,794.91 52,423.75 18,568.59 11,098.89 21,250.80 0.00 0.00 0.00 0.00 0.00

Scheme Administration | 38 Scheme Administration | 39 Wareham St Mary CEPrimarySchool Tregonwell Academy Thomas Hardye Academy The The Swanage School The Studio Academy Leaf The Quay Academy The Priory C of EPrimarySchool The Bicknell School Teach Trust Stourfield Infant School Witchampton School Winton Primary School Wimborne Multi Academy Trust Stanley Green Academy Westfield School Stalbridge CE Primary School St Walburgas R C Primary School St Osmunds C of EMiddle School St Michaels Primary School Wyvern Academy School Woodroffe Schedule Bodies St Peter RC School St Michael's Middle School St Michael's C Of E PrimarySchool 1 1 8 2 Active Members Number of 291 134 249 164 103 141 49 30 15 37 21 57 62 57 33 40 94 46 12 62 0 0 0 0 0 0 0 Number of Pensioners 50 41 21 53 60 13 15 45 20 7 4 1 9 1 3 5 1 3 5 5 5 6 3 6 0 0 2 Contribution Rate Paid % Rate Paid 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 N/A N/A N/A N/A N/A N/A N/A Contributions Employer 631,013.44 348,262.23 372,905.81 156,429.20 100,136.12 316,960.71 129,615.06 160,198.73 594,476.41 319,392.45 312,818.64 235,614.86 212,760.40 119,780.07 130,659.10 67,627.24 42,707.73 45,438.46 46,542.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A N/A N/A N/A N/A N/A 5.9 6.1 5.9 6.2 6.0 5.9 5.9 6.0 5.8 5.4 5.7 6.1 5.8 5.8 5.8 5.6 5.9 5.7 5.7 Contributions Employee 199,198.32 112,653.17 116,817.61 181,957.32 22,268.59 49,468.43 13,485.10 31,640.35 11,533.86 97,034.86 13,415.59 39,538.91 47,414.87 79,457.33 95,859.05 70,504.70 53,802.31 36,440.99 39,092.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total Scheduled Bodies Wimborne Cemetery JMC Wessex Education Shared Services Wareham Joint Burial Committee Two Counties (St.Michael's) Churchill St. Joseph's The Colliton Club Police & Crime Commissioner Millbrook Healthcare (DC) Churchill Bourne Schedule Bodies Stour Valley Poole Partnership Poole Housing Partnership Harrison Catering Churchill (Harbourside) Christchurch Learning Centre Energy Kidz Limited Dorset Valuation Panel Dorset Council Partnership Dorset CC Health Dorchester Joint Burial Committee Compass Contact Services Ltd Bournemouth Transport Bournemouth HurnAirport Other Caterlink Southern 9 7 6 Active Members Number of 24,152 1,415 103 21 96 1 1 5 3 2 4 4 5 1 5 8 0 0 0 0 0 0 0 0 Number of Pensioners 21,952 764 200 31 67 41 1 5 2 4 1 1 1 1 1 0 0 0 0 0 0 0 0 0 Contribution Rate Paid % Rate Paid N/A N/A N/A N/A N/A N/A N/A N/A 19.4 15.9 15.5 23.6 15.8 16.8 25.1 14.0 23.5 22.5 14.4 22.3 23.2 18.2 9.5 Contributions Employer 5,892,864.64 3,302,386.26 651,301.01 477,638.35 90,768.50 26,016.61 17,513.94 17,313.01 2,325.59 3,616.52 2,036.11 5,619.92 8,903.34 631.93 53.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A N/A N/A N/A N/A N/A 6.2 5.5 5.5 5.5 6.4 6.8 6.4 5.5 5.5 6.8 5.6 5.5 5.5 4.7 Contributions Employee 2,233,419.67 180,982.28 188,561.29 29,861.24 9,128.66 2,127.87 4,193.92 4,415.99 2,668.11 1,086.54 365.87 627.00 842.82 446.18 12.95 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Scheme Administration | 40 Scheme Administration | 41 Golf ForAll East Dorset Housing Association Admitted Bodies AECC University College Addaction Ltd Age Concern Bournemouth Action For Children A Q S Homecare 1610 Ltd Dorset Association of Parish and Town Councils DC Leisure Management Ltd CSCI Convex Leisure Ltd Churchills Bearwood Churchills (Poole) Churchill Contract Services Churchill Cleaning Care UK Care South Care Quality Commission Bridport Museum Trust Bournemouth Health Bournemouth Citizens Advice Bureau Ansbury BH Live Barnardo's AP Chant Plumbing & Heating East Boro Housing Trust Dorset Lighting Dorset Community Action 9 Active Members Number of 102 29 51 1 1 1 3 6 1 4 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Number of Pensioners 367 44 36 12 15 40 72 55 16 32 1 7 1 6 2 2 1 1 2 1 1 5 4 1 2 1 5 0 0 0 Contribution Rate Paid % Rate Paid N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 17.7 20.5 21.0 14.2 17.4 14.4 23.6 16.0 15.4 23.6 23.6 23.6 Contributions Employer 143,048.48 237,829.81 317,583.35 67,218.60 17,617.61 32,345.34 24,536.37 12,067.72 16,617.73 6,497.31 3,028.39 1,536.36 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5.9 6.7 6.5 5.8 6.5 6.8 5.5 6.1 6.3 6.8 6.2 6.1 Contributions Employee 131,608.74 19,762.19 46,428.50 77,697.53 2,011.00 1,228.04 6,860.85 2,836.82 7,089.98 3,167.05 4,296.67 358.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 SLM (Weymouth) Charitable Trust Signpost Services Ltd Signpost Housing Association Ltd Signpost Care Partnership Sequal Solutions Ltd Purbeck Housing Trust Commissioners Places For People Mouchel Magna Housing Group Magna Housing Association Ltd Mack Trading Links4Learning Trust Interclean Admitted Bodies Spectrum Housing Spectrum Group Synergy Housing Group Stonewater The Arts Development Company SLM FoodAnd Beverage Ltd SLM Community& Leisure Blandford SLM CommLeisure Charitable Trust Innovate Services Ltd Healthy Living Wessex Overall Total Total Admitted Bodies Weymouth Port Health Weymouth and Portland Housing Association Sovereign Housing Group Weyco ServicesLtd Wessex Water Authority South Dorset Community SportsTrust 10 Active Members Number of 24,548 396 11 60 13 35 14 26 6 8 2 2 4 1 2 3 7 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Number of Pensioners 23,330 1,378 239 45 15 71 31 15 30 40 15 52 49 8 2 2 6 1 3 1 1 5 2 3 1 6 2 1 0 0 0 0 Contribution Rate Paid % Rate Paid N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 17.7 16.6 17.2 21.5 21.2 17.3 14.7 17.1 12.0 16.0 13.0 23.6 16.3 15.3 26.6 19.8 16.0 Contributions Employer 108,552,860.18 1,365,343.78 129,096.83 553,806.42 352,930.23 123,392.62 185,075.26 28,995.28 15,499.46 23,188.73 87,053.42 15,423.59 26,257.11 20,412.47 1,828.79 3,646.57 4,001.16 667.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Contribution Rate Paid % Rate Paid Employee 10.1 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 6.1 7.3 6.9 6.6 6.9 9.3 6.8 6.6 6.2 6.2 5.5 6.0 6.5 6.0 5.8 Contributions Employee 28,216,231.19 127,029.68 10,072.08 19,956.91 19,249.34 40,189.71 13,567.77 83,215.58 12,622.95 23,934.74 7,133.54 7,142.51 8,776.19 5,298.79 1,087.93 500.32 155.52 892.21 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Scheme Administration | 42 Notes to the table (on pages 43-51) 1 Contributions all recorded under "Wimborne Academy Trust" - there is no split for individual schools. 2 Contributions all recorded under "Coastal Learning Partnership" - there is no split for individual schools. 3 Contributions all recorded under "Castleman Academy Trust" - there is no split for individual schools. 4 There are no active members as the school went back to Dorset Council payroll from 1 July 2018. 5 Joined Dorset Salisbury Academy Trust 1 January 2020. 6 Made additional payment £3M in February 2020. 7 Last active Member left 7 May 2019. 8 Backdated contributions to be paid in 2020-21. 9 Service and Staff transferred to Tricuro 9 October 2019.

Scheme Administration Scheme Administration | 43 10 Last Active member left 25 September 2019. Other Scheme Administration Information Scheme Membership The table below shows the Membership in the Fund over the last two financial years.

Membership Summary 31 March 31 March Change Change % 2019* 2020 Active Members 26,369 24,548 -1,821 -6.9

Pensioners 22,370 23,330 960 4.3 Scheme Administration | 44 Deferred Members 24,572 26,081 1,509 6.1 73,311 73,959 * Adjusted figures.

Membership Summary

30,000 Active Members 25,000 Pensioners 20,000 Deferred Members 15,000

10,000

5,000

0 31 March 2019* 31 March 2020 Scheme Administration | 45 over the last five financial years. Contributions Received and Benefits Paid The table below show the history of Benefits and Contributions that have left the scheme. starters in the Pension Fund and 5,145 During 2019-20 there were 5,594 new Starters Leavers and During 2019-20 profile as at 31 March 2020. The chart opposite shows the Fund Age being 105 years old. old (16 females and 14 males), the oldest pensioners/dependents over 100 years 70.9% female and 29.1% male, with thirty dependents. The fund membership is split members and 23,330 pensioners including 24,548 active members, 26,081 deferred total membership of 73,959 split into As at 31 March 2020 the Fund had a 31 March 2020 Age Fund Membership Profile of as at Year 2019-20 2018-19 2017-18 2016-17 2015-16 Contributions £M Contributions Member 136,769 122,212 119,537 109,146 106,672 Benefits Paid £M Paid 127,919 120,112 113,223 108,075 104,157 Fund Distributionasat31March2020 Age 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 Contributions Received and Benefits Paid Contributions Receivedand 2015-16 to2019-20 Benefits 100,000 110,000 120,000 130,000 140,000 500 90,000 0 15-19 20-24 2015-16 25-29 30-34 35-39 2016-17 40-44 45-49 2017-18 50-54 55-59 60-64 2018-19 65-69 70-74 * This does not include the dependants 75+ 2019-20 80-84 85-89 90-94 Benefits Paid£M Member Contributions£M 95-99 Pensioners Deferred Active 100+ pensioners split between various categories. The table below shows the details of new New Pensioners Details meet any current and future liabilities. Pension Scheme Regulations in order to adhering to the Local Government solvent and is administered effectively, ensure that the Pension Scheme remains Administrator in his statutory duty to Financial Services staff assist the Fund the Pension Fund. administering the scheme are charged to the Fund Administrator. The costs of administration is the responsibility of Pension Fund and the scheme authority the for Dorset County Dorset Council is the administering Scheme Administration Total Redundancy/Efficiency Normal Retirement Late Retirement Ill-health Retirement Flexible Retirement Early Retirement Actuarial Reduction Title New Pensioners Total Members 1,316 173 121 131 825 32 32 2 • • • provide a wide range of services including: comprises 34 full time equivalent staff who The Pensions Administration Team and to deliver excellent customer care. needs of the Fund’s various stakeholders to providing a quality service to meet the members. The team is fully committed participating Employers and Scheme Committee, the Local Pensions Board, is accountable to the Pension Fund The Pensions Administration team Treasury and Investments Team. Team. The remaining team is the Communication Team and the Systems Teams, the Employer Relationship and Scheme - the Technical Administration the Local GovernmentPension Team; three teams which administer and the Treasury and Investments There are four teams within the Pensions Staffing retirement estimates; the LGPS and provision of early sums for retiring members of calculation of pensions and lump Scheme; administration of new starters in the County Pension Fund; administration of the affairs of Dorset • • • • • • • • • • annual disclosures accountancy and information for the triennial valuation, liaison with the Actuary to provide scheme members and employers; sheets, newsletters and guidance to and procurement issuing of fact responsible for the design, Council and its Employers; arrangements between Dorset of relationships and working promotion and facilitation key IndicatorsPerformance report; increase exercise; undertaking the annual pension statements; statements and deferred benefit and provision of annual benefit of pension scheme members maintenance of the database in-house AVCs and APCs; dealing with the administration of active members; dependants benefits for retired and calculation of widows and refunds for early leavers; calculation of deferred pensions and for the Local Government; calculations and estimates divorce calculations, outgoing transfer value calculation of service credit

Scheme Administration | 46 Scheme Administration | 47 • • • • • • • including: related activities for the Pension Fund, relation to accounting and investment Administrator in his statutory role in Team provide support to the Fund in the Treasury and Investments A team of5 full time equivalent staff • Managers; allocation of cash to Investment received; purchases, sales and dividends reconciliation of all Managers’ Accounts of the Pension Fund; preparation of the Annual Report and Council’s Statement of Accounts; Accounts forinclusion in Dorset preparation of the Pension Fund Audit; liaison with External and Internal Fund; day-to-day accounting forthe Pension LGPS; contributions to be invested into the collection of employee and employer related issues. Committee reports relating to benefits preparation of Pensions Fund prospective employers; ad hoc costings for employers and • • • • • • • • • • investments and accounting issues. Committee reports relating to preparation of Pension Fund Pension Fund’s Annual Meeting; Pension Board meetings and the Pension Fund Committee and Local co-ordination of reports for Quarterly employers; of FRS102/ IAS19 information for co-ordination of the production bodies; returns for Government and other completion of statistical and financial allocations; portfolios to their target asset rebalancing of Investment Managers’ Strategy Statement; Strategy Statement and Funding preparation of the Investment Managers, Advisers and Actuary; monitoring and review of Investment Advisers and Actuary; liaison with Investment Managers, balances; investment of the Fund’s surplus cash appointment of Advisers and Actuary; Communities and Local Government. of State at the Ministry of Housing, been the Parliamentary Under Secretary Since February 2020 Luke Hall has Parliamentary Under Secretary State of h) g) f) e) d) c) b) a) priorities 2018 for to 2021 are: Sector Pension Schemes (PSPS) the TPR its statutory duties in respect of Public Following the continuing expansion of The Pensions Regulator (TPR)

administration. through improving governance and promoting good trusteeship preparing for the impact of Brexit; ongoing automatic enrolment duties; ensuring employers meet their challenges that TPR faces; equipping our staff to meet the schemes; regulatory approachesacrossall enhancing and executing effective effective regulation of master trusts; benefit schemes; effective regulation of defined range of regulatory interventions; targeted and work uses a wider that focuses on more proactiveand developing an to approach regulation to be looked at again under the formal to be looked at again under the formal Scheme, they have the right to ask for it affecting them made in relation to the If they are not satisfied with any decision and that they agree with the decision. can, that it is based on the correct details decision they should check, as far as they includes dependants) is notified of a dependants). When the member (this rules that affect the member (or their decisions under the Pension Scheme administering authority have to make employer and the Pension Scheme or dependant’s benefits are paid, the an employer, to the day when benefits From the day a person starts a job with Internal Dispute Resolution Procedure full on page 151. and-publications dorset-pension-fund/about-us/forms- https://www.dorsetpensionfund.org/ is available on the Fund’s website at will be achieved. This policy statement formalising the processes by which this a Communications Policy statement other interested parties. The Fund has communications with its members and establishing and maintaining effective The Pension Fund is committed to Communications and is in reproduced original decision will now have to deal administering authority that made that complained about, the employer or contrary to the decision the member If the nominated person's decision is the their member decision in writing. person”. That person is required to give This guide calls them the “nominated which the member wishes to complain. body that took the decision against carefully by a person nominated by the The complaint will be considered • • complaint, they should make it: If a member needs to make a formal First stage IDRP process: The following gives an overview of the Procedure" (IDRP). name is the "Internal Dispute Resolution been. The complaint procedure's official or administering authority, but it hasn't should have been made by their employer right to use the procedure if a decision complaint procedure. They also have a they want to complain about. when they were told of the decision normally within 6 months of the day in writing, and • • • following circumstances: fresh look at the complaint in any of the scheme administering authority to take a The can member ask the pension Second Stage reconsider their original decision. their discretion, they will be required to should reconsider how they exercised employer oradministering authority nominated person decides that the administering authority, and the of discretion by the employer or about concerned the exercise If the decision the member complained nominated person's decision. with your case in with accordance the have still not received that decision. would give them a decision, and they member (in an interim letter) that they which the nominated person told the it is one month after the date by complaint, since the member lodged your nominated person, and it is 3 months decision or an interim letter the from the has member not received a decision, the nominated person's first-stage the is member not satisfied with

Scheme Administration | 48 Scheme Administration | 49 explained to the member accordingly. made is in and fact correct this can be the Regulations and that the decision be that there is a misunderstanding of lengthy process of IDRP. It could simply resolved without the need to resort to the first instance as many issues can be Pensions Administration team in the please ask them to contact staff in the they are unhappy with a decision made If a member approaches you because about which the member is complaining. original decision (or lack of a decision) do so within 3 years the from date of the the Pensions Ombudsman provided they stage decision, they can take the case to the administering authority's second If the member is still unhappy following decision in writing. consider the complaint and give you their below). The administering authority will the IDRP Employee’s Guide (see link making the complaint are set out within complaint in writing. The time limits for appropriate administering authority their The will member need to send the decision. person not involved in the first stage This review wouldbe undertaken by a the pensions Ombudsman. already started cannot be investigated by Matters where legal proceedings have appropriate Court on a point of law). binding (unless the case is taken to the and his or her decision is final and scheme or matters of fact or law involving maladministration of the determine any complaint or dispute The Ombudsman can investigate and be extended. in certain instances for the time limit to have known about it). There is discretion individual first knew about it (or ought to later, within three years of when the rise to the complaint or dispute or, if within three years of the event that gave be made to the pensions Ombudsman through the IDRP, an application can has not been satisfactorily resolved In cases where a complaint or dispute Pensions Ombudsman and-publications dorset-pension-fund/about-us/forms- https://www.dorsetpensionfund.org/ correspondence can be found at: and the IDRP – Employer’s Wording) for Procedure (IDRP – Employee’s Guide The LGPS Internal Dispute Resolution setting out, among other things, why notice in line with the new requirements fund is required to update their privacy To ensure GDPR compliance, every LGPS individual member and their employer. personal data provided by both the LGPS funds require various pieces of order to administer the pension scheme, protection and rights to individuals. In data, with the key aim of giving greater organisations process and handle on 25 May 2018. GDPR changes how (EU) regulations which came into force (GDPR) is a new set of EuropeanUnion The General Data Protection Regulation General Data Protection Regulations 0800 Call: 011 3797. TPAS: pensionsadvisoryservice.org.uk at the following: administrator. Information can be found they cannot resolve with the scheme query that they may have difficulty which scheme in connection with any pension members and beneficiaries of the TPAS is available at any time to assist The Service (TPAS) Pensions Advisory 0800 917 4487 or they can be contacted on www.pensions-ombudsman.org.uk can be found at The Pensions Ombudsman’s website .

orientation, religion, belief or age. example; sex, race,disability, sexual on grounds of groupmemberships; for all our customers, without discrimination quality and value for moneyservices to Dorset aim to deliver accessible, high- on relevant and objective criteria. employment decisions are based purely similar non-discriminatory criteria. All the requirements of the job and other promoted on the basis of their ability, employees are selected, trained and of Dorset Council to ensure that all its the it community serves. It is the policy that workforce reflects and is part of Dorset County Pension Fund has a Equality Diversity and protection/data-protection.aspx your-council/about-your-council/data- https://www.dorsetcouncil.gov.uk/ view online at: Council’s privacy notices are available to rights under the legislation. The Dorset with additional information about their notice, members will also be provided the data will be retained. Within the the data with and the period for which processing the data, who they share certain data is held, the reason for drive for the Pensions Team. members correspondence with a secure provides an electronic view of Pension license by Hugh Symons. This license Management System, provided under The Pensions Team use an Information the Pensions Team. they can submit online forms and data to employers with secure access where It also provides ‘Your Fund’ a site for and automation of new starter records. any requests member are responded to monitor the ensure volume ofwork, track the lifecycle of an LGPS member, This license provides the ability to by London Pension Fund Authority. Management, provided under license The Pensions Team use CMS for Case actuarial valuation. and the data extracts required at each the generation of scheme documents data, the calculation of pension benefits, system is used for holding membership and developments in best practice. This up to date with changes in regulations provides regular upgrades for to keep by Aquilla Heywood. This licence system is Altair, provided under licence The Pensions Team main administration Information Technology when they may become payable. their benefits and provide an overview of inform the scheme member of the value of members. The statement is intended to statements to its active and deferred required each year to send annual benefits The Pensions Administration Team is Benefit Statements https://www.dorsetpensionfund.org address is supported by Dorset Council. The web is managed by its own officersand The Fund maintains a website that the Council’s intranet. activities have access to the internet and Fund Administration and Investment All Council staff involved in Pension using SAP ERM System. managed in-house by the Pension Fund, provisions. The payment of pensions is contingency and business continuity IT team and includes comprehensive maintained in-house by the Council’s Council’s SAP system. This system is providers and collated on the County a from number ofdifferent payroll The Fund’s financial data is collected

Scheme Administration | 50 Scheme Administration | 51 previous scheme. 10 days of receiving payment the from purchased by the transfer value within Dorset aim to the confirm actual benefits member that the transfer is to proceed. days of receiving the confirmation from payment of the transfer value within 5 & Customs. Dorset aim to request Her required from Majesty’s Revenue any additional essential information details the from previous scheme and a quotation within 10 days of receiving that a transfer value will buy and issue and calculate the estimated benefits the member’s request for transfer details Transfers In: member’s employer. a completed notification the from member within one month of receiving issue a Membership Certificate to a new Membership Certificate: New Active Members of the LGPS. The standards are: efficient and timely service to members in order to ensure that it is providing an service standards that it seeks to meet The Pensions Team has a number of Performance Standards Dorset aim to acknowledge Dorset aim to will pay the lump sum death grant within will pay the lump sum death grant within from the late member’s employer and we receiving all of the information required the benefits payable within 10 days of Deaths: and/or the member. required from the member’s employer 10 days of receiving all of the information member’s tax-free cash lump sum within of the benefits payable and pay the Retirements: wishing to pay extra contributions. of receiving a request from a member to provide information within 10 days Dorset aim Paying Extra Contributions: previous year. by the change in benefit value since the the amount ofAnnual Allowance used service benefits and, tax for purposes estimated current value of death-in- benefits at normal retirement age, the benefits, the value of prospective the estimated current value of accrued Statement to each showing member available each year an Annual Benefit information is held, Dorset will make promptly after the year end and all pay details are employers received from Annual Benefit Statements: Existing Active Members Dorset aim to send details of Dorset aim to send details of Dorset aim to send details Dorset aim to send details Provided preserved benefits. preserved benefits. showing the current value of the member’s Benefit Statement by 31 August annually, make available to each deferred member a Annual BenefitStatements:Dorset aim to Deferred Members payment is received. of the information required to make that the transfer is to be made and all receiving confirmation from the member pay a transfer value within five days of (where appropriate). Dorset aim to Her Majesty's Revenue & Customs member’s contracted-out rights from request and confirmation of the within 10 days of receiving the member’s quotation, guaranteed for 3 months, Out: Transfers the member’s formal request for payment. the end of the month following receipt of Refunds: required from the employer. days of receiving all of the information of the benefit options available within 30 Early Leavers: authorisation from two delegated officers. (or other appropriate documentation) or 10 days of receiving Grant of Probate Dorset aim to pay a refund by Dorset aim to pay a refund by

Dorset aim to send details Dorset aim to send details Dorset aim to issue a by members. communications are very well received pensioner members each year. These Annual newsletters are also sent to and key messages for members. newsletter detailing regulatory changes members together with an annual each year to active and deferred Annual Benefit Illustrations are issued investments and governance. fact sheets, as well as details covering site contains information, formsand member types, and for employees. The its own website, with information for all The Dorset County Pension Fund has service and 18% of deferred members. of active members signed up forthis very successful,with approximately 26% This receive communications. has been run throughbenefit calculations and also change basic details, such as address, and pensioner members the option to facility, which enables active, deferred In 2018, The DCPF launched MSS Altair Member Self Service (My Pension). own pension records online, through Members of the Fund can access their Members’ Self Service (MSS) to the date benefits become payable. available to them, at least 30 days prior member setting out the benefit options has been confirmed wewill write to the Provided Dorset hold an address which Pension, the DCPF online member portal. Please note that this does not affect My information, plus forms and publications. On this website you will find member will be website address 1 from October 2020 30 from September 2020. The new (DCPF) main website will be changing The Dorset County Pension Fund new website County PensionFund Dorset www.dorsetpensionfund.org

. story/mccloud_qanda.php at questions on the national LGPS website information, see the frequently asked do not need to make a claim. Formore protection it will apply automatically - you Illustration this year. If you qualify for the judgment in your Annual Benefit been possible to reflect the impact of the from LGPS. This means it has not made to remove the discrimination exactly what changes need to be The Government is still considering often called the ‘McCloud judgment’. this age discrimination. This ruling is schemes, including the LGPS, to remove will be changes to all main public sector Government has that confirmed there protections do not apply to them. The been discriminated against because the Firefighters’ Pension schemes have younger members of the Judges’ and The Court ofAppeal ruled that other public sector pension schemes. Similar protections were provided in scheme members were introduced. scheme in 2014, protections for older salary to a career averagepension When the LGPS changeda from final McCloud Judgement https://www.lgpsmember.org/news/

Scheme Administration | 52 Government response to same person within any period of 28 or you are, and have been, financially consultation on restricting exit consecutive days. The total amount of all interdependent on each other. payments exit payments Your partner is financially dependent The government has published its on you if you have the highest income. response to the April 2019 consultation Cohabiting partners and the LGPS Financially interdependent means that on restricting exit payments in the public If you are living with a partner they may you rely on your joint finances to support sector. This may primarily affect LGPS be eligible for a cohabiting partner’s your standard of living. It doesn't mean members who are made redundant. pension if they fit the eligibility criteria at the date of your death. You have to have that you need to be contributing equally. For example, if your partner's income is The LGPS regulations will need to be paid into the LGPS on or after 1 April Scheme Administration Scheme Administration | 53 a lot more than yours, he or she may pay amended to allow for the exit cap, 2008 for a pension to be payable to an the mortgage and most of the bills, and and details of how this will apply in eligible cohabiting partner. you may pay for the weekly shopping. practice provided. Further details will be communicated to DCPF members when An eligible cohabiting partner is a partner On your death, a survivor's pension would available. you are living with who, at the date of your death, has met all of the following be paid to your cohabiting partner if: Background conditions for a continuous period of at • all of the above criteria apply at the The Small Business, Enterprise and least 2 years: date of your death, and Employment Act 2015 (‘the 2015 Act’) • you and your cohabiting partner are, • your cohabiting partner satisfies as amended by the Enterprise Act 2016 and have been, free to marry each your pension fund that the above (‘the 2016 Act) provides the power other or enter into a civil partnership conditions had been met for a for HM Treasury to make regulations with each other, and continuous period of at least 2 years implementing a £95,000 cap on exit • you and your cohabiting partner have immediately prior to your death. payments in the public sector. The cap been living together as if you were a of £95,000 will apply to the aggregate married couple, or civil partners, and sum of payments made in consequence of termination of employment. The • neither you or your cohabiting partner relevant payments in scope remain the have been living with someone else same as in the regulations published as if you/they were a married couple on 10 April 2019. The cap also applies or civil partners, and where two or more relevant public • either your cohabiting partner is, and sector exits occur in respect of the has been, financially dependent on you My Pension the amount of pension you build up during Registering for My Pension, the DCPF’s this period will also be reduced. You will online pension portal allows you to view continue to pay pension contributions on your pension benefits at any time. You the pay you receive. can update your address and lump sum death grant nomination on My Pension You can pay Additional Pension and can also upload documents to DCPF Contributions (APCs) to buy extra securely. pension to make up for the pension lost during this period. Your employer does To register for My Pension, please go to not have to pay towards the cost, but Scheme Administration Scheme Administration | 54 https://mypension.dorsetcc.gov.uk/ and they can choose to. click on ‘Sign up to Member Self Service’ at the bottom left of the homepage. Visit https://www.lgpsmember.org/ more/apc/index.php to find out more COVID-19 abut APCs, use an online calculator and download an application form. The National LGPS member’s website contains useful information regarding The GOV.UK website provides more the LGPS and COVID-19. information on support for workers https://www.lgpsmember.org/news/ during the COVID-19 crisis story/covid_19_member_qanda.php https://www.gov.uk/coronavirus/worker- support. Furloughed LGPS members If your employer has put you on furlough, there may be some reduction to your LGPS benefits.

While on furlough, your employer could pay 80% of your wages up to a monthly cap of £2,500. The Government will fund your employer to do this. Employers can choose to top up your pay to 100%, but if you receive less pay when you are on furlough, Actuarial Information date of this report. LGPS Regulations, as amended, as at the 2020. We have taken account ofcurrent to members of the Fund as at 31 March Government Pension Scheme (the LGPS) pension benefits provided by the Local expense calculations in respect of (the Fund), to undertake pension to the Dorset County Pension Fund Council, the administering authority We have been instructed by Dorset Introduction Barnett Waddingham LLP -12June2020 media/5680/valuation-report.pdf at can be found on the pension website The web-link to the Actuary’s Report Prepared in with accordance IAS26 31 March 2020 Pension accounting disclosure as at IAS26 Report Actuary of the Statement Information Actuarial www.dorsetpensionfund.org/

2019 the Supreme Court denied the schemes respectively. On 27 June within the Judicial and Fire Pension cases which relate to age discrimination relation to the McCloud and Sargeant recent Court of Appeal judgement in An allowance has been made for the revalued earnings. benefits based on career average Regulations 2013 and currently provides the Local Government Pension Scheme scheme administered inwith accordance The LGPS is a defined benefit statutory Technical Actuarial (TAS Work 100). Actuarial Standard 100: Principles for This advice complies with Technical that are consistent with IAS19. have adopted methods and assumptions calculating the disclosed numbers we with our understanding of IAS26. In These figures are prepared in accordance relevance to the Fund’s auditor. in particular, this report is likely to be of administering authority and its advisers; This report is addressed to the members’ past or future service benefits. how this judgement may affect LGPS Fund’s liability profile. It is not yet clear Actuary’s Department (GAD) and the on analysis carried out by the Government Fund’s defined benefit obligation based an estimate of the potential impact on the It should be noted that this adjustment is date for furtherinformation. employer briefing note post-accounting section below and in the 31 March 2020 of the McCloud/Sargeant judgement March 2020. Please see the impact defined benefit obligation as at 31 has resulted in a slight increase in the allowed for as a past service cost and liabilities at 31 March 2020 has been The estimated impact on the total the accounts for estimated impact. made in the Fund’s 2018-2019 annual We understand no similar allowance was service schemes, including the LGPS. it expects to have to amend all public released a statement to confirm that and on 15 July 2019 the Government Government’s request for an appeal,

Actuarial Information | 56 Actuarial Information | 57 since we received the data. The data has since we received the data. The data has aware of any material changes or events results of this report. Further, we are not are likely to have a material effect on the been estimated, we do not believe that they Although some of these data items have • • • • Dorset we received from Council: used the following items of data, which pension accounting purposes we have In completing our calculations for Data sources Valuation data normal service cost. basis, which are not anticipated in the have been paid out on an unreduced for the period to 31 March 2020 that Details of any new early retirements March 2019 and 31 March 2020; and estimated where necessary) as at 31 Fund asset statements provided (or Estimated Fund returns based on March 2020; expenditure items for the period to 31 Estimated whole Fund income and (Version 2 dated 8 May 2019); was prepared for accounting purposes the 31 March 2019 IAS26 report which funding purposes and the results of March 2019 which was carried out for The results of the valuation as at 31 retirements in respect of the Fund from We requested data on any early Early retirements membership data, as at 31 March 2019. The table below summarises the statistics Fund membership purposes of this advice. are happy that the data is sufficient for the been checked for reasonableness and we pensioners Deferred Actives Other Bonds Cash Investment Liability Driven Equities Asset breakdown Pensioners summary Member data Diversified Growth Fund Infrastructure Property Multi Asset Credit Total Number 32,946 24,516 22,466 Pensions Salaries/ 427,351 104,902 40,142 £000s 2,713,601 1,343,676 220,608 306,823 152,783 186,305 301,015 120,399 81,992 £000s age Average 31 Mar 2020 46 71 45 is as follows: is as follows: County Pension Fund as at 31 March 2020 The estimated asset allocation for Dorset be different. return on Fund assets over the year may 2020 is estimated to be -10%. The actual bid value basis) for the year to 31 March The return on the Fund (on a bid value to Assets £1,953,100. pension that came into payment was accounting date. The total annual were not allowed for at the previous early retirements during the year which We have been notified of 154 new ending 31 March 2020. the administering authority for the year 100 11 50 11 % 3 8 6 7 4 3,030,486 1,525,656 111,507 214,353 401,129 176,110 138,742 323,272 139,717 £000s 31 Mar 2019 100 13 50 11 % 4 7 6 5 5 following a member’s death. following a member’s death. the life of the member or a dependant normally be payable on retirement for pensions are linked to inflation and will of the Fund or their dependants. These that may be payable in future to members Fund as well as pensions (and lump sums) currently being paid to members of the them. These cashflows include pensions from the Fund and placing a value on projecting future cashflows to be paid The full actuarial valuation involved with IAS19. using financial assumptions that comply the funding valuation as at 31 March 2019, the value of Fund’s liabilities calculated for at 31 March 2020, we have rolled forward To assess the value of the Fund’s liabilities Valuation approach assumptions Actuarial methodsand rather than the Fund. as these are liabilities of employers We have excluded any unfunded benefits Unfunded benefits estimation techniques. may be different that from shown due to the Fund assets as at 31 March 2020 necessary. The final asset allocation of We have estimated the bid values where Appendix 2. for the actual experience is shown in to 31 March 2020. The effect of allowing observed in the reconciliation of liabilities previously, an experience item may be may be different that from assumed allowing for actual experience, which data at 31 March 2019. As a result of a full valuation of funded membership Results are based on a of roll forward date previous accounting the for since Experience itemsallowed from the 31 March 2016 funding valuation. based on a continuation of the roll forward accounting date when the results were This has been updated since the last approach is inappropriate. there appears to be no evidence that this From the information we have received the same as at the latest formal valuation. structure of the liabilities is substantially the underlying assumptions, and that the the Fund has been broadly in line with provided that the actual experience of any material distortions in the results data to 31 March 2020 should not introduce of rolling forward the previous valuation However, we are satisfied that the approach 2020 without completing a full valuation. of the estimated liability as at 31 March It is not possible to assess the accuracy Direction can be found here. Direction can be found here. Details of this outcome and the Ministerial outcome, with effect from 6 April 2016. on 4 December 2018 to implement this Treasury published a Ministerial Direction Age (SPA) before 6 April 2021. HM those individuals reaching State Pension service pension would be extended to the GMP element of individuals’ public pension schemes to fully price protect that the requirement for public service pension schemes consultation, concluding and equalisation of GMP in public service published the outcome to its Indexation On 22 January 2018, the Government schemes can be found here. equalisation of public service pension information on the current method of public service pension schemes”. More achieve equalisation and indexation in impact on the current method used to confirmed that the judgement “does not understanding that HM Treasury have the value of pension liabilities. It is our to reflect the effect this ruling has on adjustments to accounting disclosures of pension schemes have made GMPs between genders, a number Lloyds ruling on the equalisation of As a result of the High Court’s recent Equalisation (GMP) Guaranteed Pension Minimum

Actuarial Information | 58 Actuarial Information | 59 report dated 10 June 2019. report dated 10 June 2019. results of this analysis are set out in GAD’s highest increase in costs/liabilities). The what potential remedy would incur the carried out on a “worst-case” basis, (i.e. of the impact. This analysis was to be authorities should consider the materiality CIPFA briefing note which said that local March 2019. This followed an April 2019 in local authorities’ accounts as at 31 particular, those liabilities to be included judgement on LGPS liabilities, and in possible impact of the McCloud/Sargeant commissioned GAD to report on the and Local Government (MHCLG), of the Ministry of Housing, Communities The Scheme Advisory Board, with consent McCloud/Sargeant judgement Impact of above outcome. placed on the liabilities as a result of the to make any adjustments to the value Therefore we do not believe we need to pay the entire inflationary increase. assumed that the Fund will be required that reach SPAafter this date, we have inflationary increase. For members providing the remainder of the by 6 April 2016, with the Government for members that have reached SPA that the Fund will pay limited increases Our valuation assumption for GMP is Financial assumptions section of this increases which is set out in the is the assumed rate of futuresalary for the Fund. The key assumption of the McCloud/Sargeant judgement GAD to estimate the possible impact We have used this analysis provided by liabilities based on a salary increase assumption of CPI plus1.5% liabilities basedonasalaryincreaseassumptionofp.a. GAD estimated the impact onpastserviceliabilitiestobe 3.2% active of estimated impact of 2.1% of active liabilities. (which is that salaries will increase at 1.0% p.a. above CPI), gives an Adjusting this to reflect the Fund’s own salary increase assumption judgement gives an estimated impact of 2.0% of active liabilities. judgement gives an estimated impact of 2.0% of active liabilities. joined the Scheme who are unlikely to be affected by the outcome of the March 2019 and an approximate adjustment to strip out members who Adjusting this to allow for the additional accrual of liabilities since 31 the Fund's total liabilities at the accounting date). accounting date (i.e. active liabilities are estimated to be 37% of This is equivalent to 0.8% of the Fund's total liabilities at the impact assessment below. We have included a of our summary table on page 4. Fund’s membership can be found in the disclosure. The average age of the 1 of Appendix 2. 1 of Appendix 2. demographic assumptions figure in Table assumptions is set out in the Change in The impact of updating the demographic improvements. parameter of 7.0 and no initial addition to improvement of 1.5% p.a, smoothing Model, allowing for a long-term rate of were then projected using the CMI_2018 multiplier of 85%. These base tables adopted were the S2PA tables with a The post retirement mortality tables updated to use the CMI_2018 Model. for the Fund’s 31 March 2016 valuation, adopted was based on those adopted accounting date when the assumption This has been updated since the last improvements of 0.5% p.a. parameter of 7.5 and an initial addition to improvement of 1.25% p.a, smoothing Model, allowing for a long-term rate of are then projected using the CMI_2018 and 100% for females. These base tables tables with a multiplier of 90% for males mortality tables adopted are the S3PA 31 March 2019. The post retirement valuation, which was carried out as at those used for the most recent Fund assumptions that are consistent with We have adopted a set of demographic Demographic/Statistical assumptions 65 are: The assumed life expectations age from • • • We have also assumed that: Life expectancy fromage 65 (years) 20 years Retiring in today Retiring remain the same. at the previous valuation date will that had taken up the 50:50 option The of the proportion membership tranche retirement age; and will be the pension weighted average age for all tranches of benefit, which Members will retire at one retirement retirement; commutable pension cash for at Members will exchange half of their

Females Males Females Males 2020 31 Mar 26.2 24.7 24.7 23.3 2019 31 Mar 26.6 24.6 24.8 22.9 are as follows: calculate the results in the Appendices The financial assumptions used to Financial assumptions cashflows, discounted at this single the net present value of the notional The discount rate derived is such that Single Equivalent Discount Rate (SEDR). cashflows are then used to derive a duration above. These estimated cashflows based on the estimated cashflows is made using notional An estimate of the Fund’s future liability duration is 21 years. Our estimate of the Fund’s past service March 2020. reference to market conditions at 31 These assumptions are set with as at Assumptions increases Salary increases Pension Discount rate 2020 31 Mar % p.a 2.90 1.90 2.35 2019 31 Mar % p.a 3.90 2.40 2.40 2018 31 Mar % p.a 3.80 2.30 2.55

Actuarial Information | 60 Actuarial Information | 61 have made a further assumption about Prices Index (CPI) rather than RPI, we expected to be based on the Consumer As future pension increases are previous accounting date. consistent with the approach used at the flat beyond the 40 year point. This is inflation spot is curve assumed to be the 30 year point and the BoE implied spot curve is assumed to be flat beyond Lynch AA rated bond corporate yield inflation As curve. above, the Merrill as curve, applying the BoE implied Lynch AA rated bond corporate yield discounted using the annualised Merrill net present value of the cashflows, rate derived is that which gives the same described above. The single inflation approach, using the notional cashflows a Single Equivalent Inflation Rate (SEIR) (RPI) increase assumption is set using the discount rate, the Retail Prices Index Similar to the approach used to derive accounting date. with the approach used at the previous the 30 year point). This is consistent spot curve is assumed to be flat beyond bond corporate yield (where curve the the annualised Merrill Lynch AA rated of the cashflows, discounted using rate, equates to the net present value curtailments arising as a result of the We have calculated the cost of Curtailments with CPI. March 2020 for salaries to rise in line 31 term overlay from March 2016 to 31 promotional scale, allowing for a short- at 1.5% p.a. aboveCPI in addition to a date, salaries were assumed to increase funding valuation. At the last accounting updated in line with the most recent previous accounting date and has been the salary increase assumption at the 1.0% p.a. aboveCPI. This differs from Salaries are assumed to increase at the issue. announcements the from Chancellor on how RPI is calculated and subsequent Statistics Authority’s proposal to change inflation thatfollowing the occurred UK movement in market implied RPI accounting date. This reflects the less than assumed at the previous difference between RPI and CPI is duration of the Fund’s liabilities. The recent independent forecasts and the on the different calculation methods, future differences in the indices, based that this is a reasonable estimate for the below RPI i.e. 1.90% p.a. We believe CPI which is that it will be 0.80% p.a. • • • the appendices below: year ended 31 March 2020 are set out in The results of ourcalculations for the £2,072,942,000. as at 31 March 2020 is a liability of We estimate that the net liability and disclosures Results statement of profit and loss. been included within the service cost in the calculated at £11,552,000. This figure has on IAS19 compliant assumptions is capitalised cost of the additional benefits unreduced early retirement benefits. The former employees became entitled to Over the year, we understand that 154 accounting date accounted for separately. the point of exit, with interest applied to the We calculate the cost of curtailments at liabilities in the Fund. relation to those that affect the pension retirement. The cost assessed is only in payment of unreducedpensions on early on the major assumptions. Appendix 3 shows a sensitivity analysis assets and liabilities during the year; and Appendix 2 details a reconciliation of financial position as at 31 March 2020; Appendix 1 sets out the Statement of Louise Lau FFA Associate questions arising this from report. We would be pleased to answer any under UK pensions legislation. purposes or forother statutory purposes calculations undertaken for funding In particular, they are not relevant for prepared only for the purposes of IAS19. The figures presented in this report are total liabilities). estimated the impact on the total liabilities as at 31 March 2020 to be £36,522,000 (or 0.8% as a percent of We have allowed for the estimated impact of the recent McCloud judgement as a past service cost. We have for the year reconciliation to 31 benefit Appendix 2Asset March 2020 obligation and £89,249,000 in respect of non-vested obligation. *Present value of funded obligation consists of £4,697,294,000 in respect of vested obligation and as at31 March 2020 position Appendix 1Statement financial of present the value of defined benefit obligation the balances of opening &closing of Reconciliation Net pension assetasat Opening defined benefit Opening definedobligation Current service cost Interest cost Net liability in balance Net sheet Closing defined benefit obligation Closing definedbenefit Unfunded pension payments Contributions by Scheme participants and other employers Past service costs, including curtailments Estimated benefits paid net of transfers in Liabilities assumed / (extinguished) on settlements Experience loss/(gain) on defined benefit obligation Change in demographic assumptions Change in financial assumptions Present value of the defined benefit obligation Fair value of Fund assets (bid value) 31 Mar2020 2,072,942 4,786,543 2,713,601 £000s 31 Mar2019 Mar 2020 Year to 31 2,028,157 4,786,543 5,058,643 5,058,643 3,030,486 £000s (151,558) (508,903) (92,309) 168,392 120,097 116,048 28,059 48,074 £000s - - 31 Mar2018 Mar 2019 Year to 31 5,058,643 2,035,448 4,902,826 (119,874) (292,618) 4,902,826 2,867,378 £000s

166,982 244,869 123,922 27,922 £000s 4,614 - - -

Actuarial Information | 62 Reconciliation of opening and closing balances of Year to 31 Year to 31 the fair value of Fund assets Mar 2020 Mar 2019 £000s £000s Opening fair value of Fund assets 3,030,486 2,867,378 Interest on assets 72,464 73,148 Return on assets less interest (365,922) 89,976 Other actuarial gains/(losses) 1,387 - Administration expenses (2,354) (2,354) Actuarial Information | 63 Contributions by employer including unfunded 101,039 94,290 Contributions by Scheme participants and other 28,059 27,922 employers Estimated benefits paid plus unfunded net of (151,558) (119,874) transfers in Settlement prices received / (paid) - - Closing Fair value of Fund assets 2,713,601 3,030,486

The total return on the Fund’s assets for the year to 31 March 2020 is (£293,458,000).

Appendix 3 Sensitivity analysis

Sensitivity analysis £000s £000s Present value of total obligation 4,786,543 Sensitivity to +0.1% -0.1% Discount rate 4,689,545 4,885,645 Long term salary increase 4,795,892 4,777,273 Pension increases and deferred revaluation 4,876,641 4,698,296 Sensitivity to +1 Year - 1 Year Life expectancy assumptions 4,975,652 4,605,076 Governance Governance | 65 Committee Members as at 31 March 2020. Committee Members as at 31 March 2020. The Dorset County Pension Fund Pension Fund Committee Governance Ray Bryan Mark Roberts John Beesley Howard Legg Felicity Rice David Brown Adrian Felgate (Vice Chairman) Peter Wharf (Chairman) Andy Canning Member Committee Committee Dorset CountyPensionFund Dorset Council Dorset Council Poole Council Bournemouth, Christchurch, Dorset Council Poole Council Bournemouth, Christchurch, Poole Council Bournemouth, Christchurch, Representative Scheme Member Dorset Council Dorset Council Representing Administrator Fund Mr AidanDunn Chairman Dorset Council Canning Andy Councillor Vice-Chairman Dorset Council Wharf Peter Councillor Representative Scheme Member Felgate Mr Adrian BCP Beesley John Councillor BCP Felicity Rice Dr Councillor BCP Brown David Councillor Dorset Council Howard Legg Councillor Dorset Council Bryan Ray Councillor Dorset Council Roberts Mark Councillor attendance by members of the Committee. attendance by members of the Committee. The table below summarises the meetings which have taken place including Committee Members Attendance quarterly basis. Fund’s Assets. The Committee meets on a is not involved in the management of the by an investment management expert who performance. The Committee is supported how the scheme is run and monitoring for making investment policy, overseeing Member representative are responsible and Poole and one voting Scheme representing Bournemouth, Christchurch Dorset Councillors, three Councillors A Committee of elected members, five of the Fund to the Pension Committee. The Council delegates the management Committee Structure September 2019 Pension Fund Committee. *Adrian Felgate replaced Andrew Turneras the Scheme MemberRepresentative with effect the from Ray Bryan Peter Wharf Mark Roberts John Beesley Howard Legg Felicity Rice David Brown Andy Canning Andrew Turner* Adrian Felgate* Committee Member 2019 20 Jun ü ü ü ü ü ü ü ü ü û 2019 12 Sep ü ü ü ü ü ü ü ü ü û

• • • the assets of the Fund as follows: all aspects relating to the investment of Committee is responsible for monitoring of reference are set out belowand the The Pension Fund Committee terms Committee Responsibilities 2019 27 Nov allocation decisions. Approval and review ofasset Fund. investment strategy of the Pension Approval and review ofthe overall objectives for the Pension Fund. Setting and monitoring performance ü ü ü ü ü ü ü ü û û 2020 12 March ü ü ü ü ü ü ü ü û û Total 4 4 4 3 4 3 4 4 1 3

rights Voting ü ü ü ü ü ü ü ü ü ü

* • • • • • • • • asset allocation. Committee will still retain control over the Fund is a member. The Pension Fund Partnership, of which Dorset County Pension will ultimately transfer to the Brunel Pension LGPS funds progresses, this responsibility Fund Committee but as national pooling of This had been the responsibility of the Pension Approval of key policies and statement: Pension Fund activities. address findings any review of from Agreeing and monitoring actions to Government Pension Scheme. Authority discretions the for Local Setting and approving Administering dismissing) thePensionFundCustodian. Appointing (and, when necessary, dismissing) the Pension Fund Actuary. Appointing (and, when necessary, dismissing) Investment Consultants. Appointing (and, when necessary, dismissing) Investment Managers*. Appointing (and, when necessary, Managers and investments. monitoring Performance Investment omnctos Strategy Communications - Compliance Governance - - - Statement. Statement. Funding Strategy Statement. Investment Strategy Statement.

Governance | 66 Governance | 67 • • • interests which are to: 2011 regarding disclosable pecuniary the requirements of the Localism Act Councillors are required to comply with Conduct of Code aspx?committeeid=434 dorset.moderngov.co.uk/ieListMeetings. County Council website at minutes are published on the Dorset Pensions Committee agendas and members of the public. Pensions Committee meetings are open to Transparency and Accountability the clerk). use a notification available form from within 28 days and you are asked to Register (if not this must be done it has been entered in your Council’s Monitoring Officer (in writing) and that interest to your ownCouncil’s Check that you have notified your necessary take advice. disclosable pecuniary interest and if Committee in advance about your Inform the Secretary to the pecuniary interest. relevant person has a disclosable on this agenda in which you ora Check if there is an item of business https:// Council’s Monitoring Officer. dispensation has been obtained the from and decided in committee, unless chamber when the matter is discussed instance the withdrawing or from room such an interest in Council business, for member must take when they have and sets out the action an elected about “disclosable pecuniary interests” Council. The Code also contains rules who workfororon behalf of the the compromise impartiality of those bully, intimidate or doanything to treat others with respect and not to which require elected members to on ethics and standards of behaviour The code includes general provisions should be addressed. sets out howany conflicts of interest code ofconductforelected members’ members acting as trustees and the The Pension Fund is governed by elected Interest of Conflicts • any consideration of the item. to speak and/or vote, withdrawfrom and in the absence of a dispensation Disclose the interest at the meeting Dorset County PensionFund Dorset Local The Pension Board for the Member Representative. There is currently a vacancy fora Scheme Pension Board as at 31 March 2020. The current membership of the Local Pension Fund created a Local Pension Board. With effect from 1 April 2015 Dorset County Mary O'Sullivan Julie Strange James Stevens Shortell Councillor David Adam Richens Jeff Morley Paul Kent (Chairman) Member Board Membership Current The Pension Board Local University Bournemouth Representative Arts Employer Police Representative - Dorset Employee Scheme Member Representative - Active Scheme Member Council Representative - Dorset Employer Council Christchurch, Poole - Bournemouth, Employer Representative Active SchemeMember Nominated by Unison - Representative - Scheme Member Scheme member Self-Nominated Retired Representing • • • • • Member board Local Update due to the lockdown. There was no March 2020 meeting . Scheme Member Representative for the Board. Julie strange is the new as an Employer Representative of Dorset Police, so can no longer serve John Jones left the employment of attend Local Pension Board meetings. of the Council and will no longer Jason Vaughan left the employment University Bournemouth. Representative on behalf of the Arts Mary O’Sullivan joined as an Employer Board for the June 2019 meeting and Councillor David Shortell joined the May 2019 elections. announced he was not standing at the Councillor AndrewCattaway who Kent replacing the previous Chairman The new Interim Chairman is Paul • • • to assist the Scheme Manager to: the Public Service Pensions Act 2013 is as defined by sections 5 (1) and (2) of The function of the Local Pension Board the Pension Board Function of Local attendance by members of the Board. which have taken place including The table below summarises the meetings Members The Board Attendance Local Member Pension Board Luke White Mary O' Sullivan James Stevens David Shortell Councillor Adam Richens Jeff Morley John Jones Paul Kent regulations may specify; in such other matters as the LGPS the LGPS by the Pensions Regulator; requirements imposed in relation to to secure compliancewith administration of the LGPS; relating to the governance and regulations and any other legislation to secure compliancewith the LGPS

2019 25 June ü ü ü ü ü û û û 2019 24 Sep ü ü ü ü ü û û û 2020 3 Dec ü ü ü ü ü û û û Total 2 2 2 3 0 2 1 3

Governance | 68 Governance | 69 Scheme Manager. which are the responsibility of the the Scheme Manager nor make decisions Local Pension Board does not replace by the Scheme Manager. the However, Manager, including doing work requested interpreted as helping the Scheme Assisting the Scheme Manager is any of its functions. facilitate, or is conducive to, the discharge of power to do anything which is calculated to 106 (6), the Local Pension Board has the In accordance with Governance Regulation the LGPS AdvisoryBoard. government, The Pensions Regulator and with due regard to guidance issued by issued by the Pension Regulator and of localgovernmentpension schemes on the governance and administration and complies with the code ofpractice administered effectively and efficiently Pension Fund (DCPF) is managed and help to ensure that the Dorset County The Local Pension Board will also Regulator. pension schemes issued by the Pension and administration of local government the code ofpracticeon the governance complies effectively and efficiently with The Local Pension Board will ensure it the Unions, with Unison as lead union. include at least one member nominated by Scheme member representatives shall Council, plus two others. Bournemouth, Christchurch and Poole shall of Dorsetcomprise Council and Scheme employerrepresentatives Local Pension Board’s membership. and shall together form the majority of the number, with a minimum of four in total, representatives shall be appointed in equal Scheme employer and member • • members and be constituted as follows: The Local Pension Board shall consist of six Membership the Pension Board of Local Manager in order to carry out its function. request information from the Scheme The Local Pension Board is entitled to the Fund’s assets. extend to the operational investment of For the avoidance of doubt,this does not DCPF, including funding and investments. governance and administration of the is interpreted as all covering aspects of The remit of the Local Pension Board four scheme member representatives. four employerrepresentatives; and • • The is responsiblefor: Pension Board • • • member, and DCPF will contact: Committee, will be asked to nominate their Council, via the Standards and Governance members of the Local Pension Board, Dorset As part of the process for selecting is a specific requirement of the regulations. member of the Local Pension Board. This Pension Scheme regulations may be a any function under the Local Government who is responsible for the discharge of administering authority (Dorset Council) No officer or elected member of the delegated responsibilities for the elected members and officers with plan of the Pensions Board and Reviewing and monitoring the training the Pension Fund; meet the objectives performance of Scrutinising the progress of actions to representatives. eligible to stand as scheme member deferred pensioner members will be interest. Active, pensioner and all Scheme membersto canvass member representatives; Unison, as lead union, to nominate Council to seek their nominations; Bournemouth, Christchurch and Poole • • • • • • • • • Management Agreements; and Managers with Investment Reviewing compliance of Investment services; improved customer Assisting in the development of Reviewing internal audit reports; Scrutinising data quality; on pension matters; when officers are making decisions regulations are being complied with, Ensuring pension rules and Valuation of the Pension Fund; Committee, including the Triennial commissioned by the Pension Fund Reviewing the compliance of projects discretions; including the administering revised policies and procedures, Reviewing the implementation of scheme employers; Register and risk monitoring of Reviewing and monitoring the Risk consultant; the custodian and the investment administration service, the actuary, partners, including the pensions of externalperformance business Reviewing and monitoring the the Pension Fund; management and administration of board/ pension-fund/about-us/local-pension- at Dorset County Pension Fund website additional reports are published on the Pension Board agendas, minutes and Transparency and Accountability • www.dorsetpensionfund.org/dorset- the Pension Fund activities. to address finding any from review of Reviewing progress of agreed actions

Governance | 70 Pension Fund Accounts County Council, and its compliance with in the statement of accounts ofDorset the pension fund financial statements the pension fund annual report with pension fund financial statements within my opinion on the consistency of the Our responsibility is to report to you applicable law. financial statements in with accordance the preparation of the pension fund's Financial Officer is responsible for Officer's Responsibilities, the Chief Statement of the Chief Financial As explained more fully in the the and auditor Officer Financial the Respective responsibilitiesof Chief the related notes 1 to 22. the Account, Net Assets Statement and 31 March 2019, which comprise the Fund financial statements for the year ended We have examined the pension fund Pension Fund Financial Statements. on the County PensionFund Dorset Committee of the Members to the Independent Auditors Statement Fund Accounts Pension To come opinion[s] on those financial statements. accounts describes the basis of our authority's full annual statement of Office. Our report on the administering Reporting, issued by the National Audit with Auditor Guidance Note 07 -Auditor We conducted my workin accordance in the annual report. and of investment included performance summaries of key financial information other information consists only of the pension fund financial statements. The material inconsistencies with the of any apparent misstatements or for myreportif we becomeaware report and consider the implications contained in the pension fund annual We also read the other information 2018/19. Accounting in the United Kingdom Code of Practice on Local Authority applicable law and the CIPFA/LASAAC this statement. accounts (31 July 2019) and the date of our reporton the full annual statement of any events between the date we signed We have not considered the effects of the United Kingdom 2018/9. Practice on Local Authority Accounting in law and the Code CIPFA/LASAAC of March 2019 and with comply applicable County Council for the year ended 31 annual statement of accounts of Dorset annual report are consistent with the full statements included in the pension fund In our opinion, the pension fund financial Opinion 22 October 2019 Deloitte LLP Cardiff, UK For and on behalf of Ian Howse (Appointed auditor)

Pension Fund Accounts | 72 Pension Fund Accounts | 73 additional detail to the figures presented. by supplementary notes providing Each ofthe statements is accompanied Account and the Net Assets Statement. two corestatements, the Pension Fund The Pension Fund contain Accounts Ended 31 March 2020 for the Pension FundAccount Year Fund Accounts (17,771) (98,737) (5,404) (3,604) 10,439 18,693 27,922 94,290 £’000 1,109 (260) (296) 481 71 2018-19 3,029,952 2,868,218 (120,112) (14,345) (12,007) 161,734 173,741 143,208 128,150 122,212 Dealings with members, in the employers others Fund and directly involved (5,700) 30,533 £’000 2,338 5,938 Closing net assets of the net assets of fund 31 Closing March Opening net assets of the Opening net assets of fund 1April benefits duringthe year Net increase/(decrease) for in assetsavailable Net return on investments changes inthe investments value of investments and of on disposal Profit/(loss) Taxes on income Income from property funds Income from Rents properties from Dividends equities from Transfers to other pension funds Other investment income Interest on cash deposits Investment Income Management expenses Refunds of contributions management expenses Fund including Net additions/(withdrawals) leavers of on account Payments to and members others and from dealingswith Net additions/(withdrawals) Transfers in fromother pension funds Member contributions Employer contributions Total additions from dealingwith members Total additions etc Contributions Death benefits Commutations and retirement grants Pensions Benefits Fund Account Note 12 11 10 8 7 9 (104,933) (34,855) (19,875) 108,553 (3,111) 12,025 10,799 28,216 £’000 1,176 (135) (347) 101 565 2019-20 2,713,601 3,029,952 (316,351) (286,783) (311,314) (127,919) (29,568) (15,559) (14,009) (35,202) 147,562 136,769 24,531 10,793 £’000 2,104,713 421,913 103,022 281,480 (8,330) (1,686) 29,469 80,275 31 March 2019 £’000 4,222 8,689 3,781 1,930 (120) (534) 395 733 3,025,386 3,029,952 3,024,095 (8,984) (1,686) 12,911 £’000 1,930 395 Investment assets Pooled investment vehicles Brunel Pension Partnership Ltd Long term investments Overseas equities (quoted) UK equities (quoted) Net tofundbenefits assets available Deferred income Other current liabilities Unpaid benefits Current liabilities Other current assets Contributions due employers from Current assets Total net investments Other investment liabilities Investment liabilities Other investment assets Derivative contracts Cash & cash equivalents Property Private equity Other long term debtors Long term debtors Net Assets Statement Note 14 13 16 15 2,115,368 160,536 264,665 (5,917) (2,316) (9,757) 31 March 2020 11,251 17,612 54,925 98,085 £’000 5,191 3,353 (787) 427 965 - 2,698,426 2,713,601 2,696,537 (6,704) (2,316) 22,803 £’000 427 965

Pension Fund Accounts | 74 Pension Fund Accounts | 75 committee of the Council. Pension Fund Committee, which is a The fund is overseen by the Dorset County within other national pension schemes. firefighters are not included as they come county area. Teachers, police officers and scheduled and admitted bodies within the other councils and a range of other pensionable employees of the Council, provide pensions and other benefits for scheme administered by the Council to It is a contributory defined benefit pension - - - administered in with: accordance Service Pensions Act 2013. The fund is The scheme is governed by the Public a) General by Dorset Council ("the Council"). Pension Scheme (LGPS) and is administered Fund") is part of the Local Government The Dorset County Pension Fund ("the Note 1.the Description of Fund Accounts Notes tothe

of Funds) Regulations 2016. the LGPS (Management and Investment 2014 (as amended) Savings and Amendment) Regulations the LGPS (Transitional Provisions, (as amended) (LGPS) Regulations 2013 the Local GovernmentPension Scheme

- - include the following: Organisations participating in the Fund outside the scheme. make their own personal arrangements join the scheme, remain in the scheme or employees are free to choose whether to Membership of the LGPS is voluntary and b) Membership

outsourcing to the private sector. a local authority function following or private contractors undertaking and similar not-for-profit organisations, bodies include voluntary, charitable Fund and the employer. Admitted admission agreement between the in the fund under the terms of an bodies, Admitted of the Fund. automatically entitled to be members bodies, Scheduled which participate which are Membership details are set out below: 31 March 2019 73,729 24,572 22,370 26,369 14,345 12,322 18,323 1,238 8,989 1,347 8,701 7,544 309 418 502 'Undecided' members Total Members Total Deferred Pensioners Admitted Bodies Other Scheduled Bodies Total Pensioners Administering Authority Admitted Bodies Other Scheduled Bodies Total Employees Admitted Bodies Other Scheduled Bodies Administering Authority Administering Authority Total Employers Deferred Pensioners Pensioners Employees 31 March 2020 73,959 24,757 23,330 24,548 14,541 12,967 17,660 1,324 1,220 8,996 1,377 8,986 6,492 317 396 disability pensions and death benefits. also provided including early retirement, Index. A range of other benefits are annually in line with the Consumer Prices rate of 1/49th. Accrued pension is uprated pensionable pay in that year at an accrual members accrue benefits based on their became a career average scheme, whereby service. From 1 April 2014, the scheme pensionable pay and length of pensionable under the LGPS were based on final Prior to 1 April 2014, pension benefits d) Benefits 26.6% of pensionable pay. contribution rates range from 9.5% to as at 31 March 2016. Currently, employer for 2019-20 were based on the valuation at 31 March 2019 although contributions valuations. The last such valuation was set based on triennial actuarial funding March 2020. Employers’ contributions are pay for the financial year ending 31 ranged from 5.5% to 12.5% of pensionable Pension Scheme Regulations 2013 and accordance with the Local Government made by active members of the Fund in investment earnings. Contributions are Benefits are funded by contributions and c) Funding appending an actuarial report. has opted to disclose this information by report prepared for this purpose. The Fund the accounts or by appending an actuarial the net assets statement, in the notes to the option to disclose this information in The Code gives administering authorities value of promised retirement benefits. take into account the actuarial present the end of the financial year nor do they pensions and benefits which fall due after do not take account of obligations to pay available to pay pension benefits. They The accounts report on the net assets for 2019-20. accounting standards have been identified issued but not yet adopted. No such disclosure of any accounting standards Paragraph 3.3.1.2 of the Code requires sector. (IFRS), as amended for the UK public International Financial Reporting Standards 2018-19 ("the Code"), which is based upon Accounting in the United Kingdom CIPFA Code of Practice on Local Authority been prepared in accordance with the at 31 March 2020. The accounts have financial year and its financial position the Fund's transactions for the 2019-20 The statement of accounts summarise Preparation Note 2. of Basis

financial assets. until future years are classed as long term current financial asset. Amounts not due the year but unpaid will be classed as a year the event arose. Any amount due in early retirements are accounted for in the contributions in respect of ill- health and employing body. Additional employers’ certificate issued to the relevant Fund actuary in the rates and adjustment accounted for on the basis advised by the Employer deficit fundingcontributionsare actuary for the period to which they relate. percentage rate recommended by the Fund Employer contributions are set at the which rise according to pensionable pay. common percentage rates for all schemes accordance with LGPS regulations, using Employee contributionratesare set in an accruals basis as follows: Normal contributions are accounted for on income Contribution Fund Account: Policies Accounting Note 3. Summary Significant of going concern basis. The accounts have been prepared on a

Pension Fund Accounts | 76 Pension Fund Accounts | 77 recognised at the date of issue. Any amount recognised at the date of issue. Any amount Distributions from pooled funds are financial asset. the net assets statement as a current of the reporting period is disclosed in Any amount not received by the end date the shares are quoted ex-dividend. Dividend income is recognised on the or origination. instrument as at the date of acquisition effective interest rate of the financial Fund as account it accrues, using the Interest income is recognised in the Investment income transfer agreement. for in with accordance the terms of the Bulk (group) transfers are accounted Transfers In (Note 8). a receipts basis and are included in scheme benefits are accounted for on contributions (see below) to purchase proceeds oftheir additional voluntary in from memberswishing to use the for when received or paid. Transfers Individual transfers in/out are accounted who have either joined or left the Fund. Transfers in and out relate to members from other Transfers to and schemes has been approved. liabilities, providing that payment in the net assets statement as current amounts due but unpaid are disclosed as at the end of the financial year. Any include all amounts known to be due Pensions and lump-sum benefits payable Benefits payable during the year. realised and unrealised profits/losses recognised as income and comprise all (including investment properties) are Changes in the value of investments contractually due. turnover rents, are only recognised when than with the passage of time, such as amount ofa factor that changes other Contingent rents based on the future rental over the income, term ofthe lease. recognised as an integral part of the total lease. Any lease incentives granted are straight-line basis over the term ofthe owned by the Fund is recognised on a operating from leases on properties primarily ofrental income. Rental income Property-related income consists statement as a current financial asset. period is disclosed in the net assets not received by the end of the reporting recognised in the fund account. changes in the fair value of the asset are this date any gains or losses arising from contractual acquisition of the asset. From on the date the Fund becomes party to the is recognised in the net assets statement as at the reporting date. A financial asset financial statements on a fair value basis All investment assets are included in the assets Financial Statement: Assets Net on an accruals basis. of expenditure are charged to the Fund Management Expenses (2016). All items for LocalGovernmentPension Scheme with the CIPFA guidance Accounting management expenses in accordance The Fund discloses its pension fund Management expenses fund expense as it arises. tax Irrecoverable is accounted for as a origin, unless exemption is permitted. suffers withholding tax in the country of sold. overseas Income from investments tax on the proceeds ofinvestments interest received and capital from gains such is exempt UK incometax from on 36 of the Finance Act 2004 and as scheme under Section 1(1) of Schedule The Fund is a registered public service Taxation specific risks arising its from investment instruments to manage its exposure to The Fund uses derivative financial Derivatives of the reporting period. purchases and sales outstanding at the end bank accounts, overseas investments and cash balances held in foreign currency market exchange rates are used to value at the date of transaction. End-of-year spot been accounted for at the spot market rates of investments in foreign currencies have Dividends, interest and purchases and sales Foreign currency transactions Standards. See Note 17 for moredetails. Chartered Surveyors’ (RICS) Valuation with accordance the Royal Institute of valuers on a fair value basis and in year-end date by independent external Properties are valued annually as at the Freehold leasehold properties and (PRAG/Investment Association, 2016). Guidance on Investment Disclosures guidelines recommended in Practical the Fund has adopted the classification of disclosing levels of fair value hierarchy, IFRS 13 (see Note 17). For the purposes with the requirements of the Code and determined at fair value in accordance in the net assets statement have been The values of investments as shown in value of investments. in the fund account as part of the change eventual settlement date are recognised contract date, the year-end date and the in the fair value of the liability between gains or losses arising changes from value as at the reporting date, and any relating to investment trading at fair Fund recognises financial liabilities Fund becomes party to the liability. The net assets statement on the date the A financial liability is recognised in the liabilities Financial year-end date plus interest. accrued outstanding principal receivable as at the statement at amortised cost, ie the cost are carried in the net asset Financial assets classed as amortised receivables Loans and changes in value. and that are subject to minimal risk of convertible to known amounts of cash liquid investments that are readily Cash equivalents are short-term, highly held by the Fund’s external managers. demand deposits and includes amounts Cash comprises cash in hand and cash equivalents Cash and derivatives for speculative purposes. activities. The Fund does not hold disclosed for information in Note 21. of funds) Regulations 2016 but are Scheme (Management and Investment 4(1)(b) of the Local GovernmentPension accounts in with accordance Section the Fund. AVCs are not included in the are invested separately from those of for its members, the assets of which voluntary contribution (AVC) scheme The Fund provides an additional voluntary contributions Additional to the accounts. by way of an actuarial report appended value of promised retirement benefits opted to disclose the actuarial present permitted under the Code, the Fund has 19 and relevant actuarial standards. As International Accounting Standard (IAS) in accordance with the requirements of triennial basis by the scheme actuary retirement benefits is assessed on a The actuarial present value of promised retirement benefits Actuarial present promised value of administration costs. on an accruals basis and included in Any interest charged is accounted for principal repayable plus interest. accrued asset statement is the outstanding cost ie the amount carriedin the net amortised cost are carried at amortised Other financial liabilities classed as

Pension Fund Accounts | 78 Pension Fund Accounts | 79 is in line with accepted guidelines. intervening years. The methodology used actuary, with annual updates in the every three years by the appointed The net Fund liability is re-calculated Pension fundliability policies accounting judgements Note 4. Critical in applying the notes (see Note 23). but are disclosed by way ofnarrative in recognised in the net asset statement Contingent assets and liabilities are not financial obligation reliably. sheet date to measure the value of the that it is not possible at the balance where a provision would be made, except liabilities can also arise in circumstances of future events. occurrence Contingent be or otherwise confirmed by the obligation whose existence will only end giving rise to a possible financial event has taken place prior to the year- A contingent liability arises where an of future events. occurrence only be confirmed orotherwise by the possible asset whose existence will event has taken place giving rise to a A contingent asset arises where an liabilities contingent Contingent assetsand of historical experience, current trends Estimates and assumptions take account that affect the reported amounts. judgements, estimates and assumptions requires management to make The preparation of financial statements uncertainty future other and major sources of Note 5. Assumptions madeaboutthe on the net asset statement at fair value. Code, therefore the properties are retained classifications permitted by IAS 7 and the operating lease arrangements under the that these contracts all constitute tenants. The Fund has determined which are leased commercially to various a number of directly owned properties The Fund’s property portfolio includes Directly heldproperty short-term yield/return. longer term investment growth and terms of the balance struck between management policies, for example in Fund’s most significant investment contribution rates and underpin the re-valuations are used to set future summarised in Note 19. Actuarial agreed with the actuary and have been underlying assumptions which are variances based on changes to the This estimate is subject to significant a significant length of time after the private equity investments are produced Quarterly valuation statements for involved in the valuation. as such there is a degree of estimation Investments are not publicly listed and Capital Valuation Guidelines (2012). International Private Equity and Venture at fair value in with accordance Private equity investments are valued (Note 17) investments Private equity about the assumptions to be applied. to provide the Fund with expert advice firm ofconsulting actuaries is engaged rates and returns on Fund assets. A changes in retirement ages, mortality discount rate used, salary increases, complex judgements relating to the pensions depends on a number of Estimation of the net liability to pay (Note 20) benefits retirement value ofpromised Actuarial present are as follows: material adjustment the following year for which there is a significant risk of The items in the net asset statement assumptions and estimates made. outcomes could be different the from and future expectations, however actual that provide additional information about authorised for issue. There are events date when the financial statements are the end of the reporting period and the unfavourable, that between can occur There are events, both favourable and Note 6. Events after the reporting date impacts of COVID-19 on property values. uncertainty’ clause due to the potential March 2020 include a ‘material valuation investment property assets as at 31 The independent valuation of the Fund's available data. possible management uses the best on observable data but where this is not these valuation techniques are based and leasehold property. Where possible property funds and directly held freehold determine the carrying amountofpooled Valuation techniques are used to property funds(Note17) Freehold, leasehold propertyand pooled falls experienced in March 2020. valuations this year following the market This had lead to particular uncertainty in valuations are included in the accounts. quarter end, and consequently 'lagged' position or performance of the Fund. estimate the impact on the financial this time, and it is not possible to reliably COVID- 19 pandemic remains unclear at volatility. The duration and impact of the markets have experienced significant economic conditions, and global financial fiscal and monetary interventions to support and central banks have responded with indefinite periods of time. Governments to cease or limit operations for long or countries, organisations are being forced economies around the world. In many COVID-19 has severely impacted many Since 31 December 2019, the spread of COVID-19 the Fund's assets and liabilities. have short and long term implications for agreed, but it is expected that these will future trading agreements are still to be and interact after that. The terms of on how the parties will transact business and further work negotiation is required there is a transition period during which offiicially left the Union European (EU), Whilst the United Kingdom has now Brexit period (non-adjusting events). events that after the occur reporting reporting period (adjusting events), and conditions that existed at the end of the By category: Note 7.receivable Contributions 2020 have not been adjusted. statements for the year ended 31 March of the Fund. Accordingly the financial financial position and/or performance estimate the consequences on the events as it is not possible to reliably These are deemed to be non-adjusting 2018-19 122,212 94,290 27,922 22,325 68,282 £'000 3,575 101 7 - contributions Voluntary additional recovery) service costs (deficit Contributions re past service costs Contributions re future Employer contributions employers Exit payments from early retirements Augmentation cost of contributions Total employer receivable Total contributions employers Exit credits to Member contributions Member 2019-20 108,553 136,769 28,216 26,648 71,672 £'000 1,138 9,095 - -

Pension Fund Accounts | 80 Pension Fund Accounts | 81 the liabilities for all LGPS members of the the liabilities for all LGPS members of the included a group transfer of £25M to fund Transfers to other pension funds in 2019-20 Leavers Note 10. of Payments onAccount to and of employer: By type Note 9. Benefits payable group transfers to the Fund in 2019-20. were individual transfers, there were no All transfers in other from pension funds funds Note 8. Transfers in fromother pension of employer: By type 2018-19 2018-19 120,112 122,212 72,131 40,151 83,016 35,391 £'000 £'000 7,830 3,805 Admitted bodies Admitted bodies Total benefits payable Total benefits receivable Total contributions Other scheduled bodies Administering authority Other scheduled bodies Administering authority 2019-20 2019-20 127,919 136,769 75,227 44,791 87,271 45,023 £'000 £'000 7,901 4,475 during the year. of the management expenses incurred The table below shows a breakdown Note 11. Management expenses pension funds were individual transfers. Pension Fund.Allothertransfersoutto that have now transferred to the Wiltshire Dorset & Wiltshire Fire and Rescue Authority consisted of: Investment management expenses 2018-19 2018-19

14,345 11,991 10,002 11,991 £'000 £'000 1,745 282 609 123 385 386 813 management fees Investment Administrative expenses expenses Investment management expenses Total management Performance related fees governance costs Oversight and Custody fees Transaction costs Transition costs management expenses management Total investment Other fees and costs 2019-20 2019-20

14,009 11,969 11,969 £'000 £'000 9,525 1,538 429 502 144 245 677 949 investment. valuation of the units in that pooled statements but are reflected in the not separately identified in the financial their structure and consequently are These vehicles retain income within held in Pooled Investment Vehicles. in this category ofinvestment being is a result of all of the Fund's holdings The absence of fixed interest income loan as at 31 March 2020. 2018-19) and there was no stock on stock from lending was £39k (£71k in except for the voting rights. The income benefits as a stockholder are retained equity stock held by the Fund. All lending income from UK and overseas Other investment income includes 2019-20 (£1,152k in 2018-19). of operating expenses of £1,019k in Rents properties from are shown net Note 12. Investment income have been charged to the fund account. identifiable. All other transaction costs and sales costs and not separately therefore embedded within the purchase spread of these investments and are into in account calculating the bid/offer pooled investment vehicles are taken Transaction costs associated with

investments as at the reporting date. of the market valuation of the Fund's The following table summarises details Note 14. Investments was £427k (£395k at 31 March 2019). Brunel's most recently audited accounts of each fund's shareholding based on each fund at a cost of £840k. The value of Brunel, with share capital invested by Each ofthe ten funds own an equal share and Wiltshire LGPS funds. Gloucestershire, Oxfordshire, Somerset, Devon, Dorset, Environment Agency, the Avon, Buckinghamshire, Cornwall, to oversee the investment assets for Partnership Ltd (Brunel) has been formed pool investment assets, Brunel Pension investment regulations for LGPSfunds to In response to the requirements of the Note 13. Long term investments 12.50 20.20 14.00 4.60 7.10 2.70 9.30 1.00 0.00 31 March 2019 % Market Value 139,717 379,228 613,642 214,353 281,480 421,913 139,717 281,051 187,596 374,013 214,353 281,480 200,402 221,511 80,275 29,469 98,177 52,033 46,925 32,091 14,932 14,537 £'000 1,259 395 395 ------CQS Credit Multi Asset Fund Multi AssetCredit(MAC) Equities Global - Quoted Brunel Emerging Markets Equities Brunel Global High Alpha Equities LGIM WorldDeveloped Equities (passive) LGIM SmartBeta Fund (passive) JP Morgan EmergingMarkets Diversified Equity Brunel (UK Equities) UK Equities - Quoted LGIM UKEquityIndex (passive) UK Smaller Companies Schroder Equity Fund RLAM Corporate Bond Fund Pooled Vehicles Investment CBRE Global Investors Bonds Property (directly owned) Description Private Equity HarbourVest Wellington Investec Aberdeen Standard Capital Dynamics Global Secondary Fund V Neuberger Berman Private Equity ImpactFund Ardian LBO Fund Neuberger Berman SCIOP IV Brunel Pensions Partnership Long Term Investments UK Equities - Quoted Investec Wellington Overseas Equities - Quoted 120,339 606,013 477,121 220,608 264,665 160,536 120,399 112,158 168,225 241,856 130,583 304,674 220,608 264,665 160,497 98,085 11,251 83,774 41,864 55,016 34,001 11,251 £'000 4,509 2,851 1,288 31 March 2020 427 420 427 Market Value 39 - - 22.50 17.70 4.50 8.20 9.80 3.60 0.40 6.00 0.00 %

Pension Fund Accounts | 82 Pension Fund Accounts | 83 March 2020 (£847M at 31 March 2019). Partnership are valued at £1,062M at 31 management of Brunel Pension Investment assets under the than 5% of total net assets. each of which represent substantially less vehicles made up of underlying investments total net assets are in pooled investment Any single investments exceeding 5% of 100.00 69.50 13.30 0.00 0.10 3.40 4.60 5.80 0.00 1.40 31 March 2019 % Market Value 2,104,713 3,024,095 103,022 401,129 138,742 176,110 401,129 176,110 41,792 51,897 86,845 13,415 17,183 2,095 £'000 8,255 2,939 733 - - Derivatives Cash &Equivalents Investment Receivables/(Payables) Total - Pooled Investments Total -Pooled Insight LDI Fund Total Investments Liability DrivenInvestment Infrastructure Hermes GPE / Infrastructure Funds IFM Global Infrastucture Fund Barings Dynamic Asset Allocation Fund Diversified GrowthFunds Secured Income Funds Standard Life UK Shopping Centre Trust Lend Lease Retail Partnership Description CBRE UK LongIncomePropertyFund Greencoats Secured IncomeFund Aberdeen Standard Long Lease Property Fund Property 2,115,368 2,696,537 306,823 186,305 152,783 306,823 104,470 152,783 (9,757) 54,925 36,350 81,835 10,333 16,265 1,037 8,966 £'000 6,655 8,966 3,097 31 March 2020 Market Value 100.00 78.60 11.50 -0.40 2.00 0.00 6.90 5.70 0.30 1.30 % fund during the financial year. market valuation of investments in the of purchases,sales and changes in the The following table summarises details investments derivatives and movements in of Note 15. Reconciliation open forward currency contracts. currency open forward March 2020, the Fund held the following Fund's global equties managers. As at 31 within the portfolios managed by the Dollar, and Euro Japanese Yen exposure rates, the Fund hedges 50% of the US associated with fluctuating currency overseas stock. To reduce the volatility of the Fund's equity portfolio is in diversification a significanct proportion reduce risk. To maintain appropriate to hedge liabilities or exposures to The Fund's holdings in derivatives are derivatives Note 16. of Analysis Net at 31 Forward Currency March 2020 Contracts at 31 Open ForwardCurrency March 2020 Contracts Settlement 1-6 months Total Securities Property Private Equity Pooled Investment Vehicles Equities - Quoted Equities - Unquoted Total Securities andDerivatives Forward Foreign Exchange Cash & cash equivalents Other InvestmentBalances: Other investment assets Other investment liabilities Net Investment Assets EUR JPY USD GBP GBP GBP Currency Currency Bought 1 April2019 Value £’000 Local Value 2,918,245 2,918,978 3,024,095 2,104,713 281,480 451,382 103,022 947,427 163,770 (1,686)

80,275 10,921 86,900 19,868 28,150 3,781 000s 395 733 payments Derivative Purch’s & £’000 GBP GBP GBP JPY USD EUR 1,212,924 1,212,924 1,212,924 Currency Currency 576,938 613,961 19,309 2,716 Sold - - - - - receipts Derivative Sales & £’000 (1,180,013) (1,180,013) (1,180,013) Local Value Local (443,112) (706,829) 2,661,433 (21,249) 215,085 (8,823) 69,829 32,222 9,676 7,093 000s - - - - - market value Change in £’000 Asset Value (300,824) (311,314) (312,106) (123,171) (186,727) (10,708) (10,490) 19,750 £’000 (792) 164 160 32 4 ------2020 31 March Value £’000 2,650,332 2,640,575 2,696,537 2,115,368 Liability 171,787 264,665 (9,920) (9,757) (9,458) (9,757) (2,316) 54,925 98,085

Value £’000 3,353 (409) (52) 427 (1) 0 0

Pension Fund Accounts | 84 Pension Fund Accounts | 85 Level 3: Level 2: Level 1: determine fair values, as follows: and reliability of information used to three levels, according to the quality valuations have been classified into available at the reporting date. Asset represent the highest and best price using fair value techniques which All investment assets have been valued Note 17. investment assets Fair valueof market data. is not based on observable on the valuation of the asset could have a significant effect where at least one input that market data; significantly on observable techniques are based active, but where valuation that is not considered to be an asset is traded in a market available, example, for where where market prices are not assets; in active markets for identical unadjusted form quoted prices where fair values are derived the fair value hierarchy . During the year ended 31 March 2020 there were no transfers between levels 1, 2 or 3 of and at 31 March 2019 measured at fair value according to the above fair value hierarchy. The following tables summarise the Fund's investment assets by class at 31 March 2020 31 March 220 31 March 2019 Total Other investment assets Private Equity Private Equity UK Equities - Quoted UK Equities - Quoted Pooled Investment Vehicles Derivatives Cash & Cash Equivalents Property Pooled Investment Vehicles Derivatives Cash & Cash Equivalents Property Overseas equities - Quoted Overseas equities - Quoted Total Other investment assets 545,837 221,167 160,536 421,913 Level 1 Level 1 11,251 29,469 90,674 46,027 £’000 £’000 3,781 3,353 ------1,940,201 1,882,888 1,883,747 1,927,120 Level 2 Level 2 (9,757) 12,348 £’000 £’000 8,898 733 ------539,348 594,371 231,621 177,593 281,480 264,665 Level 3 Level 3 80,275 98,085 £’000 £’000 ------3,025,386 2,698,426 2,115,368 2,104,713 160,536 103,022 281,480 264,665 421,913 (9,757) 11,251 54,925 80,275 98,085 29,469 £’000 £’000 3,781 3,353 Total Total 733 The basis of the valuation of each class of investment asset is summarised below. Description of Asset Description of investments Market quoted Level 1: pooled investments Exchange traded unit trusts etc. Pooled investments - Level 2: leasehold properties Freehold and Level 3: Unquoted equity Property funds Basis of Valuation of Basis final day of the accounting period. Published bid market price ruling on the reporting date. Published exchange prices at the price where single price only is published. prices are published, or closing single Closing bid price where bid and offer with current RICS Valuation Standards. as independent valuers and in accordance Derwent portfolio) of Allsop LLP, both acting Real Estate and Andrew Wells FRICS (the by Peter Sudell FRICS of BNP Paribas Valued at fair value at the reporting date Capital Valuation Guidelines (2012). International Private Equity and Venture companies in with accordance Comparable valuation of similar the fund structure. other financial assets and liabilities within Valuation Standards, taking account of valuers in with accordance current RICS at the reporting date by each fund's Underlying assets valued at fair value Key Inputs Not required. Not required. on pricing a basis. forward Net Asset Value (NAV) based pricing set estimated rental growth, discount rate. existing tenants, assumed vacancy levels, of tenancies, covenant strength for independent market research, nature Existing lease terms and rentals, premium. discount for lack of marketability, control Earnings (EBITDA) and revenue multiples, estimated rental growth, discount rate. existing tenants, assumed vacancy levels, of tenancies, covenant strength for independent market research, nature Existing lease terms and rentals, Key Sensitivities Not required. Not required. Not required. changes to market prices. affect valuations, as could moregeneral vacancy levels or the discount rate could Significant changes in rental growth, audited and unaudited accounts. expected cashflows, differences between the Fund's reporting date, changes to the financial statements provided and events between occurring the date of Valuations could be affected by material changes to market prices. affect valuations, as could moregeneral vacancy levels or the discount rate could Significant changes in rental growth,

Pension Fund Accounts | 86 Pension Fund Accounts | 87 is exposed to market risk its from investment activities, particularly through its equity prices, interestcommodity and foreign exchange rates and credit spreads. The Fund Market risk is the risk of loss resulting general from market fluctuations in equity and Risk (a) Market Independent Adviser on the nature of the investments made and their associated risks. The Committee receives regular reports from each investment manager and from its Responsibility for the Fund's risk management strategy rests with the Committee. meet its forecast cash flows. In addition, the Fund manages its liquidity risk to ensure there is sufficient liquidity to (price risk, interest rate risk and risk) currency and credit risk to an acceptable level. Fund achieves this through asset diversification to reduce exposure to market risk and to maximise the opportunities for gains across the whole Fund portfolio. The management is to minimise the risk of an overall reduction in the value of the Fund (i.e. promised benefits payable to members). Therefore the aim of investment risk The Fund's primary long-term risk is that its assets will fall short of its liabilities Note 18. instruments Nature extent and risksarisingfromfinancial of investments held at 31 March 2020. and has set out below the consequent potential impact on the closing values of methods described above are likely to be accurate within the following ranges, independent investment advisors, the Fund has determined that the valuation Having analysed historical data and current market trends, and consulted with valued at Level3 Sensitivity ofassets Property Pooled Investment Vehicles Total Private Equity Valuation range 15.00 15.00 15.00 (+/-) % March 2020 Value at 31 594,371 264,665 231,621 98,085 £’000 Value on Increase 683,527 304,365 112,798 266,364 £’000 Decrease Value on 505,215 224,965 196,878 83,372 £’000 investment strategies. diversification in line with their own managers mitigate this risk through in the market. The Fund's investment factors affecting all such instruments individual instrument or its issuer or are caused by factors specific to the exchange risk), whether those changes arising interest from rate risk or foreign in market prices (other than those will fluctuate as a result of changes that the value of a financial instrument Other price risk represents the risk Price Risk (a) (i)Other monitored by the Committee. asset allocation, which are agreed and limited by applying strategic targets to to specific markets and asset classes is different investment managers. Exposure exposure to different markets through and individual securities, and by gaining of geographical and industry sectors diversification of the portfolio in terms in market risk is managed through the holdings. In general, excessive volatility by 15%, excluding temporary investments and cash deposits. benefits if the market price foreach class of investment had increased or decreased The following table demonstrates the change in the net assets available to pay and 2019 are provided below,based on underlying financial assets at fair value. Fund's exposure to interest rate movements on those investments at 31 March 2020 a financial instrument will fluctuate because of changes in market interest rates. The interest rate risks, which represent the risk that the fair value of future cash flows of on investments on behalf of scheme members. These investments are subject to The Fund invests in financial assets for the primary purpose ofobtaining a return Risk Rate (a) (ii)Interest Other investment assets Cash & cash equivalents Property Pooled Investment Vehicles Overseas equities - quoted UK equities - quoted As at31 March 2020 Total Derivatives Private Equity Cash & cash equivalents Property Pooled Investment Vehicles Overseas equities - quoted UK equities - quoted As at31 March 2019 Other investment assets Derivatives Private Equity Total 3,025,386 2,698,426 2,115,368 2,104,713 264,665 160,536 103,022 281,480 421,913 (9,757) 54,925 11,251 98,085 29,469 80,275 3,781 Value £’000 Value £’000 3,353 733 Change Change 14.68 14.47 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 0.00 0.00 0.00 0.00 % % Increase Increase 396,022 437,787 317,305 315,707 (1,464) 39,700 14,713 24,080 42,222 12,041 63,287 £’000 £’000 1,688 4,420 110 - - - - (396,022) (437,787) (317,305) Decrease (315,707) Decrease (39,700) (14,713) (24,080) (42,222) (12,041) (63,287) (1,688) (4,420) £’000 £’000 1,464 (110) - - - - pay benefits by the amount shown below. change for the year in net assets available to would have increased or decreased the points) in interest rates at the reporting date An increase or decrease of 1% (100 basis the year ended 31 March 2019. analysis is performed on the same basis for currency rates, remain constant. The that all other variables, in particular foreign scheme members. This analysis assumes of the net assets available to pay benefits to Interest rates vary and can impact the value Total Investment (LDI) Liability Driven Total Investment (LDI) Liability Driven Multi AssetCredit(MAC) Bonds Assets held in pooled investment vehicles: Cash & cash equivalents As at31 March 2019 Multi AssetCredit(MAC) Bonds Assets held in pooled investment vehicles: Cash & cash equivalents As at31 March 2020 702,755 858,221 306,823 401,129 139,717 214,353 103,022 120,399 220,608 Market Market 54,925 Value Value £'000 £'000 7,028 8,582 3,068 4,011 1,397 2,144 1,030 1,204 2,206 £'000 £'000 Change in net Change in net +1% +1% 549 (7,028) (8,582) (3,068) (4,011) (1,397) (2,144) (1,030) (2,206) assets assets (1,204 £'000 £'000 (549) -1% -1%

Pension Fund Accounts | 88 Pension Fund Accounts | 89 its investments net of these hedges. exchange currency rate movements on summarises the Fund's exposure to to be +/- 10% in total. The following associated with foreign exhange rates the Fund considers the likely volatility Following analysis of historical data, Smart Beta fund are in hedged units. Yen, and 50% of its holdings in the LGIM the US Dollar, the and Euro the Japanese hedge against the three major currencies, has in place a 50% passive currency overseas equities investments, the Fund in foreign exchange rates against its To mitigate the effect of movements that are not denominated in UK sterling. cash balances and investment assets Fund is exposed risk to currency on any changes in foreign exchange rates. The instrument will fluctuate because of that future cash flows ofa financial Currency risk represents the risk (a) (iii)CurrencyRisk assessment of credit in their pricing and of investments generally reflect an a financial loss. The market values and cause the Pension Fund to incur will fail to discharge an obligation counterparty to the financial instrument Credit risk represents the risk that the (b) CreditRisk 2020 31 March As at Total Equity Private Vehicles Investment Pooled quoted equities - Overseas 2019 31 March As at quoted equities - Overseas Total Equity Private Vehicles Investment Pooled

1,284,088 1,242,286 Exposure Exposure 781,900 421,913 160,536 983,665 80,275 98,085 £’000 £’000 Total Total Unhedged Unhedged Exposure Exposure 932,606 900,899 641,375 210,957 722,546 80,275 98,085 80,268 £’000 £’000 Movement Movement Potential Potential 93,261 90,090 64,137 21,096 72,255 8,028 9,809 8,027 £'000 £'000 rating agencies. have a AAA rating the from leading credit in Money Market Funds, all of which diversification, the Fund is able to invest institution. In addition, to enable deposits placed with any one individual limits as to the maximum percentage of Fund's credit criteria. The Fund also sets are rated independently and meet the and financial institutions unless they Deposits are not made with banks receipt that remains outstanding. is represented by the net payment or vehicles. The contractual credit risk and bonds held in pooled investment comprises of investments temporary credit risk to individual counterparties Fund's exposure to concentrations of transactions in a timely manner. The though the may occur failure to settle institutions minimises credit risk that counterparties, brokers and financial The selection of high quality Fund's financial assets and liabilities. in provided for the carrying value of the consequently the risk of loss is implicitly the financial assets. 31 March 2020 is the carrying amountof The Fund's exposure to credit risk at 82% of total net assets at that date). (£2,486m at 31 March 2019 representing representing 80% of total net assets March 2020, liquid assets were £2,173M normal market conditions. As at 31 within three months notice, subject to as assets that can be converted to cash cash holdings and defines liquid assets The Fund has immediate access to its available to meet liabilities as they fall due. steps to ensure that there is adequate cash cashflow model and taking appropriate are mitigated by maintaining a detailed obligations as they fall due. Such risks Fund will not be able to meet its financial Liquidity risk represents the risk that the (c) Liquidity Risk Investment Total Investment (LDI) Liability Driven Multi Asset Credit (MAC) Bonds Assets held in pooled investment vehicles: Money Market Funds Bank Deposits Account 31 March 702,755 306,823 120,399 220,608 19,700 35,225 £'000 2020 31 March 858,221 401,129 139,717 214,353 58,450 44,572 £'000 2019

ending 31 March 2020 are as follows. 2016 valuation for the three year period contribution rates common set at the calculated as at 31 March 2016. The 31 March 2020 were set at the valuation Contribution rates for the year ending 2020 to 31 March 2023. contribution rates for the period 1 April at 31 March 2019, setting employer recent such valuation took place as forthcoming triennial period. The most employer contribution rates for the three years for the purpose ofsetting undertakes a funding valuation every the Fund's actuary, Barnett Waddingham, with In the accordance LGPS Regulations, Note 19. Funding arrangements active members of the Fund during the active members of the Fund during the of the benefits earned by each employer's up each year within the Fund in respect sufficient to meet the liabilities that build members of the scheme, are set to be employer, in addition to those paid by The contribution rates paid by each contributions Deficit recovery contributions Future service contributions Total employer 2017-18 20.00% 15.60% 4.40% 2018-19 20.70% 15.60% 5.10% 2019-20 21.40% 15.60% 5.80% market levels at the valuation date. increases to benefits as determined by for expected future investment returns and assets, the liabilities were valued allowing To be consistent with the market value of 2016 valuations are summarised below. applied by the actuary for the 2019 and 2016 valuation). The key assumptions of no more than 19 years (22 years at the valuation) with a deficit recovery period assessed as 92% funded (83% at the 2016 At the 2019 valuation, the Fund was conditions at the valuation date. unit method taking account of market rates were calculated using the projected position within the Fund. The contribution own particular circumstances and funding individual rate of contributions to reflect its valuation date. Each employer pays an liabilities that have already accrued at the of the Fund's assets compared with the participating employer's share of the value year plus an amount to reflect each (CPI) Annual rate of inflation in pay (long term) Annual rate of increases investments Annual rate of return on Valuation 2.60% 3.60% 5.00% 2019 Valuation 2.40% 3.90% 5.40% 2016

Pension Fund Accounts | 90 Pension Fund Accounts | 91 contributions due on AVC plans. Dorset and paying to the AVC providerthose for collecting their from own employees Each employer in the Fund is responsible and are not included in, the Fund accounts. pension scheme do not form any part of, employees who are members of the amounts contributed to AVC plans by Limited (formerly Equitable Life). The Prudential and Utmost Life and Pensions Scheme with two designated providers, The Council administers an in-house AVC (AVC) Contributions Voluntary Note 21. Additional 2019-20. Disclosures to these financial statements out in Appendix D Pension Fund - IAS 26 This valuation as at 31 March 2020 is set about the assumptions to be applied. to provide the Fund with expert advice firm ofconsulting actuaries is engaged rates and returns on Fund assets. A changes in retirement ages, mortality discount rate used, salary increases, complex judgements relating to the pensions depends on a number of Estimation of the net liability to pay promised retirement benefits Note 20. Actuarial present value of of the Fund as employee contributors. of the Fund as employee contributors. Senior officers of the Council are members the Fund and are settled on a regular basis. elements relating to both the Council and necessity or where single transactions have the two. These can arise due to operational Fund where indebtedness arises between paid or received by both the Council or the there may be amounts which have been in 2019-20. In addition at any given time by the Council and recharged to the Fund administration costsof £1.7M were incurred as at 31 March 2020. Management and contributions of £2.4M were accrued to the Fund in arrears, and March 2020 The Council remits monthly contributions administering authority for the Fund. do not relate to the Council's role as of the Fund, however, these activities number of scheduled and admitted bodies contractual and financial dealings with a Council also has various operational, administering authority for the Fund. The from the fact that the Council is the Related party issues arise primarily Note 22. Related partytransactions (£352k in 2018-19). providers a total of £418k in 2019-20 employer, deducted and paid to the AVC Council, in its capacity as a scheme recovery of tax. 31 March 2020 do not reflect any potential consequently the financial statements as at expected time of settlement are known so the domicile. Neither the amount nor the a varying number of years depending on claims will be retrospective and will cover equal treatment for all EU investors. These EU investments following rulings requiring to recover withholding tax from various The Fundiscontinuingtheprocessrequired Recovery ofwithholdingtax commitments contractual and Note 23. Contingent assets,liabilities the Fund. Financial Officer's time spent working for a charge of £19,000 for the Deputy Chief £1.7M recharge from the Council includes and the Deputy Chief Financial Officer. The Officer (who is the Fund Administrator) Committee, the Council's Chief Financial of the Fund are the members of the Fund. The key management personnel Committee was a deferred member of the of the Fund and one member of the Committee was a contributing member As at 31 March 2020, one member of the at the national picture, the impact on any at the national picture, the impact on any number of assumptions. Whilst this looks active member liabilities, depending on a be between 0.1% and 3.2% of total LGPS (GAD) estimated the potential impact to The Government Actuary's Department’s for the LGPS. eventual remedy that may be put in place remains considerable uncertainty about the was denied on 27 June 2019. There to the Supreme Court but that permission sought permission to appeal this decision including the LGPS. The Government to apply to all public sector schemes The implications of the ruling are expected resulted in unlawful age discrimination. ("McCloud") and the judiciary ("Sargeant") the pension schemes for firefighters found that transitional protections in In December 2018, the Court of Appeal transitional protection to those members. existing final salary scheme to provide an ‘underpin’ was provided based on the Normal Retirement Age on 1 April 2012, members who were 10 years or less from structure with effect from 1 April 2014. For Revalued Earnings (CARE) benefit (LGPS) introduced a new Career Average The Local Government Pension Scheme judgements McCloud and Impact ofthe Sargeant 0.8% of total liabilities for each employer. by GAD. These results range from 0.4% to in the Fund based on the assumptions used impact on liabilities for the main employers actuary have calculated the estimated could be significantly different. The Fund’s given fund and its scheme employers

Pension Fund Accounts | 92 Asset Pools other LGPS administering authorities other LGPS administering authorities agenda, the Dorset Fund joined with nine As a result of the investment pooling remains with individual pension funds. allocations and the investment strategy responsibility for determining asset although it should be stressed that the the previous approach to investing, pools which have significantly changed This has led to the creation of eight asset • • • • objective was to deliver: asset pooling arrangements. The government expected funds to establish and Guidance which set out howthe issued LGPS: Investment Reform Criteria and Local Government(as it then was) In 2015 the Department of Communities Background Pools Asset to invest in infrastructure. An capacity and improved capability money, and Reduced costs and excellent value for making. Strong governance and decision Benefits of scale. • • • In summary: form the Brunel Pension Partnership. Oxfordshire, Somerset and Wiltshire) to Environmental Agency, Gloucestershire, (Avon, Buckinghamshire, Cornwall, Devon, Table 1:Expected Costs and Savings from Pooling Case) (as perBusiness Set up costs Savings Dorset Fund Costs Ongoing Brunel Fee savings Transition costs (savings) / Net costs pools in England and Wales. Government Pension Scheme (LGPS) Brunel is one of eight national Local client funds. Brunel’s shareholders are Brunel’s ten percent share in the business. Brunel has ten shareholders, each with a 2016- £'000 2017 117 117 - - - - 2017- 1,066 £'000 1,066 2018 - - - - 2018- 1,586 £'000 1,283 (125) 2019 (59) 487 - (1,499) 2019- £'000 1,896 (129) 2020 905 637 - (1,915) (2,562) 2020- £'000 (133) 2021 657 123 - (2,444) (2,986) 2021- £'000 (137) 2022 679 the following table. submitted to are Government, set out in approved in January 2017, and then Dorset, as per the original business case The expected costs and savings for the expected to break even by 2021-22. see initial costs, but in Dorset’s case was share was £74 million. The project would across the ten funds, of which Dorset’s of £550 million over a 20 year period based on estimated potential fee savings business case for Brunel in January 2017, Dorset County Council approved the - - (2,893) (3,453) 2022- £'000 (141) 2023 701 - - (3,374) (3,953) 2023- £'000 (145) 2024 724 - - (3,634) (4,232) 2024- £'000 (149) 2025 747 - - (3,909) (4,527) 2025- £'000 (154) 2026 772 - - (59,359) (66,788) (1,818) 2026- £'000 9,247 2036 - - (73,855) (90,058) (2,931) 14,650 £'000 1,183 3,301 Total

Asset Pools | 94 Asset Pools | 95 out in the following table. transition costs incurred to date are set by the client funds. The set up and the oversight and monitoring of Brunel investment management expenses and the pool company including set up costs, the appointment and management of reporting of the costs associated with of investment pooling. This includes is delivering on the key objectives be monitored to ensure that Brunel financial performance of the pool will Now that Brunel is operational, the objective of each portfolio. funds needed to meet the investment selects the external managers or pooled portfolios. In particular, it researches and defined focused investment outcome funds by investing Funds’ assets within Asset Allocations of the participating implementing the detailed Strategic Authority (FCA). It is responsible for is authorised by the Financial Conduct participate in the pool. The company Authorities (in equal shares) that wholly owned by the Administering established in July 2017, as a company the Brunel Pension Partnership Ltd was Following approval ofthe business case, Table 2: Investment Pool Up Table 2:Investment Costs Set shows the additional savings or costs changes from in asset values. changes in fees if asset values had remained unchanged, and the quantity variance was prepared in 2016. The price variance shows the savings or costs arising from Brunel portfolios against the fees charged at the time the business case for pooling This analysis shows the fee savings achieved for the assets that have transitioned to Savings from Pooling Fee Table 3:Investment to passive equities. The savings achieved to date are set out in the following table. The Dorset Fund transitioned its first assets to Brunel in July 2018, comprising the allocation Total Private Markets High Alpha Global Equities Emerging Market Equities Smart Beta Passive Equities Global Passive Equities UK Active Equities UK Passive Equities Recruitment Set Up Costs Legal Consulting, Advisory & Procurement Other support costs e.g. IT, accommodation Share purchase / subscription costs Taxation Transition fees Transition Costs Total Set Up Costs Other transition costs Total TransitionCosts 31-Mar-16 Value OBC 876,462 227,083 218,539 365,654 65,186 £'000 0 0 31-Mar-20 1,041,285 112,161 241,858 168,227 130,585 304,676 83,777 Value £'000 Direct £'000 2019-20 ------Variance 1,410 £'000 1,099 Price Indirect 130 179 -33 £'000 31 -5 9 964 160 737 67 ------Variance Quantity £'000 -303 £'000 Total 465 301 154 423 -93 -17 964 160 737 67 0 ------Total Saving Cumulative / (Cost) to date 1,072 2,081 £'000 1,581 1,875 £'000 1,522 133 840 -173 433 296 333 18 82 -61 -33 67 0 -9 Table 4:Expected vs ActualCostsand Savings to Date is provided in the following table. of the A summary costs and savings to date to compared the original business case Ongoing Brunel Costs Set up costs Clients Savings Transition costs Fee savings Net costs / Net (savings) costs In Year 1,586 £'000 1,283 (125) (59) 487 Budget 0 To date 2,769 £'000 1,183 1,283 (125) (59) 487 2018-19 In Year 1,442 £'000 1,118 (125) (358) 807 Actual 0 To date 2,514 £'000 1,072 1,118 (125) (358) 807

In Year (1,499) £'000 1,896 (129) 905 637 Budget 0 To date (1,558) 3,673 £'000 1,183 1,124 3,179 (254) 2019-20 In Year (1,052) £'000 1,006 (129) 789 964 Actual 0 To date (1,410) 3,303 £'000 1,072 1,813 2,082 (254)

Asset Pools | 96 Other Material knowledge and skills. knowledge and maintain an appropriate level of expertise, bodies to enable them to acquire and pensions decision-making and governance training for staff and members of the and experienced and it will provide/arrange to utilise individuals who are both capable The Dorset County Pension Fund seeks allocated to them. discharge the duties and responsibilities equipped with the knowledge and skills to regard to the pension scheme are fully governance and decision-making with with the financial administration, and that all staff and members charged pensions administration responsibilities the necessary resources to discharge its the importance of ensuring that it has Dorset County Pension Fund recognises responsibilities effectively. necessary for performing their duties and achieve the level of knowledge and skill members or officers) to ensure they of public sector pension funds (whether involved in the management and oversight There is a requirement for all those Knowledge and Skills Other Material Training Finance Knowledge and Skills Framework CIPFA has published its Pensions role effectively. knowledge they out this require tocarry governance have access to the skills and that those charged with pension scheme oversight role. They should also ensure those with a policy, management and/or scheme financial management and of both those involved in pension assessed the professional competence secure appropriate training, having Every public sector organisation should requirements. the implications of legal and regulatory and performance risk management and auditing; actuarial practices; investment pensions procurement; accounting and markets and products; financial services skills, including knowledge of financial management demands appropriate sector pension scheme financial schemes’ growing complexity. Public pension schemes will be aware ofthe with the financial management of All public sector organisations charged knowledge and skills to discharge the scheme are fully equipped with the making with regard to the pension financial management and decision Fund Committee charged with the officers and members of the Pension the importance of ensuring that all Dorset Council has always recognised Local Government Pension Scheme, As an administering authority of the • • • • • • the Knowledge and Skillsare: framework scheme finances. The six areas within development of those involved in pension as a basis for the training and practices. Actuarial methods, standards and knowledge; Financial markets and product management; Investment and performance risk relationship management; Financial services and procurement standards; Pensions accounting and auditing context; Pensions legislative and governance

Other Material | 98 Other Material | 99 convened if considered necessary. fund managers. Special meetings are by the Funds existing advisers and industry recognised professionals and at seminars and conferences held by education is to reflect current issues The aim of the additional training and • • • • range of topics including: Pension Partnership presented with a At each Pension Fund Committee Brunel attendance at conferences and seminars. managers in addition to individual at various meetings with investment During 2019-20 knowledge was gained Training Member Officer and level of expertise, knowledge and skills. to acquire and maintain an appropriate Pension Fund Committee to enable them training for officersand members ofthe them. The Fund provides and arranges duties and responsibilities allocated to their Climate Change Policy. Responsible Investment including Update on portfolio development; Update on Governance arrangements; Reasons pooling; for Glossary of Terms discretion. allowed into the Fund at the Council’s These are employers who have been Admitted Bodies Scheme’s AVC provider. by paying extra contributions to the decides to supplement their pension AVCs are paid by a contributor who Additional VoluntaryContributions(AVCs) employing bodies must contribute. and prescribes the rates at which the the Fund’s assets with the liabilities as the actuarial report, which compares The produces a Actuary report, known position of the Fund every three years. the Fund and reviews the financial An independent consultant who advises Actuary contribution rates. of each participating employer and agree Fund will Actuary assess the funding level to meet its liabilities. For the LGPS the the Actuary into the liability of the Fund valuation of the Fund. It is undertaken by An Actuarial Valuation is a three yearly Actuarial Valuation for setting investment strategy; BPP Ltd, a for setting investment strategy; BPP Ltd, a The individual funds will retain responsibility management of their investment assets. A partnership of ten LGPS funds to pool the Brunel Pension Partnership (BPP Ltd) (gilts). bonds corporate or government bonds later date. The term refers generically to undertakes to repaythe loan at an agreed government ora which company) Loans made to an issuer (often a Bonds benchmark. the from performance fund than the requires an agreed percentage better trustees. Usually a target is set which which reflects the requirements of the series of appropriate indices is chosen management is performance judged. A A measure against which pension fund Benchmark bank balances and debtors. fund holds. They include investments, These are everything that the pension Assets (or asset classes). between different types of investments The apportionment of the Fund’s assets Asset Allocation to client instruction. income and distribute monies according a register of holdings and will collect financial institution. The Custodian keeps The safekeeping of securities by a Custody/Custodian can influence management. its shareholders and how shareholders maximum importanceto the interest of company ensures that it is attaching Issues relating to the way in which a Corporate Governance way the index is constructed. goods and services included, and the It differs the from RPI in the range of Measure of priceinflation in the UK. Consumer Price Index (CPI) specified of trades or other transactions. as a guarantee against the value of a one to counterparty another, and held An asset (cash or securities) posted from Collateral Somerset and Wiltshire. Agency, Gloucestershire, Oxfordshire, Cornwall, Devon, Dorset, Environment partnership are: Avon, Buckinghamshire, on behalf of the funds. The funds in the authorities will implement the strategies company owned by the ten administering

Other Material | 100 Other Material | 101 managing the pension fund. The person who is responsible for Fund Administrator vote at shareholders’ meetings. profits of the company and are entitled to Shareholders have an interest in the companies traded on a stock exchange. Ordinary shares in UK and overseas Equities established markets. tend to more volatile than those in more Investment returns within these markets as areas of Europeand the Far East. Asia Africa, and the Middle East as well Developing economies in Latin America, Emerging Markets will be worth on retirement. that has been applied and how muchthey have and accrued, any pension increase Statement which shows the benefits you will member you receive an Annual Benefit not yet receiving a pension. As a deferred stopped paying into the scheme but is A deferredmemberis one that has Deferred Pensioners to risk and timescale. Pension Fund Committee and the attitude taking into consideration the aim of the assets amongst various asset classes, The Fund’s long-term distribution of Investment Strategy sewer and water systems. including highways, bridges, schools and to support residential development, The public facilities and services needed Infrastructure position in a related investment. loss, normally by taking an offsetting A means of protecting against financial Hedge currently requires to meet its liabilities. of 110% it owns 10% more assets than it percentage. If a fund has a funding level liabilities. This is expressed as a estimated value of its past service The ratio of a fund’s assets to the Funding Level fund of funds manager. experience and research capability of the diversification and take advantage of the funds of funds can increase their level of in other investment funds. Investors in Funds whose principle activity is investing Funds Fund of institutional investment decision making. 2001, investigated the challenges facing government. The review published in March on behalf of the Chancellor of the UK Review carried out by Paul Myners Myner’s review the scheme. providing entitlement to benefits under made or redeemed to have been made which time pension contributions were Local authority employment during Membership open market. reasonably be expected to be sold in an The price at which an asset might Market Value paid when someone retires. benefits and payments that are due to be Pension liabilities are the pension to be paid. creditors outstandingfor payments due Financial liabilities are debts owed to Liabilities workers in local government. in place via Government Regulations, for a public sector pension arrangement put The Local GovernmentPension Scheme, LGPS Passive Management Transfer Payment A style of investment management that A payment made from one pension seeks to attain performance equal to scheme to another in lieu of benefits market or index returns. which have accrued to the member or members concerned, to enable the Performance Measurement receiving pension scheme to provide Calculation of a Fund’s historic return on alternative benefits. its investments. Other Material | 102

Private Equity Private equity is capital that is not noted on a public exchange. Private equity is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity.

Scheduled Body A scheduled body is a statutorily defined body within the scheme’s regulations and has a statutory obligation to participate in the Scheme.

Stock Lending Stock lending is the act of loaning a stock, derivative or other security to an investor or firm. Securities lending requires the borrower to put up collateral, whether cash, security or a letter of credit. When a security is loaned, the title and the ownership are also transferred to the borrower and voting rights are lost. Appendices 2. 1.2 1.1 1. Compliance Statement Governance Policy and Appendix 1 Appendices 2.1

interested persons. in consultation with appropriate by the administering authority and as such has been prepared governance position for the Fund The statement reflects the current force on 14 December 2005. Regulations 2005 which came into the LGPS (Amendment) (No. 2) a Statement by 1 April 2006, under and Wales are required to publish Scheme (LGPS) Funds in England All Local Government Pension Background written statement setting out; to prepare, maintain and publish a persons as they consider appropriate, authority, after consultation with such statements require an administering The regulations on governance policy Statement Policy Requirement for the Governance 2.2 • • • • (non-scheme employers). admitted body employers arrangements for representing of employers should any cover Information aboutthe representation fund governance arrangements. administering authority’s pension include information about all of the Thus, the policy statement should voting rights. representatives, whether they have and, if there are such - - committee includesrepresentativesof: whether the committee/sub delegation; and operational of the procedures the terms of reference,structure committee meetings; the of any frequency committee/sub- (b) (a) 

scheme members non-scheme employers) employing authorities (including and, if so, it must state: or officer of the authority; fund to a committee, sub-committee in relation to maintaining a pension whether it delegates its functions

2.5 2.4 2.3

 out above. in policy on any of the matters set authority following a material change and published by the administering The statement must be revised format recommended in, the guidance. compliance as required by, and in the this statement describes the extent of in November 2008. The Schedule to Local Government (CLG) in final form Department for Communities and The guidance was issued by the complying”. not socomply,the reasons for not of State and, to the extent that it does with guidance given by the Secretary the absence of a delegation, complies “the extent to which a delegation, or administering authorities to state the additional requirement for (Administration) Regulations with Government Pension Scheme 2008 by Regulation 31 of the Local The requirement was updated in

Appendix 1- Governance Policy and Compliance Statement | 104 Appendix 1- Governance Policy and Compliance Statement | 105 3.1 3. 2.6 regulations set by the CLG. Committees and any relevant policy decisions made by the Administrator working within the the Fund is delegated to the Fund The day to day administration of to the Pension Fund Committee. management of the Pension scheme has delegated all aspects of the below. Underthis system the Council governance structurethat is set out function and this is reflected in the pension fund is a non-executive government, management of the Under the cabinet structure in local Pension Fund the Governance of Dorset County imposed by the Pensions Regulator. the Scheme, and any requirements to governance and administration of with regulations, legislation relating Committee) in securing compliance Dorset’s case, The Pension Fund to assist the scheme manager (in require the creation of a Local Board Board for LGPS funds. The regulations regulations 2015 specify the role of the Pension Scheme Governance The subsequent Local Government scheme establish a Pension Board. Act required that each public sector In 2013 the Public Service Pensions • • • • 3.3 • 3.2 Pension Fund Committee

Fund service; across theperformance Pension Reviewing all aspects of providers; and other professional service of all performance Fund Managers Appointing and reviewing the Communications Strategy; Statement, Business Plan and Governance Policy and Compliance (ISS), Funding Strategy Statement, Investment Strategy Statement policy documents including the regularly reviewing the Fund’s key Overseeing the preparation of and so taking proper professional advice; allocation of the Fund, and in doing strategy and strategic asset Determining the overall investment Committee has responsibility for: In broader terms this means that the relating thereto. Regulations and deal with all matters Government Superannuation Act and as administering authority under Local To exercise all functions of the Council the Council are: Pension Fund Committee as set by The formal terms of reference of the 3.4 • • • • is present. unless of three a members quorum Committee will not be transacted the larger audience. Business of the available, or be inappropriate for for consideration than that normally require urgent discussion, more time business which for example might occasionally held to deal with other to be present. Other meetings are generally requires all main managers quarterly and at alternate meetings The Committee meets at least Pension Fund. Pension Board ofthe Dorset County Making appointments to the best interests of the Fund; responsibilities are discharged in the Ensuring that at all times that these of the Administering Authority; discretions that are the responsibility Deciding upon key pension policy and join the Fund; of qualifying organisations wishing to Deciding upon requests for admission

4.2 • • • • 4.1 4. Representation 3.5 Fiduciary duty

One Scheme Member representative. One District Council representative; Borough ofPoole; Council and one nominated by the appointed by Bournemouth Borough Two Unitary Authority members – one Council’s Cabinet); more than two being members ofthe appointed by the County Council (not Five County Council members – i Committee member is: The nomination process for each out below: Pension Fund Committee is as set The current membership of the represented on the committees. individuals, individual groups or sectors always be put before the interests of and scheme beneficiaries must fiduciary duty to employers, taxpayers, decisions, members are aware that the committee and in reaching their In considering matters before each

balance of the Council. No more balance of the Council. No more parties, maintaining the political are nominated by their political The five County Council members 4.3 4.4   iv iii ii Committee. bodies to be represented on the decided to invite other interested management of the scheme. It was for the effective and prudent County Council) which is answerable the administering authority (Dorset the LGPS in Dorset remains with Formal statutory responsibility for union representative was added to in September 2005 when the These arrangements were reviewed size with representation achieved. to be the optimal mix of committee plus pensioners) and is considered 78% of the membership (contributors gives direct representation to about The representation set out above union. the Unions, with Unison as lead representative is nominated by The Scheme Member Executives group; by the Dorset Leaders and Chief District Councils is nominated The member representing the Council; and Poole are nominated by their The Bournemouth members from Council’s Cabinet; than one will be a member of the 4.5 out above. support the formal governance set accountability to the This fore. helps issues transparent and has brought helped to keep fund management information and ideas which has held to facilitate an exchange of of employers,annual meetings are stakeholders. in However, the case in more detail engagement with all Communication Strategy explains provided if requested. The Fund’s informed ofthis. A hard copy is and all employers have been available on the Council’s website Committee papers are publicly still applies. basis and currently, the above Officers review this on a regular specialist role of the Committee. considered unworkable given the of the Committee and this was without at least doubling the size representation could not be achieved meaningful increase in proportional on balance it was decided that a reviewed in September 2009, and The arrangements were also representatives was considered. representation by having more the practicalities of increasing the Committee. Also at this time

Appendix 1- Governance Policy and Compliance Statement | 106 Appendix 1- Governance Policy and Compliance Statement | 107 5.1 5. 4.6

Local Pension Board Local a) responsible for assisting it: require that the Local Board will be Local Pension Board. The regulations Fund was required to establish a As referred to in paragraph 2.6 the is described below. is described below. refer to Local Pension Boards, and this level since 2013. The regulations also Board has been operating at a national Responsible Authority. The Shadow Advisory Board which assists the Regulations also refer to the Scheme to as the Responsible Authority. The regulations for the LGPS is referred being the body that makes the Communities and Local Government Scheme Manager. The Department for Committee is now referred to as the regulations the Pension Fund Act 2013 and the LGPS Governance Under the Public Service Pensions 2) 1) to secure compliance with-

the LGPS regulations; and and any connected scheme; administration of the Scheme to the governance and any other legislation relating 5.4 5.3 5.2

by the Fund’s three largest representatives are to be nominated members. The three Employers and three representing scheme members representing Employers The Board consists of three at their meeting on 12 February 2015. agreement of its terms of reference with the County Council’s formal established a Local Pension Board, The Dorset County Pension Fund total should be no less than four. member representatives, and that in have equal numbers of employer and that the Board’s membership should this date. The regulations also specify first meeting within four months of 2015, and that the board holds its is established by no later than 1 April The regulations require that the Board b) scheme. the Scheme and any connected governance and administration of to ensure the effective and efficient 3) connected scheme; and relation to the Scheme and any by the Pensions Regulator in any requirements imposed 5.5

on 24 June 2015. The first meeting of the Board will be scheme positions.member guaranteed at least one of the three nominate members. The unions are Unison, as the largest union to representatives, and also asked to nominate themselves as Fund invited all scheme members and the Borough ofPoole. The Bournemouth BoroughCouncil, employers; Dorset County Council, (c) (b) (d) (d) (a) Principle A –Structure issued byCLG with guidance Schedule compliance of

  committee. to underpin the work ofthe main secondary committee established are members of either the main or pensioner and deferred members) and scheme members (including LGPS employers, admitted bodies That representatives of participating appointing Council. main committee established by the of fund assets clearly rest with the of benefits and strategic management The management of the administration communication acrossboth levels. the structure ensures effective or panel has been established, That where a secondary committee secondary committee or panel. is allocated for a member from the least one seat on the main committee or panel has been established, at That where a secondary committee (a) (c) (b) (d) (b) on ratings givenabove: Comments (c) and (d) We have only one Committee and therefore these are not applicable. Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): representing scheme members. The appointed trade union representative has been given the formal role of Not Compliant

 Fully Compliant  Not applicable  

Appendix 1- Governance Policy and Compliance Statement | 108 Appendix 1- Governance Policy and Compliance Statement | 109 (a) Principle B –Representation (b)  i) These include: secondary committee structure. represented within the main or afforded the opportunity to be That all key stakeholders are rights. process, with or without voting to contribute to the decision-making training and are given full opportunity of access to papers and meetings, they are treated equally in terms a main or secondarycommittee, That where lay members sit on iv)  professional independent iii) ii)

basis). expert advisers (on and ad-hoc observers; and members); deferred and pensioner scheme scheme members (including admitted bodies); non-scheme employers, eg employing authorities (including (b) (a) professional Allenbridge observer from EPIC Investment Advisers. The Fund has appointed an independent investment adviser and an independent representing scheme members. The appointed trade union representative has been given the formal role of on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): Not Compliant

Fully Compliant   Not applicable (b) (a) members Principle C -Selectionand role oflay (a) Principle D –Voting

LGPS committees. body or group represented on main not extending voting rights to each transparent, including justification for authorities on voting rights is clear and The policy of individual administering on the agenda. interest related to specific matters declare any financial or pecuniary committee members are invited to That at the start of any meeting, secondary committee. on to either perform a main or role and function they are required are made fully aware ofthe status, That committee orpanel members (b) (a) (a) All members of the Committee have voting rights. members. This was reviewed formally in a report to the Committee in February 2006. The County Council’s constitution contains details of voting rights of committee on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1) (c) 1997 Regulations): (b) (a) on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): advance of the meeting. matter is asked to contact the officer named at the top of the agenda in Officer to prior the meeting. Any member who has a query on a particular (a form copy is attached to the agenda) and hand it to the Democratic Services have an interest to declare are asked to complete a Declaration of Interests nature) and (b) prejudicial interests under the Code of Conduct. Members who receive declarations by members of (a) personal interests (including their The agenda for each meeting has a standing item on “Code of Conduct” to 3 of this Statement. The Committee’s responsibilities are formally documentedas set out in Section Not Compliant Not Compliant

Fully Compliant Fully Compliant    Not applicable Not applicable

Appendix 1- Governance Policy and Compliance Statement | 110 Appendix 1- Governance Policy and Compliance Statement | 111 b) (a) Expenses Principle E - Training/Facility time/ (c)

decision-making process. in respect of members involved in the time and reimbursement of expenses there is a clear policy on training, facility taken by the administering authority, statutory and related decisions are That in relation to the way in which undertaken. and maintains a log of all such training training plans for committee members considers the adoption of annual the administering authority That of secondary forum. panels or any other form committees, sub-committees, advisory applies equally to all members of That where such a policy exists, it

(b) (a) (c) committees on a regular basis. Training, both internally and externally, is made available to members ofthe on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): Not Compliant

Fully Compliant    Not applicable (c) (b) (a) Principle F-Meetings(frequency/quorum) (a) Principle G – Access

 key stakeholders can be represented. arrangements by which the interests of provide a forum outside of those formal governance arrangements, do not include lay members in their That administering authorities who committee sits. with the dates when the main least twice a year and is synchronised secondary committee or panel meet at That an administering authority’s least quarterly. committee or committees meet at That an administering authority’s main meetings of the main committee. advice that fails to be considered at committee papers, documents and or panels have equal access to of main and secondary committees Council’s constitution, all members That subject to any rules in the (b) (a) (a) (c) Committee papers are publicly available on the website. on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1) (c) 1997 Regulations): (c) (c) on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): regulations and all other relevant legislations. review and ensure the Dorset Pension Fund secures compliance with the Scheme (3 employer and 3 member representatives). The purpose ofthis Board is to has established a Local Pension Board. This will consist of 6 voting members From 1 April 2015, Dorset County Council in its role of Administering Authority and from question those running the scheme. The Fund holds annual employers meetings, enabling employer bodies to hear Not Compliant Not Compliant

Fully Compliant Fully Compliant    Not applicable Not applicable 

Appendix 1- Governance Policy and Compliance Statement | 112 Appendix 1- Governance Policy and Compliance Statement | 113 (a) Principle H – Scope (a) Principle I –Publicity



arrangements. in wanting to be part of those governed, can express an interest the way in which the scheme is stakeholders with an interest in arrangements in such a way that published details of their governance That administering authorities have governance arrangements. issues within the scope of their taken steps to bring wider scheme That administering authorities have (a) (a) Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): stakeholders of the scheme. This document is published in the Annual Report and made available to all on ratings givenabove: Comments Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): matters relating thereto. under Local Government Superannuation Act and Regulations and deal with all the wider role of exercising all functions of the Council as administering authority The change to the Committee structure in 2012 gives the Pension Fund Committee on ratings givenabove: Comments Not Compliant Not Compliant

Fully Compliant Fully Compliant   Not applicable Not applicable (ISS) March2018 Statement Strategy Investment Appendix 2 includes responsibility for determining the includes responsibility for determining the Fund Committee (“the Committee”). This Fund”) have been delegated to the Pension for the Dorset County Pension Fund (“the Council”) as the administering authority All functions of Dorset County Council (“the 2. Committee 13 September 2017. review agreed by the Pension Fund the results of the strategic allocation 2017, and has been amended to reflect Statement (ISS) first published March version of the Investment Strategy This statement replaces the previous significant change occur. three years, or more frequently should any by the administering authority at least every of State. This statement must be reviewed issued from time to time by the Secretary strategy, in accordance with guidance to publish a statement of its investment authorities of LGPS funds to formulate and Regulations 2016 require administering (Management and Investment of Funds) The Local Government Pension Scheme 1.

for ensuring suitability of investments for ensuring suitabilityofinvestments Investment strategy andthe process Introduction tolerances by which the actual allocation tolerances by which the actual allocation set out in the table below, together with current target strategic asset allocation is officers and the Committee. The Fund’s diversification and be fully understood by Fund’s risk and return objectives, improve asset classes must be consistent with the risk. To be judged suitable for investment, diversify sources of investment return and different asset classes in order to prudently The Fund allocates across a variety of quarterly meetings. also consider asset allocation at each of its independent adviser. The Committee will Epic Investment Advisers, the Fund’s expertise, and Alan Saunders, Allenbridge with considerable LGPS experience and by Mercer, an investment consultancy firm, last reviewed in this way in 2017, advised The Fund’s strategic asset allocation was the triennial actuarial valuation are known. every three years shortly after the results of strategic asset allocation is undertaken this objective a major review of the Fund’s pension liabilities as they fall due. To meet Fund will have sufficient assets to meet all Fund is to ensure that over the long term the The primary investment objective of the taking proper professional advice. asset allocation of the Fund, and in doing so overall investment strategy and strategic Committee: can vary without further agreement by the month’s notice. and contracts can be terminated at one with accordance the mandates agreed) instructions given to them by the Fund (in quarterly basis, they must comply with all to report on portfolio management on a diversification. All managers are required asset classes, adds a further level of approaches, in a number of the manager, with differing investment The appointment than of more one Total Assets Investment (LDI) Liability Driven Assets Total Return Seeking Infrastructure Private Equity Funds (DGF) Diversified Growth Property (MAC) Multi Asset Credit Bonds Equities Emerging Markets Global Equities UK Equities Asset Class Allocation Allocation 100.0% 86.0% 14.0% 12.0% 22.0% 20.0% 5.0% 5.0% 8.0% 5.0% 6.0% 3.0% Tolerance +/- 3.0% +/- 2.0% +/- 4.0% +/- 4.0% +/- 1.0% +/- 1.0% +/- 1.0% +/- 1.0% +/- 1.5% +/- 0.5% - -

Appendix 2 - Investment Strategy Statement | 114 Appendix 2 - Investment Strategy Statement | 115 management agreements were effective Wellington Management. The Investec Asset Management and managers; Allianz Global Investors, managed by three external investment Equities in developed markets are (22.0%) Developed Markets Global Equities – 3.5% per annum. outperforming the FTSE All Share Index by 2006) in a pooled vehicle with a target of basis by AXA Framlington (effective April to UK Equities is managed on an active 2.5% per annum. The remaining allocation outperform the FTSE Small Cap index by (effective April 2006), with a target to cap’ investments managed by Schroders to a pooled fund specialising in ‘small captured by an external active allocation not included in the FTSE 350 index is remaining 3% of the FTSE All Share index the in-house team. Exposure to the FTSE 350 index are fully replicated by are permitted. The constituents of the and no derivatives or financial gearing an annual deviation allowed of +/- 0.5%, target is to track the FTSE 350 index, with Department on a passive basis. The by officers in the Chief Executive’s to UK Equities is managed internally Approximately two thirds of the allocation UK Equities (20.0%) 1 December 2017, with a target to 1 December 2017, with a target to Multi Asset Fund with effect from The Fund is invested in the CQS Credit (5.0%) Credit (MAC) Multi Asset emphasis on the sector. corporate portfolio ofmainly UK Bonds with an Bond Fund, which holds a diversified allocation is invested in the RLPPC Core Non-Gilt Over 5 Year Index by 0.75%. The with a target the to outperform iBoxx appointed with July effect from 2007, London Asset Management (rlam), The Fund’s Bonds’ manager is Royal Bonds (6.0%) Index by 2% per annum. the outperform MSCI Emerging Markets a diversified strategy, and the target is to investment is in a pooled fund, which has an active mandate since April 2012. The Asset Management who have managed Markets equities through JP Morgan The Fund has exposure to Emerging (3.0%) Emerging Markets Global Equities – further degree of diversification. investment approach, thus adding a an active basis but each has a different Global Index. All three are managed on has a target the to outperform MSCI December 2015, from and each manager and high lease value (HLV) holdings. evenly portfolio more split between core to allow for a gradual transition to a the mandate with CBRE will be amended over a rolling five year period. Over time Return, the industry standard benchmark, average IPD Quarterly Universe Portfolio return on assets at least equal to the The manager’s target is to achieve a not covered by the direct investments. exposure to the shopping centre sector Shopping Centre Trust Fund, which give (Jersey) Unit Trust, and the Standard Life funds, the Lend Lease Retail Partnership 10% is invested in indirect property and across sectors. The remaining wide diversification both geographically property in commercial the UK, with a investment is in directly owned Approximately 90% of the Fund’s property adviser and manager. CBRE Global Investors is the Fund’s Property (12.0%) securities in the US and Europe. corporate loans, bonds and asset backed The fund holds a diversified portfolio of outperform LIBOR by 4.0-5.0%, net of fees. long-term holdings. long-term holdings. invested these are intended to remain as to be completely drawndown, but once some time for all of the committed capital global reach.LikePrivate Equity,itwilltake opportunities, whereas IFM have a wider in 2014. Hermes focus mainly on UK Fund Management (IFM), were appointed Investment Management and International Two Infrastructure managers, Hermes Infrastructure (5.0%) the Fund (generally 10-15 years). between 4-6% per annum over the life of public equity outperform markets by and on Europe, both managers aim to whereas Standard Life focus mainly Life. HarbourVest specialise in the US, managed by HarbourVest and Standard in Private Equity ‘fund of funds’ products Since April 2006 the Fund has invested Private Equity(5.0%) cash plus 4%, with 70% of equity risk. on asset allocation. The target return is a range of asset classes and focussing returns but with lower risk, by investing in pooled fund seeks to achieve equity like Allocation Fund since April 2012. This Management in their Dynamic Asset The Fund has invested with Baring Asset (DGF) (8.0%) Diversified GrowthFunds investment managers can, to a large benchmarks or relative risk: The risk of underperforming the different types of assets and markets. assets of the Fund across a number of it can be mitigated by positioning the Whilst this cannot be avoided entirely, value of assets through negative returns: The absolute risk of a reduction in the managed in a number ofways: Investment risk can be measured and not eliminate it. to understand, measureand manage risk, risks taken, and therefore the Fund seeks will, to a considerable degree, reflect the Achieving satisfactory investment returns 3. index linked or conventional gilts. derivative instruments in addition to which enables them to use a range of Investor Fund (QIF) set up by Insight Fund is invested in a bespoke Qualifying in a similar way to the liabilities. The putting together a portfolio that moves the Fund’s exposure to inflation risk by April 2012 with the objective to reduce Insight Investments were appointed in (LDI) (14.0%) Liability DrivenInvestment Risk measurement Risk management and The Fund’s

investment managers in relation to all considered and managed by the Fund’s governance issues are required to be social, from environmental and corporate Other financially material risks arising such a way as to enhance returns. flexibility to manage the portfolios in at the same time allowing adequate the far from intended whilst outcome, investment managers deviating from too relative to the targets set, constrains the monitoring and of performance risks asset allocation strategy and the detailed the Fund’s assets. The adoption of an suitable balance or diversification of Risks may also arise a from lack of acceptable level of risk. target or expected return within an correlation between those returns to of the various asset classes and the considers the expected risks and returns the investment strategy, the Committee risk and return characteristics: Different asset classes have different benchmark and controls. Each manager has a mandate specific relative to their benchmark or target. volatile theiris performance likely to be statistical techniques to forecast how extent, control relative risk by using In setting

Appendix 2 - Investment Strategy Statement | 116 Appendix 2 - Investment Strategy Statement | 117 will retain the responsibility for setting Ltd, the Fund, through the Committee, Following the establishment of Brunel April 2018. first assets to transition to the pool from pool to become operational and for the the Government’s requirement for the in progress with the intention of meeting Ltd (Brunel Ltd). This is currently work through the Brunel Pension Partnership LGPS funds to pool investment assets The Fund is working with nine other 4. Approach toassetpooling appointment of Insight Investments. Liability Driven Investment (LDI), and the the current asset allocation of 14.0% to process to address this risk, leading to in June 2011, the Committee began a review ofthe Fund undertaken by JLT on liabilities. Following a strategic impact of interest and inflation yields that can lead to this mismatch are the greater detail, however, the major risks Statement considers these risks in liabilities. The Fund’s Funding Strategy time, between the Fund’s assets and its on-going risks of a mismatch, over Consideration is also given to the set out in more detail in section 5 below. asset classes. The Fund’s approach is Brunel Ltd to act in its clients’ interests. as a client, including a duty of carefor of Brunel Ltd, and the rights of the Fund will set out the duties and responsibilities service. A detailed service agreement expect certain standards and quality of and as a client will have the right to The Fund will be a client of Brunel Ltd managers. professional external investment These MOFs will be operated by the detailed strategic asset allocations. needed to meet the requirements of the Manager Operated Funds (MOFs) In particular it will research and select focused investmentoutcome portfolios. investing funds’ assets within defined allocations of the participating funds by implementing the detailed strategic asset Scheme (CIV). It will be responsible for unregulated Collective Investment (FCA) to act as the operator ofan the from Financial Conduct Authority The is company seeking authorisation owned by the administering authorities. Brunel Ltd is a new company wholly Brunel Ltd. assets to the portfolios provided by for the Fund and allocating investment the detailed strategic asset allocation oversight function. oversight function. Oversight Board to fulfil its monitoring and providing practical support to enable the differences. It will be responsible for matters, confirming priorities, and resolving for discussing technical and practical pooling by Brunel Ltd, and provide a forum role in reviewing the implementation of from time to time. It will have a primary authorities’ finance and legal officers but will also draw on administering each of the administering authorities pension investment officers drawn from the Client Group, comprised primarily of The Oversight Board will be supported by authority individually. remitted back to each administering shareholder approval. These will be powers to take decisions requiring authorities, but will not have delegated matters on behalf of the administering oversight function and consider relevant It will therefore have a monitoring and required to achieve investment pooling. that Brunel Ltd delivers the services ultimate responsibility for ensuring administering authorities, it will have and terms of reference. Acting for the according to an agreed constitution of the administering authorities, set up comprised of representatives each from An Oversight Board has been established, transition plan outlined above, it Following the completion of the appropriate. in partnership with Brunel Ltd where their investment performance, working investment managers and oversee maintain the relationship with its current take place, the Fund will continue to Brunel Ltd. Until such time as transitions with a timetable that will be agreed with April 2018 and March 2020 in accordance portfolios managed by Brunel Ltd between existing investment managers to the be transitioned across from the Fund’s is anticipated that investment assets will case for the Brunel Pension Partnership. It The Council has approved the full business proposals made. pool should proceed as set out in the Government has that confirmed the assets, and the Minister for Local towards the pooling of investment made to Government on progress guidance. Regular reports have been Regulations 2016 and Government (Management and Investment of Funds) Local Government Pension Scheme to meet the requirements of the Partnership pool have been formulated asset pooling for the Brunel Pension The proposed arrangements for the boards of companies in which the However the Committee expects that countries. the same as they are in the developed of environmental protection are not conditions of employment and standards range of developing countries where markets investments, are made in a wide markets. It is noted that emerging or sectorsin either the UK oroverseas individual investments in companies on investment managers in choosing Committee does not place restrictions contributors and pensioners. The bodies, the current employee including council tax payers, employer for the benefit of the many stakeholders, maximise the value of investments made The primary aim of the Committee is to 5. liquidated, and capital is returned. Brunel Ltd until such time as they are will be managed in partnership with to be set up byBrunel Ltd. These assets to transition across to the new portfolios investment funds which will take longer commitments to long term illiquid Ltd. the However, Fund has certain assets will be invested through Brunel is envisaged that all of the Fund’s governance policy corporate environmental and Social, publications/ pension-fund/about-us/forms-and- www.dorsetpensionfund.org/dorset- investment: Fund’s policies relating to responsible Please follow the link below to view the which they invest. governance amongthe companies in and high standards of corporate promoting corporatesocial responsibility their influence as shareholders while pension funds, and to maximise investment interests of localauthority The LAPFF exists to promote the Authority Pension Fund (LAPFF). Forum The Fund is a member ofthe Local term interests. of the proper account shareholders’ long- manage that company’s affairs taking looks to the directors ofa company to operations, and the Committee therefore board policy decisions but also in daily environmental issues arise not only in interests of the shareholders. Social and thereby further the long-term financial to social environmental matters and Fund invests should pay due regard

Appendix 2 - Investment Strategy Statement | 118 Appendix 2 - Investment Strategy Statement | 119 aspx?CId=135&MId=1106&Ver=4 co.uk/ieListDocuments. http://dorset.moderngov. below to view the most recent report: previous year. Please follow the link an annual report on voting activity in the The Pension Fund Committee receives governance and proxy voting. industry leader in the field of corporate years of experience and is a recognised investors worldwide. ISS has close to 30 management solutions, to institutional platform and leading compliance and risk including an end-to-end proxy voting and related governance research services, proxy research, vote recommendations ISS’s core business is the provision of Institutional Shareholder Services (ISS). The Fund has outsourced proxy voting to may be considered. voting differently to the agreed policy Fund on any contentious areas where agreed policy. LAPFF also advise the used to according this advice and the (NAPF) and the Fund’s voting rights are National Association of Pension Funds Advice on such issues is taken the from UK and overseas equity investments. The Fund has a voting issues policy for 6. investments rights) voting attaching to (including the of exercise rights Policy of Report Pension Administration Strategy Appendix 3 diverse needs of the membership. As the administration service to meet the responsible for delivering the pensions stakeholders, which between them are the joint working ofa number ofdifferent person or one organisation, but is rather service is not the responsibility of one Delivery of such an administration pensions and administration service. effective, inclusive and high quality standards towards providing a cost- outlining the policies and performance Administration Strategy statement This document is the Pensions members. employers and ultimately the LGPS authority”) on behalf of qualifying out by Dorset Council (“the administering the Dorset area. The service is carried employers who are not situated within LGPS on behalf of a number ofqualifying Dorset. The Fund also administers the (“LGPS”) within the geographical area of the Local GovernmentPension Scheme is responsible for the administration of Dorset County Pension Fund (“the Fund”) Introduction in its policies in relation to any of the appropriate following a material change statement and make revisions as The Fund will review this policy Review day-to-day use; Dorset County Pension Fund website for provided in the Guide Employers' on the it intended to replace the information of the Regulations set out belownoris override any provision or requirement no circumstances does this strategy be reviewed annually by the Fund. In Pension Administration Strategy will The undertakings set out within this each of the relevant employers. Fund. A copyofthis strategy is issued to service amongst the employers and the in delivery of the pension administration and ensure agreed standards of quality working relationships, improve efficiency statement seeks to good promote employers within the Fund, this Developed in consultation with Compliance efficient cost-effective provision. it is in everyone's interests to ensure an each employer via the contribution rate, and effectively recharged pro-rata to cost of this service is borne by the Fund, www.dcpfemployers.org January 2020. Dorset County Pension Fund and 1 from to all existing and future employers of and, as such, the contents of which apply Pensions Board on 3 December 2019 considered and by approved the Local This document has been presented, section. Performance under these Regulations. See Poor in performance carrying outits functions of that employing authority's level of costs have been incurred because an from employing authority where administering authority costs to recover LGPS Regulations 2013 allows an In addition, Regulation 70 of the communication with employers. measure, data performance flows and detailing administrative standards, pension administration strategy”) authority to prepare a document (“the 2013 enables an LGPS administering Regulation 59 of the LGPS Regulations Regulatory Framework informed ofthe changes. Employers will be consulted and matters contained in the strategy.

Appendix 3 - Pension Administration Strategy Report | 120 Appendix 3 - Pension Administration Strategy Report | 121 • • • Their key responsibilities will be: administering the LGPS. (PLO)) with regard to any aspect of point of contact (Pension Liaison Officer a named individual to act as the main Each Employing authority will designate are met. and ensure that statutory requirements receive the appropriate level of service members, and other interested parties, organisations to ensure Scheme with a number ofindividuals in different working ofthe administering authority authority, but depends on the joint responsibility of just the administering effective administration service is not the The delivery of a high quality, cost Communication Liaison and changes immediately; and to notify the Fund of any authorised signatures are correct nominated representatives and to ensure that details of all of serviceare maintained; to ensure that standards and levels Directors of Finance; Human Resources, Payroll teams, within the employer - for example, communications to appropriate staff to act as a conduit for PLO is actively encouraged. per year. Attendance by each employer's Officer (PLOG) Group meetings 3 times The Fund will hold Pension Liaison • • • • • responsibilities highlighting: Fund. The employer workshops cover if requested or deemed necessary by the times per year but more will be provided Employer workshops are arranged 3 Employer Training / Meetings • • • • Communications End of Year requirements LGPS Discretions Final Pay Starter and leaver processes Administration Strategy in with accordance the Pensions payments due to the Fund are made promotional activities; and to ensure to assist and liaise with the Fund on Fund; the timely submission of data to the to assure data quality and ensure service arrangements required; to inform the Fund of any alternative when required; communications literature as and to arrange distribution of writing. must be notified to the employee in to membership or entitlement to benefits authority affecting an employee's rights Any decisions made by an employing Employee’s Rights of Notification within one month of the effective date. employees within the employing authority Fund and made readily available to all policy statement must be sent to the where revisions are made; the revised statement must be kept under review and within the LGPS regulations. The policy discretionary functions available to them policy regarding the exercise of certain publish and maintain a statement of Each employer is required to produce, Discretions Policy can be arranged on request. Meetings with senior pension fund staff Management is actively encouraged. each employer's main contact and Senior changes to the LGPS. Attendance by this has included updates on future issues for the Fund; in recent times Investment and Performance topical information on Fund Finances, meeting where officers provide The Fund holds an annual employers' and Employers. number ofresponsibilities for the Fund The LGPS Regulations identifies a Employer Fund and Responsibilities scheduled maintenance of the system. hours with the exception of any necessary available for use during normal office Administration computer system is The Fund will ensure that the Pensions membership. enquire on their employee's of record to produce retirement estimates and in order foremploying authority staff hardware and facilities communication employers, providethe software, The Fund will, to appropriate large Computer Links kept current with the Fund. details of this nominated person must be be made. The name, job title and contact Disputes Resolution Procedures should applications under Stage 1 of the Internal nominate and name the person to whom Each employing authority is required to Procedures (IDRP) Internal Disputes Resolution Performance Standards are held within Performance Standards tables: the following contract orwithin two weeks of starting work. booklet and application either form, with their To provide each new employee with an LGPS part of any induction process. To ensure that pensions information is included as Employers’ Responsibility New Appointments leave the scheme within three months of appointment. automatic entry, who do not wish to join, or elect to or paper format of any eligible employees subject to To send the Fund notification in agreed electronic the Fund notified. membership shall be maintained separately and employment with the same employer, each Where there is more than one contract of the employee's first pay date. Address to the Fund within 1 calendar month of Insurance Number, Date of Birth and Home Form containing information including National starters complete the Pension Membership To assist the Fund in ensuring that all new starter form. by electronic interface, monthly return or YourFund Team each month with details of their start date date of appointment, and provide the Pensions admission are brought into the LGPS from the To ensure that all employees subject to automatic Employers' Responsibility New Starters within five weeks of request by the employer. regulatory changes and provide sufficient stock To update pension information in with accordance information/forms for inductions. To provide to employers on request appropriate Fund’s Responsibility working days of receipt of the notification. on the pension administration system within 30 To and accurately record update member records pension administration system. To these accurately record member recordson the employer. Form if starter information has been provided by within 10 days of receipt of Pension Membership To write to member sending a Transfer Booklet records on the pension administration system. To accurately record and update associated member Fund's Responsibility

Appendix 3 - Pension Administration Strategy Report | 122 Appendix 3 - Pension Administration Strategy Report | 123 Conditions of Service: Employer to respond to End of Year queries within 10 working days of request. End of Year contribution return to be sent to the Fund by the 30th April. End of Year Year End of Each employer must ensure that the relevant contributions are deducted, if required. • • • • • • • Status: The changes include: the change. employees on YourFund orby electronic interface within 1 calendar month of To ensure that the Fund is informed ofany changes in the circumstances of Employers' Responsibility Annual BenefitIllustrations Valuation and Address National Insurance Number Status Marital Change of Name Date Joined Scheme (if adjusted) Employee Numberand/orPost Number Contractual Hours within 3 months of member's request. notify members, where appropriate by the 5 October of the year concerned or To calculate the LGPS member's Annual Allowance under HMRC Legislation and 30 April of that same year. for all members where the employer has sent end of year contribution return by To issue Annual Benefit Illustrations by the 31 August of the year concerned by the employer with regard to specific requirements. system within 30 working days of notification or any shorter period as requested To accurately record and update member records on the pension administration provide a template for the secure submission of data electronically. To provide forms for recording any key change in circumstances and/or to Fund's Responsibility

Guide; Further information on ill health retirements can be found in the Employers years and notify member ofcessation if applicable. To review all Tier 3 ill health retirement cases prior to discontinuance at three To inform the Administering Authority if and when the pension should cease. (IMRP) approved by the Administration Authority for a further medical certificate. month review of their gainful employment and any subsequent appointment with an To keep a record of all Tier 3 ill health retirements, particularly in regard to the 18 where possible but in all cases no later than 15 working days after retirement date. To submit the appropriate form to the Fund at least one month before retirement an ill health award is to be made and determine which tier 1, 2 or 3. Practitioners (Independent Medical Registered Practitioners (IMRP)) whether Administering Authorities approved Independent Medical Registered To determine based on medical opinion and advice of one of the Employers' Responsibility Ill Health Retirements www.dcpfemployers.org. Further information can be found in the Employers Guide: To submit leaver no later form than 15 working days after retirement date. least one month before retirement where possible. To submit the pre-retirement information via to YourFund form the Fund at Employers' Responsibility Actual Retirement For larger bulk estimates, requests can be made in alternative formats. requests chargeable as per Charging Schedule - Appendix A) (Only 1 estimate request per member rolling year allowed, additional To submit a request using the estimate on form YourFund Employers' Responsibility Retirement Estimates https://dcpfemployers.org/?s=ill+health

deferred benefits from the date of the suspension”. Update the member recordsas becoming a To calculate and any recover overpayment ofpension benefits. timescales. To calculate and pay required benefits inline with actual retirement Fund's Responsibility following retirement. To pay any pension payment on the last working day of each month, being after the date of retirement. 10 working days of receipt of all relevant forms and certificates subject to To issue a final retirement letter and make payment of any lump sumwithin working days of notification employer. from To issue the member with a pre-retirement letter and information within 15 Fund's Responsibility retirement estimates without the resource ofFund staff. To provide large employers with the appropriate software to produce separate agreed timescales for bulk requests. To issue the quotations within 15 working days of receiving the request or by Fund's Responsibility “pensioner member with

Appendix 3 - Pension Administration Strategy Report | 124 Appendix 3 - Pension Administration Strategy Report | 125 retirement reduction should be waived. should be released early on compassionate grounds and whether any early approved by the Administering Authority, to determine whether benefits on ill health grounds after seeking a suitable medical opinion an from (IRMP) early, a determination as to whether or not they are eligible for early payment On application the from employee to former have their deferred benefits paid www.dcpfemployers.org Further information can be found in the Employers Guide; suffering from a potentially terminal illness and provide details of the next of kin. To inform the Fund immediately of the death of an employee or when a member is Employers' Responsibility Death In Terminal Service and Illness • • • • • • • Scheme with deferred benefits as early payment of benefits may be required: To keep adequate records ofthe following for memberswholeave the Employers' Responsibility Former Members with Deferred Benefits To supply member with a Leaver Election Form. of the event. membership and all other relevant information via YourFund within one month To notify the Fund of the employee's date and reason for cessation of Employers' Responsibility Members Leaving Employment Before Retirement National Insurance Number Name and Last known address Date and reason for leaving Salary details Last job including job description Date of Birth Payroll Number

employer costs within 15 working days of request. To provide estimates of benefits that may be payable and any resulting their deferred benefits updated by accrued annual pensions increase award. To provide former members, where possible, an annual benefit illustration of Issue deferred benefit notification within 2 months of notification by employer. To and record update member recordson pension administration system. appropriate caring manner. options are made available and that the payment of benefits are expedited in an To assist employers, employees and their next of kin in ensuring the pension Fund's Responsibility Fund's Responsibility 40 days. payment of benefits, the options available and deferred benefit entitlement with To inform members who leave the Scheme, who are not entitled to immediate system. To accurately record and update member records on the pension administration Fund's Responsibility www.dcpfemployers.org More information can be found in the Employers Guide, 22nd (for electronic payments) of the month following deduction. payment to the Fund no later than the 19th day (for chequepayments) or To collect the from employee payroll, contributions and to arrange the prompt Employers' Responsibility ASBCS) Benefits (ARCSand Additional of deductions. of its employees no later than the 19th day of the month following the period To pay the appropriate AVC providercontributions deducted payroll from To pay all rechargeable items to the Fund within four weeks of the invoice. employers' discretionary policy on adjusting employee contribution rates. To alter employee contribution rates at all other times in line with the To apply the employer and correct employee contribution rate. www.dcpfemployers.org Further information can be found in the Employer Guide: monthly-financial-returns/ Monthly Financial Return which is form available at To ensure that all payments made to the Fund are supported by a completed injury allowances under an agreed schedule. borne by the Fund e.g. early retirement strain cost, compensatoryadded years, To re-imburse the Fund for all pension payments made which are not to be the period of deductions. cheque payments) or 22nd (for electronic payments) of the month following of its employees and employer contributions, no later than the 19th day (for To pay the Fund all contributions deducted payroll (not from including AVCs) Employers' Responsibility Obligations Financial www.dcpfemployers.org/

member and employers and issue quotations within 15 working days. Additional Benefit Survivor Contributions (ASBC's) on request to the LGPS To provide information on Additional Regular Contributions (ARCs) and Fund's Responsibility to show membership of AVCscheme. To and record update member recordson pension administration system The Fund will inform employers of any recharge items as they become due. Inform each employer ofany new contribution banding. the LGPS Regulations 2013. Interest will be charged forlate payment as detailed in Regulation 71(4) of Payment of Employeeand Employer Pension Contributions Policy. To monitor employercontribution payover as detailed in the Fund's To allocate the received contributions to each employers record. Fund's Responsibility

Appendix 3 - Pension Administration Strategy Report | 126 Appendix 3 - Pension Administration Strategy Report | 127 Report. reported in the Annual Pensions Board and monitored by the Local employers will be measures across all the Fund performance The annual figures for been received. and documents have all necessary information quoted applies only once In all cases the standard Task Standards Performance - Fund Administration change in the Regulations. No later than 6 months after being informed by the Fund of any relevant AND officers orcommittee of the Employer OR any changes being made. This must be done within 30 days of policybeing agreed by the appropriate See Appendix B for details of Discretions. found in the Employers Guide, provide a copy ofthis to Administering Authority. Moreinformation can be as required under the LGPS Regulations using the Discretions template and Formulate, publish and update (as necessary) an Employer Discretions Policy Employers' Responsibility Policy Discretions www.dcpfemployers.org Estimate requests processed Processing of death grants Processing of survivor pensions Notification of death processed Deferred benefits processed for payment following receipt of election New retirement benefits processed for payment following receipt of election New retirement letters sent detailing options Annuity quotations calculated APC Illustrations calculated Deferred benefits calculated Refund payments Estimates for divorce purposes processed Changes in details processed Respond to members general postal/telephone enquiries Notification of deferred benefits Provision of inward transfer quotes Payment of transfer values New Starters processed - electronic/paper Letters/emails acknowledged Task waiving of actuarial reductions on any of these. between 55 and 60, additional pension awards, flexible retirement and discretions. This currently includes application of rule of 85 for members the Employer, Fund will not process anything which involves Employers Where the Fund does not have an up to date discretions an policy from relevant change in the Regulations. keep the policies under review and will update within 6 months of any Discretions Policy as required under the LGPS Regulations. The Fund will Formulate, publish and update (as necessary) an Administering Authority Fund's Responsibility 15 Days 5 Days 10 Days 5 Days 20 Days 5 Days 10 Days 5 Days 10 Days 40 Days 15 Days 30 Daysor21 DaysforCourtOrdered requests 30 Days 10 Days 40 Days 15 Days 20 Days 30 Days 10 Days (working days) Standard published in the Annual Report. Pensions Board. A summary will be Pension Fund Committee and the Local performance will be monitored by the quality measures and standards of Details of the costs of administration, with other administering authorities. and service performance by benchmarking The Fund will regularly monitor its costs Benchmarking Employing authority cooperation. and where appropriate implemented with recommendations will be considered external auditors. Any subsequent both from internal and approved with any requests for information Employers are expected to fully comply of its processes and internal controls. The Fund is subject to an annual audit Audit Total Correspondence (DR24 & DR24A) Deaths (DR23) Refunds (DR16 & DR16W) Deferred Benefits (DR11 & DR11W) DR14T, DR12A, DR14A, DR14F) Retirements (DR14, DR14W & DR12 & DR12I & DR14I, Estimates (DR22, Employer DR22I, DR22R & DR22W) Estimates Employee (DR08) Transfers Out actual (DR09A & DR10A) Transfers Out (DR09E & DR10E) Transfers In Actual (DR02A & DR03A, DR03G) Transfers In Quote (DR02E, DR02R, DR03E & DR03R ) Admissions (DR01 & DR01W) Top 10 detail - casescompletedontime

are provided in Appendix A. services, details of all the charges that apply The Fund may also charge for other recover any additional costs arising. employing authority the Fund will seek to being taken to achieve improvement by an and a lack of any evidence of measures In the event of continued poor performance into the future. processes to improve the level of service development to put in place appropriate provide the necessary training and in identifying areas of poor performance, opportunity, to work closely with employers The Fund will seek, at the earliest regularly the key performance measures. The Local Pensions Board will monitor Performance Poor Employer Performance Reporting in period Completed 21750 2762 4246 3206 2829 4922 330 335 977 299 534 380 930 Performance 96.51% 99.70% 98.41% 93.33% 99.10% 99.49% 95.99% 96.82% 98.16% 99.25% 94.45% 97.84% 97.11% (days) KPI 30 15 15 15 10 10 20 15 40 30 5 5 on time or early Cases completed 20990 2718 3963 3028 2768 4780 329 332 972 287 517 373 923 • • • • • Fund will: In dealing with the poor performance printing and distribution costs. party computer charges and additional respect of actuarial fees, legal fees, third Ombudsman and additional charges in imposed by the Courts or the Pensions from the employer. These may include fines by the employing authority will be recovered administrative failures or poor performance incurred by the Fund as a consequence of Any third party costs or regulatory fines published Annual Report; administration report in the Fund's meeting and part may form of the Board at the next available of recoveryto the Local Pensions will report any claim for the cost area(s) of poorperformance; resources in resolving the specific taking of time account and make a claim for cost recovery, action by the employing authority; has been a failure to take agreed employing authority or where there improvement is demonstrated by the issue written formal notice, where no and how these can be addressed; discuss area(s) of poorperformance meet with the employing authority, to area(s) of poorperformance; Write to the employer setting out the

Appendix 3 - Pension Administration Strategy Report | 128 Appendix 3 - Pension Administration Strategy Report | 129 • • • • • • • • • • • • • • with the overriding legislation, including: LGPS, The Fund and Employers will comply In performing the role of administering the Overriding Legislation Data of Standards • above legislation. and any future amendments to the Department Guidance; Current Government Actuaries HMRC Legislation and; Employment Rights Act 1998; Health and Safety Legislation; the Finance Act 2004; the Equality Act 2010; the Freedom of Information Act 2000; the Data Protection Act 2018; Regulations 2006; the Discretionary and Compensation currently in place; any Transitional Regulations the Public Pensions Pensions Act; Regulations 1986; (Disclosure of Information) the Occupational Pensions Schemes; Regulations; the General Data Protection Regulator where deemed necessary. Report the employer to the Pensions and-publications/ dorset-pension-fund/about-us/forms- https://www.dorsetpensionfund.org/ Dorset County Pension Fund website: The policy can be accessed on the procedures of the delegation. of reference,structureand operational scheme of delegation and the terms of the Fund.This statement sets out the and duties in respect of the investment Pension Fund Committee various powers Dorset Council has delegated to the Governance Policy media/5690/communications-policy.pdf www.dorsetpensionfund.org/ Dorset County Pension Fund website: The policy can be accessed on the • • • on: The statement outlines the Fund's policy Policy Communications Statements Policy Associated employing authorities prospective members and their The of the promotion Scheme to of distributing such information; The format, frequencyand method representatives and employers; Information to members, www.dcpfemployers.org found in the Employers Guide: A list of the Employer discretions can be • • • employing authority to: The LGPS Regulations require every Employer Discretions privacy-policy.pdf www.dorsetpensionfund.org/media/5691/ County Pension Fund website: The policy can be found on the Dorset on the retention of personal data. This statement sets out the Fund's policy Data RetentionPolicy privacy-policy.pdf www.dorsetpensionfund.org/media/5691/ County Pension Fund website: The policy can be accessed on the Dorset holds and how it is used. Notice explains the information the Fund data about scheme members. The Privacy The fund collects and processes personal Statement Privacy revise it as necessary. keep it under review; discretions provided by the LGPS; on how it will exercise the various issue a written policy statement

(1). - Regulation80 Exchange information of documents Strategy to PensionsAdministration Regulations 2013 excerpts related Government Local PensionScheme publications/ dorset-pension-fund/about-us/forms-and- website: found on the Dorset County Pension Fund Administering Authority Discretions can be A copy of the Dorset County Pension Fund • • • administering authority to: The LGPS Regulations require every Administering Authority Discretions a) A Scheme employer must - revise it as necessary. keep it under review; discretions provided by the LGPS; on how it will exercise the various issue a written policy statement concerning members; and for adjudication of disagreements) under regulation 74 (applications appointed by the Scheme employer decisions) or by an adjudicator under regulation 72 (first instance decisions made by the employer administering authority of all inform the appropriate www.dorsetpensionfund.org/ (3). (2).

b) a) b) a) If - b) national insurance number; the employee's date of birth and the employee's name and gender; asked to supply it. employer that information if that authority must give that employer's Schemefunctions, dischargingemployer for that required by the person's Scheme information about that decision is Scheme employer;and a person for whomit is not the administering authority) about 76 (reference of adjudications to (decisions of the adjudicator) or 72 (first instance decisions), 75 any decision under regulations an administering authority makes Scheme year - an activemember during the each employee of who hasbeen details inrespect the following administering authority giving statement to the appropriate Scheme employer must give a each Scheme of year, each Within three the months of end discharging its Scheme functions. information as it requires for give that authority such other

(4).  d) c) f) e) d) c) b) a) paragraph (3)(d) is - The required information by

active and member; which the employee has been an relating to each employment in a unique reference number contributions). 17 (additional voluntary or employerunder regulation any contributions by employee contributions); 16 (additional pension or employerunder regulation any contributions by employee pensionable pay; in relation to the employee's any contributions by the employer reduction in contributions) applied; while regulation 10 (temporary employee contributions deducted the pensionable pay received and applied; while regulation 9 (contributions) employee contributions deducted the pensionable pay received and the dates of active membership; which is specified in paragraph (4). question for each employment employee for the Scheme year in the information relating to the

Appendix 3 - Pension Administration Strategy Report | 130 Appendix 3 - Pension Administration Strategy Report | 131 (2). (1). Regulation 59 Pension administration strategy-

c) iii.  ii. i. b) a) The matters are - it does so,paragraphs(3) to(7) apply. administration strategy”) and,where considers appropriate (“itspension mentioned inparagraph (2) asit relation tosuch ofthe matters of the authority's policiesin prepare awritten statement An administering authority may authority and its Scheme secure that the administering procedures which aim to appropriate; administering authority considers such other means as the associated matters, or about levels and of performance the making of agreements the setting of performance targets, Scheme functions by - to achieve in carrying outtheir Scheme employers are expected administering authority and its which the of performance the establishment of levels scheme employers”); administering authority (“its in relation to which it is the communication with employers procedures forliaison and

ii. i. f) e) d) strategy as it considers its from pension administration such other matters arising sub-paragraph (b), and established performance under have achieved the levels of and its Scheme employers the extent to which that authority reports dealing with - administering authority of annual the publication by the (b); established under sub- paragraph against levels of performance Scheme functions when measured performance in carrying out its of that employer's unsatisfactory level of performance) on account arising from Scheme employer's regulation 70 (additional costs any of its Scheme employers under consider giving written notice to administering authority may the circumstances in which the to those functions; to each other of information relating authority and its Scheme employers communication by the administering procedures for improving the about levels of performance; functions and with any agreement requirements in respect of those employers comply with statutory (5).  (4).  (3). b) a) publish - An administeringauthority must appropriate. such other persons asitconsiders its scheme consult employers and administering authority must strategy, an administration to itspensions making revisions In preparing orreviewing and b) a) An administeringauthority must - g) the strategy as revised. where revisions are made to it, strategy; and its pension administration the strategy. to any of the matters contained in change in its policies in relation appropriate following a material make such revisions as are strategy under review; and keep its pension administration strategy. suitable for inclusion in that considers appropriate, to be and such other persons as it consulting its Scheme employers the administering authority after such other matters as appear to appropriate; and (1).  - Regulation70 employer's performance level of arising fromScheme costs Additional (8).  (7).  (6).  functions under these functions Regulations. performance incarrying outits that employer's of level of from aScheme employer because which should be costs recovered authority, it hasincurredadditional an administering of the opinion This regulation applieswhere, in as aScheme its functions employer. authority include, where applicable, an administering the of functions In this regulation references to under these functions Regulations. strategy when carrying outtheir regard to the pension administration its Scheme employers must have An administeringauthority and practicable. as isreasonably State of as soon its employers to the and Secretary it toeachof it mustof send acopy strategy, or that strategy as revised, publishes its pensionadministration When an administeringauthority (2).  (1).  employers - Regulation71 Interest on latepayments by Scheme

a) employer stating - give written notice tothe Scheme The administering authority may amount. overdue topayinterest on that or payments) contributions is regulations 67 to 70 (employer's which anypayment is due under former Scheme employer from require a Scheme employer or An administeringauthority may c) b)

matters in sub-paragraphs (a) or (b). decision to give the notice and to the strategy which are relevant to the regulation 59, the provisions of the administration strategy under authority has prepared a pension where the administering specified amount is calculated; and costs and the basis on which the authorities) in respect of those employers to administering 69(1)(d) (payments by Scheme should pay under regulation determined the Scheme employer the amount the authority has mentioned in paragraph (1); reasons for forming the opinion the administering authority's member. parties - not least of which the Scheme information to the various associated meet in providing certain pieces of standards that Pension Schemes should Overriding legislation dictates minimum (4).  (3).  (2).  with three-monthly rests payment compounded date of and day basisfromthe due date tothe per cent abovebaserate on adayto regulation must at one be calculated Interest payableunder this date when that payment is due. (b)) is overduethe day afterthe referred and to inregulation 69(1) charge payable under regulation 68 authorities) (other than anextra Scheme employers to administering under regulation 69 (payment by The date onwhich any amountdue authority for payment. by the date specified administering is overdueonemonthfromthe employer's performance) level of arising fromScheme costs further payments), 70 (additional 68 contributions), (employer's under regulations 67 (employer's The date onwhich any amountdue

Appendix 3 - Pension Administration Strategy Report | 132 Appendix 3 - Pension Administration Strategy Report | 133 Appendix A-Charging Schedule Failure to pay invoices the from Fund within the prescribed payment period Estimate requests in excess of 1 required in a rolling year days of Fund request Failure to respond to requests for End of Year information to resolve queries within 10 working Failure to provide the Fund with the End of Year return by 30th April deduction of the contributions Failure to pay over the monthly contributions to the Fund by the 22nd of the month following Employer receiving notification Failure to notify the Fund of the death in service of a member within 10 working days of the amount ofinterest to the Provider Employer/Payroll interest becomes payable on any lump sumordeath grant paid, the Fund will recharge the total Where as a result of the Employer's/Payroll Providersfailure to notify the Fund of a retirement Failure to notify the Fund of any retirement within 15 days of retirement date out) within 1 month of the event Failure to notify the Fund of any member leaving the Scheme (termination of employment or opting- Failure to notify the Fund of changes in status within 1 month of the change Failure to notify the Fund of new starters with full information within 1 month of their start date England Base Rate plus 1% basis equal to the Bank of Interest calculated on a daily VAT per additional request £100 per estimate request plus £50 per query return is received day after required date to date £100 per workingday from England Base Rate plus 1% basis equal to the Bank of Interest calculated on a daily £250 per case of the LGPS Regulations 2013 with accordance Regulation 71 Interest calculated in £50 per case £50 per case £50 per case £50 per case Charge • • Notes toCharging Schedule of any interest due. Fund will be liable for the payment the information to the Fund, the member's representative to provide by the scheme member or scheme grant occurs as a result of a failure payment of a lump sum or death with three-monthly rests. If late date of payment and compounded day basis from the due date to the per cent above base rate on a day to interest must be calculated at one Regulations 2013 states that Regulation 71 of the LGPS www.dcpfemployers.org detailed in the Employer's Guide: must give full information as retirements and death in service changes, absences, leavers, Notifications of new starters, Web: [email protected] Email: Fax: Tel: Dorset DT1 1XJ County Hall,Dorchester Dorset CountyPensionFund Write to usat: details Contact www.dorsetpensionfund.org 01305 224049 01305 224845

Appendix 3 - Pension Administration Strategy Report | 134 Appendix 4 - Funding Strategy Statement | 135 Public Finance and Accountancy (CIPFA). Public Finance and Accountancy (CIPFA). edition) issued by the Chartered Institute of strategy statement in the LGPS 2016 (Preparing and Maintaining a funding prepared with regard to the guidance Strategy Statement (ISS) and has been conjunction with the Fund’s Investment This statement should be read in Fund Committee on 12 March 2020. publication by the Dorset Council Pension Waddingham LLP and was approved for assistance of the Fund’s Actuary, Barnett This statement has been prepared with the Dorset County Pension Fund. capacity as administering authority, for the Dorset Council’s funding strategy, in its amended (the Regulations) and describes Pension Scheme Regulations 2013 as with Regulation 58 of the Local Government Fund). It has been prepared in accordance for the Dorset County Pension Fund (the This is the Funding Strategy Statement Introduction 12 March2020 - Statement Funding Strategy Appendix 4 the funding basis. the funding basis. employers’ contributions and prudence in transparency of processes, stability of aims of affordability of contributions, authority has balanced the conflicting seeks to set out how the administering but may be mutually conflicting. This FSS These objectives are desirable individually • • • • Statement (FSS) is to: The purpose of this Funding Strategy Statement Funding Strategy Purpose ofthe funding those liabilities. Take a prudent longer-term view of met; and term cost efficiency of the Fund are that ensures the solvency and long- benefitsScheme member in a way meet the future liability to provide requirements to set contributions to Ensure that the regulatory Regulations; as defined in Regulation 62(6) of the primary contribution rate as possible, maintaining as nearly constant a Support the desirability of liabilities are best met going forward; identify how employers’ pension fund-specific strategy that will Establish a clear and transparent • • The purpose of the Fund is to: • • • The aims of the Fund are to: Fund Aims and purposes ofthe administering the Fund; and Meet the costs associated in under provided for the Regulations; benefits to Scheme members as Pay pensions, lump sums and other reasonable risk parameters. Seek returns on investment within employers alike; and of the administering authority and employers, and the risk appetite of the risk profile of the Fund and which should be assessed in light and long-term cost efficiency, and maintaining Fund solvency admitted bodies), while achieving taxpayers, scheduled, resolution and to all relevant parties (such as the undue risks) at reasonable cost administering authority not taking as possible and (subject to the to be kept as nearly constant Enable primary contribution rates liabilities as they fall due; resources are available to meet all effectively and ensure that sufficient Manage employers’ liabilities • • • • • The funding objectives are to: members when they fall due. which will become payable to Scheme bodies to provide forthe benefits Scheme members and the employing Contributions are paid to the Fund by Funding objectives • as far as possible, to the Fund, approaches to reduce the risk, Adopt appropriate measures and cost efficiency objective;and with consideration of the long-term rates are kept as stable as possible, a way that employer contribution Build up the required assets in such of participating employers; account the different characteristics assumptions, while taking into and using appropriate actuarial over an appropriate time period rates to target a 100% funding level Set levels of employercontribution Ensure the solvency of the Fund; the lifetime of the Fund; met as and when they fall due over Ensure that pension benefits can be income. transfer values and investment Receive and invest contributions, authority are to: responsibilities of the administering Fund is Dorset Council. The main The administering authority for the administering authority The out below. process and their responsibilities are set The key parties involved in the funding Key parties actuarial valuations. at compliance and consistency of the pension Fund. The review also looks the Scheme so far as relating to the and the long-term cost efficiency of level to ensure the solvency of the Fund valuations are set at an appropriate contributions set as part of the actuarial on whether the rate of employer the LGPS funds;this involves reporting review ofthe actuarial valuations of Section 13(4)(c) requires an independent of the Public Service Pensions Act 2013. review carried out under Section 13(4)(c) regard to the likely outcomes ofthe administering authority should also have In developing the funding strategy, the defaulting on its pension obligations. the taxpayer an from employer other employers and ultimately • • • • • • • • • • and Scheme employer; and dual role as both Fund administrator conflicts of interest arising its from Effectively manage any potential performance; Monitor all aspects of the Fund’s other interested parties; also the ISS after consultation with Prepare and maintain this FSS and Actuary; process in conjunction with the Fund Manage the actuarial valuation employer default; against the consequences of Regulations to safeguard the Fund Take measures as set out in the liabilities as and when they fall due; Ensure that cash is available to meet Regulations; members as stipulated in the Pay the benefits due to Scheme Investment Strategy Statement; with accordance the Fund’s Invest the Fund’s assets in as stipulated in the Regulations; and other amounts due to the Fund contributions, investment income Collect employee and employer the LGPS Regulations; Operate the Fund in with accordance

Appendix 4 - Funding Strategy Statement | 136 Appendix 4 - Funding Strategy Statement | 137 • • • • • administering authority, are to: that participates in the Fund, including the The responsibilities of each employer participate in the Fund. a number of other Scheme employers In addition to the administering authority, employers Scheme • ceasing participation in the Fund. Pay any exit payments due on and procedures; with accordance agreed policies and or other additional costs in Meet the costs of any augmentations Regulations; discretions as permitted under the discretions and exercise those Develop a policy on certain other membership changes promptly; any new Scheme members and any Notify the administering authority of statutory timescales; administering authority within the certified by the Fund to Actuary, the own employer contributions, as and pay these together with their Collect employee contributions see fit. review the valuation process as they Enable the Local Pension Board to • • • • responsibilities of the Fund Actuary are to: Barnett Waddingham LLP. The main The Fund Actuary for the Fund is Fund Actuary and Local Government(MHCLG). by the Ministry of Housing, Communities make contributions into the Fund as set Active Scheme members are required to members Scheme effect of employer default; protect the Fund against the financial other forms ofsecurity required to recommending the level of bonds or relating to new employers, including Provide adviceand valuations exiting the of employersfrom Fund; Provide adviceand valuations on the added years costs, etc; retirement costs, compensatory pension strain costs, ill-health benefit-related matters such as the funding aspects of individual connection with bulk transfers and Prepare advice and calculations in regard to the FSS and the Regulations; administering authority and having after agreeing assumptions with the solvency and long-term cost efficiency rates at a level to ensure Fund setting of employers’ contribution Prepare valuations including the are set out in the table below: 2019. The results of the 2019 valuation the Fund was carried outas at 31 March The most recent actuarial valuation of funding objectives are being met. an actuarial valuation to check that the time reviewed from to time by means of and the contributions payable to be is necessary for its financial position finances are constantly changing, so it The factors affecting the Fund’s Funding strategy • • • Funding level Surplus (Deficit) 2019 results valuation the Fund. affecting the financial position of Advise on other actuarial matters in advising the Fund; and which may be of relevance to their role or other professional requirements is aware of any professional guidance Ensure that the administering authority required by the Regulations; between valuations as permitted or contributions need to be revised in assessing whether employer Assist the administering authority 92% (£255m) liabilities each for employer in the Fund. assets in the Fund to meet the accrued The funding target is to have sufficient meet that target over an agreed period. levels of employercontribution rates to establish a funding target and then set employers’ contribution rates is to The key objective in determining Funding method the sections below. and assumptions adopted is set out in the Fund. of the A summary methods to meet all future benefit payments from and future contributions will be sufficient paid to ensure that the existing assets employers’ contributions that should be the valuation is to determine the level of the from Fund. The main purpose of projection of future cashflowsto and The actuarial valuation involves a of the Fund’s 2019 valuation report. Adjustments Certificate which forms part rates are set out in the Rates and The individual employer contribution payroll p.a. of futurebenefit was accrual 17.7% of required to the cover employer cost On a whole Fund level, the primary rate employers is given below in the Deficit how the secondary rate is calculated for Regulation 62(7). Further details of the secondary rate, as defined in contribution rate is referred to as rate to calculate an employer’s total The adjustment required to the primary • • service). These are evaluated as follows: accrued afterthe valuation date (future service) and benefits expected to be accrued before the valuation date (past is to consider separately the benefits For all employers, the method adopted cost of benefits accruing in future. contributions is expected to cover the in combination with employee the individual employers which, of contributions required from of the Regulations) is the level rate as defined in Regulation 62(5) (also referred to as the primary The future service funding rate less than 100% indicates a deficit; and over liabilities; while a funding level of of 100% indicates a surplus of assets pensions. A funding level in excess future increases to members’ pay and service. It makes allowance for assets to liabilities in respect of past Fund. This is the ratio of accumulated The past service funding level of the lifetime of active members. or the remaining expected working period, such as the length of a contract benefits that will over a accrue specific Method assesses the average cost of the Unit Method is that the Attained Age between this method and the Projected Attained Age Method. The key difference funding method adopted is known as the For closed employers, the actuarial accrual only. represents the cost of one year’s benefit future service cost, the primary rate of this method is that, in assessing the Projected Unit Method. The key feature method that is adopted is known as the For open employers, the actuarial funding total contribution rate. employer in the Fund may also affect the expected period ofparticipation by an new staff access to the Fund. The employer –one which no longer permits recruits access to the Fund, or a “closed” “open” employer – one which allows new depend on whether an employer is an circumstances and in particular may will depend on specific employer The to approach the primary rate section. amortisation recovery/surplus periods

Appendix 4 - Funding Strategy Statement | 138 Appendix 4 - Funding Strategy Statement | 139 • valuation can therefore be considered as: The assumptions adopted at the turnover etc. of mortality, early retirement and staff pay increases, investment returns, rates future finances such as price inflation, about the factors affecting the Fund's is necessary to formulate assumptions In completing the actuarial valuation it model funding Valuation assumptionsand each employer. details of the open or closed status of used. The administering authority holds therefore the Projected Unit Method is are generally open employers and higher education bodies and academies) other employers (for example councils, is used in setting their contributions. All and therefore the Attained Age Method Fund as part of an outsourcing contract admission bodies who have joined the the closed employers in the Fund are circumstance, however,in general to reflect an employer’s specific The by approach employer may vary paid, and of benefits and contributions being estimates of the likelihood ortiming assumptions which are essentially The (or statistical)demographic levels at retirement, it is necessary to make levels at retirement, it is necessary to make As some of the benefits are linked to pay Future pay increases CPI assumption. made to the RPI assumption to derive the A deduction of 1.0% p.a. is therefore mainly to different calculation methods. has historically been less than RPI due (CPI). Inflation as measured by the CPI in the level of the Consumer Price Index Pension increases are linked to changes Future pension increases duration of an LGPS Fund. years is consistent with the average year point on the curve is taken as 20 straddling the valuation date. The 20 market conditions over the six months inflation with curve, consideration of the England implied Retail Price Index (RPI) using the 20 year point on the Bank of Retail Price Index (RPI). This is derived of the liabilities, as measured by the period with commensurate the duration the future level of price inflation over a The base assumption in any valuation is Future price inflation • and their current (or present) value. of benefits and contributions payable determine the estimates of the amount The financial assumptions which will to reflect the administering authority’s to reflect the administering authority’s employer targeting a cessation event or This may be, for example, to reflect an reflect an individual employer’s situation. discount rate approach to be taken to It may be appropriate for an alternative referred to as the “ongoing” discount rate. The discount rate so determined may be six months straddling the valuation date. considering average market yields in the Fund’s long-term investment strategy by that is expected to be earned from the estimate of the rate of investment return projected liabilities reflects a prudent The discount rate that is applied to all present day values. future payments to and from the Fund to requirements it is necessary to discount liabilities and derive future contribution To determine the value of accrued Future investment returns/discount rate increases. which includes allowance for promotional at 31 March 2019 was CPI plus 1.0% p.a. term pay increase assumption adopted as price inflation in the longer term. The long- increases with pay increases exceeding close link between price inflation and pay increases. Historically, there has been a an assumption as to future levels of pay the table below: the table below: adopted for the 2019 valuation is set out in A summary of the financial assumptions authority. after consultation with the administering will incorporate any such adjustments poses to the Fund. The Fund Actuary views on the level of risk that an employer to employers at an individual level by to employers at an individual level by The Fund’s assets are notionally allocated to the valuation of the liabilities. and is calculated as a consistent approach referred to as the smoothed asset value straddling the valuation date. This is conditions during the six months date, adjusted to reflect average market the accumulated fund at the valuation asset value used is the market value of For the purpose of the valuation, the Asset valuation Discount rate Pay increases increases andCARErevaluation Pension/deferred pension CPI inflation RPI inflation assumptions asat31 March 2019 Financial 5.0% p.a. + 1.0% p.a. CPI inflation CPI inflation In line with 2.6% p.a. 3.6% p.a.

ruled that the transitional protection In December 2018, the Court ofAppeal have implications for the LGPS. directly in relation to the LGPS, however, do 1 April 2015. These judgements were not 2015 public service pension schemes from following the introduction of the reformed implementation of transitional protection age and gender discrimination in the the government in relation to possible cases which were brought against in relation to two employment tribunal The McCloud/Sargeant judgements were McCloud/Sargeant judgements valuation report. adopted are included in the Fund’s 2019 Further details of the assumptions the Fund and/or individual employers. reflect the individual circumstances of statistics, adjusted as appropriate to on Fund-specific experience and national incorporated into the valuation are based The assumptions demographic Demographic assumptions benefits paid). employer (e.g. contributions received and and out of the Fund in respect of each on the assets and cashflows paid into allowing for actual Fund returns achieved of the discount rate assumption. expects it is likely to be less than 0.05% with certainty, however,the Fund Actuary be agreed the cost cannot be calculated assumption. As the remedy is still to prudence allowance in the discount rate of McCloudwas by covered the more expensive, the potential impact benefits being uplifted and becoming order to mitigate the risk of member part of the Fund’s 2019 valuation, in current and future LGPS benefits. As is still unclear howthis will affect At the time of drafting this FSS, it below in the Regulatory risks section. Further details of this can be found including the LGPS. to amend all public service schemes, 2019 statement that it expects to have been noted by government in its 15 July future service benefits. It has, however, may affect LGPS members’ past or so it is not yet clear how this judgement and applied to all public serviceschemes, the Employment Tribunal or negotiated remedy is still to be either imposed by request for an appeal in the case. A Supreme Courtdenied the government’s discrimination. On 27 June 2019 the the reforms amounted to unlawful offered to some members as part of

Appendix 4 - Funding Strategy Statement | 140 Appendix 4 - Funding Strategy Statement | 141 Ministerial Direction can be found here. Ministerial Direction can be found here. April 2016. Details of this outcome and the implement this outcome, with effect from 6 Direction on 4 December 2018 to April 2021. HMT published a Ministerial those individuals reaching SPA before 6 service pension would be extended to the GMP element of individuals’ public pension schemes to fully price protect that the requirement for public service pension schemes consultation, concluding and equalisation of GMP in public service published the outcome to its Indexation On 22 January 2018, the government found here. public service pension schemes can be method of indexation and equalisation of addressed. Information on the current between men and needs women to be payment of public service pensions a resulting potential inequality in the (SPA) post-December 2018. In addition, and expect to reach State Pension Age their from public service pension scheme Guaranteed Minimum Pension (GMP) in a future formemberswhoaccrued pension payments should be increased needs to consider how public service pension provision, the government As part of the restructuring ofthe state equalisation and indexation Guaranteed Minimum Pension (GMP) monetary amount. percentage of payroll or as a fixed adjustment may be set either as a a maximum period of 19 years. The an adjustment to fund the deficit over required employercontributions includes discloses a deficit then the level of Where the valuation for an employer attributable to their section of the Fund. their own share of deficit or surplus level; each employer in the Fund has applies down to an individual employer the actuarial assumptions. This theory actual experience of the Fund differs to accrued liabilities, depending on how the assets will be different to the value of in time, the value of the accumulated recognised that at any particular point the cost of benefits as they it accrue, is to build up sufficient assets to meet Whilst one of the funding objectives is periods Deficit recovery/surplus amortisation pay the entire inflationary increase. is assumed that the Fund will be required to members that reach SPA after this date, it remainder of the inflationary increase. For 2016, with the government providing the members that have reached SPA by 6 April that the Fund will pay limited increases for The 2019 valuation assumption for GMP is period not exceeding three years. the increase may be phased in over a increase significantly then, if appropriate, Where an employer's contribution has to • • • • employer will depend on: period that is adopted for any particular deficit period or amortisation recovery the interest cost paid by employers. The future adverse experience and reduce affordable. This will provide a buffer for periods have been used where individual employers. Shorter recovery at the 2019 valuation varied amongst The deficit periods adopted recovery contribution. of futurelevels of employers’ The implications in terms of stability and employer in the Fund (if applicable); The remaining contract length of an participation in the Fund; in place) and any limited period of employer (including any security The covenant of the individual liabilities; deficit relative to that employer’s The significance of the surplus or the table opposite: at the 2019 valuation are summarised in The funding pools adopted for the Fund is small. where the number ofSchememembers recognise characteristics common or of determining contribution rates to employers are pooled for the purposes certain However, groups of individual circumstances. employers to reflect their ownparticular contribution rates are set for individual participate in the Fund. Accordingly, pensions its for own employees who responsible for the costs of providing individual employer should be The policy ofthe Fund is that each employers individual of Pooling it no longer appropriate to pool a Conversely, the Fund may consider forming the funding pool. appropriateness and practicalities of the from Fund Actuary to consider the employers. Advice should be sought is possible to a form pool forthese and potential merits for pooling, it employers with similar characteristics Where the Fund identifies a group of a fundingpool Forming/disbanding pooled employers. cross-subsidy of pension cost amongst that ultimately there will be some level of contribution levels, although recognising to produce morestable employer The main purpose ofpooling is Pool Dorset Council Weymouth College SLM Poole Small Admitted Bodies Small Scheduled Bodies Academies and Poole Council Bournemouth, Christchurch Type pooling of pooling Past and future service place with another employer in the Fund. place with another employer in the Fund. Fund with a risk-sharing arrangement in There are employers that participate in the Risk-sharing arrangement remains appropriate. valuation, in order to ensure the pooling regular basis, at least at each actuarial Funding pools should be monitored on a the from Fund Actuary. scenario arises, advice should be sought by that dominant employer). Where this the results of the pool are largely driven a dominant party in the pool (such that characteristics or an employer becoming to divergence of previously similar group ofemployers.This could be due Notes the same funding level same total contribution rate and have All employers in the pool pay the

Appendix 4 - Funding Strategy Statement | 142 Appendix 4 - Funding Strategy Statement | 143 below. These are considered in more detail admission bodies and new academies. of new employers joining the Fund are appropriate. The types most common Fund assets to the new employer as new employer and allocate a share of the contribution rates payable by the the Fund Actuary is required to set When a new employer joins the Fund, Fund joining the employers New relevant responsible employer. by the risk-sharing arrangement to the allocating any deficit/liabilities covered arrangements were allowed for by At the 2019 valuation, risk-sharing guaranteeing employer. falls to the letting authority or relevant credit, as any deficit or surplus ultimately any exit payment, nor receiving any exit Fund, it is not responsible for making employer ceases participation in the employer. When the pass-through authority or relevant guaranteeing as this risk remains with the letting does not take on the risk of underfunding arrangement the pass-through employer through provisions: under this participating in the Fund with pass- For example, there are employers on an accounting basis). calculated on an alternative basis (e.g. opening position may be different when on the relevant funding basis and the a fully funded basis. This is calculated the new admission body starts off on value of the benefits transferred, i.e. a share of Fund assets equal to the the new admission body is allocated these cases, it may be appropriate that This is known as a full risk transfer. In to be over the accrued contract length. transferring members and the benefits associated with the benefits accrued by responsible for all the pensions risk body joins the Fund, they will become Generally, when a new admission contract Funding atstartof members. the Fund in respect of the transferred is required to pay contributions into which the new admission body employer limited period (the contract length), over Typically these transfers will be for a Schedule 2 Part 3 of the Regulations). academy to an external provider under a transfer of services a from council or to another body (forexample as part of an from existing employer in the Fund a result commonly of a transfer of staff New admission bodies in the Fund are bodies Admission individual arrangement. individual arrangement. in these cases will be bespoke to the the new admission body. The approach determine the contribution rate payable by additional adjustments may be made to sharing arrangements are in place, then arrangement, for example if any risk Depending on the details of the appropriate recovery period. the aim of recovering the deficit over an will also incorporate a secondary rate with admission body then the contribution rate there is a deficit allocated to the new will represent the primary rate only; where funded basis then the contribution rate at the start of the contract is on a fully open or a closed basis. Where the funding The contribution rate may be set on an rate Contribution to the transferring members. the full value of the benefits attributable on a fully funded basis or maynot reflect risk transferred and may therefore not be admission body will reflect the level of the initial assets allocated to the new approach is not adopted. In these cases, contract such that a full risk transfer arrangements made as part of the thereHowever, may be special that arise from: to remain responsible for pensions costs is for the common new admission body Although pensions risk may be shared, it the letting authority. part of the pensions risk remains with For example, it may be agreed that all or deal with the pensions risk differently. may make agreement a commercial to bodies and the relevant letting authority authority where new required, admission to agreement with the administering out above) is subject most common, Although a full risk transfer (as set Risk-sharing authority. which is satisfactory to the administering provide an alternative form ofsecurity bond, the new admission body may a new admission body to enter into a If, forany reason, it is not desirable for authority and administering authority. the Regulations, if required by the letting with accordance Schedule 2 Part 3 of be required to put in place a bond in future, the new admission body may meet its obligations to the Fund in the new admission body will not be able to To mitigate the risk to the Fund that a Security level of the pool at the conversion date. allocated assets based on the funding academies funding pool and will be new academy will part become of the On conversion to academy status, the Funding atstart a Scheme employer in its own right. sponsoring multi-academy trust) becomes status, the new academy (or the When a school converts to academy New academies sought where required. to risk-sharing arrangements should be Legal and actuarial advice in relation the Fund. any undue risk to the other employers in The arrangement also should not lead to agreement or any other side agreement. the admission agreement, the transfer the is approach clearly documented in risk-sharing arrangements as long as The administering authority mayconsider • • decisions. redundancy and early retirement and commencement; accrued priorto contract including the effect on service above average pay increases, • example: alternative approach is permissible. For and the other parties involved that an is agreed by the administering authority as a single lump sumpayment, unless it exiting employer will be due to the Fund Any deficit in the Fund in respect of the the from Fund to the exiting employer. to the Fund or the exit credit payable payment due the from exiting employer is also required to determine the exit and employees. former The Fund Actuary held by the exiting employer’s current the liabilities in respect of the benefits actuarial valuation in to order determine Actuary will be asked to out an carry required under the Regulations the Fund and becomes an exiting employer, as When a Scheme employer exits the Fund Cessation valuations 2019 valuation. for the academies funding pool at the line with the contribution rate certified new academy joins the Fund will be in The contribution rate payable when a rate Contribution agreed period; payment can be spread over some administering authority that the exit It may be agreed with the

Appendix 4 - Funding Strategy Statement | 144 Appendix 4 - Funding Strategy Statement | 145 from the from Fund. This is set out in the surrounding an employer’s exit some which may affect the regulations potential changes to the Regulations, government is currently consulting on At the date of drafting this FSS, the Regulatory factors employer’s cessation scenario. and the specific details surrounding the approaches depending on the employer the Fund Actuary mayadopt differing attributable to the exiting employer, In assessing the value of the liabilities legal documentation. between the relevant parties and any exit credit, subject to the agreement treated differently to a payment of an respect of the exiting employer maybe Similarly, any surplus in the Fund in • • within the following three years. membership to a new employee if it intends to offer Scheme administering authority, for example subject to agreement with the The employer’s exit may be deferred employer; or the Fund to another participating the employer maytransfer within The assets and liabilities relating to the transfer date. basis updated for market conditions at members, based on the latest funding past service liabilities of the transferring transfers than more the value of the the agreed basis) and will not pay bulk to cover the value of the liabilities on paid the from ceding Fund are sufficient a fully funded transfer (i.e. the assets receive the bulk transfer on no less than but in general the Fund will look to situation surrounding each bulk transfer The agreement will be specific to the calculated. be paid one from Fund to the other is terms by which the value of assets to for the bulk transfer – specifically the will be required to negotiate the terms case, the Fund Actuary forboth Funds Funds or non-LGPS Funds. In either Fund can take place other from LGPS Bulk transfers of staff into or outofthe Bulk transfers Regulatory risks section below. Further details of this can be found in the consultation document. and the management of employer risk changes to the local valuation cycle Local government pension scheme: contributions, it is recognised that there contributions, it is recognised that there liabilities and stable levels of employer sufficient assets to meet pension satisfy the funding objectives of ensuring Whilst the funding strategy attempts to and countermeasures Risks strategy. the funding strategy and investment This ensures consistency between the long-term investment strategy. considering the expected return from actuarial valuation is derived by discount rate that is adopted in the As explained above, the ongoing set out in the ISS. by the long-term investment strategy as return which is expected to be achieved FSS, and the expected rate of investment the funding strategy as set out in the relates to the discount rate that underlies Strategy Statement (FSS) and the ISS The main link between the Funding Statement (ISS) Links with the Investment Strategy are transferred to the receiving Fund. transferring employer in its original Fund the assets and liabilities attributable to the relation to an employer merger, where all issued Direction Order. This is generally in A bulk transfer may be required by an p.a. contribution by around 2.5% of payroll decrease/increase the required employer valuation of the liabilities by 10%, and discount rate will decrease/increase the increase/decrease of 0.5% p.a. in the real assumption). Broadly speaking an assumption and the price inflation difference between the discount rate to the real discount rate (i.e. the The valuation results are most sensitive performance targets. investment strategy failing to achieve their are employed to implement the chosen expected and/or the fund managers who including market returns being less than This could be due to a number of factors, terms) that underlies the funding strategy. expected rate of investment return (in real investment strategy fails to produce the The main financial risk is that the actual risks Financial regulatory risks and governance risks. factors including demographic risks, financial, although there are other external The major risks to the funding strategy are strategy to meet the funding objectives. strategy and hence the ability of the are risks that may impact on the funding the past two funding valuations, the Fund the past two funding valuations, the Fund assumptions are kept under review. For Actuary at each actuarial valuation and the Fund is monitored by the Fund The actual mortality of pensioners in approximately 4%. in the Fund will increase the liabilities by one year to life expectancy of all members in longevity. For example, an increase of underestimate the continuing improvement to the funding strategy is that it might However, the main demographic risk continuing improvement in life expectancy. via the actuarial assumptions for a Allowance is made in the funding strategy Demographic risks continues to meet the funding objectives. to check whether the funding strategy funding updates between valuations In addition, the Fund Actuary provides matters. from the Fund Actuary on valuation related The Committee may also seek advice strategy. investment independent advisers and officers on managers and receives advice from the investment returns achieved by the fund Fund Committee regularly monitors the However, the Investment and Pension strategies. part of setting funding and investment maturity needs to be considered as is shorter and therefore the level of available to generate investment returns mature Fund or employer,the time that is near or in retirement. For a the greater proportion of its membership The more mature the Fund or employer, are to retirement (or already retired). of howclose on average the members employer in the Fund) is an assessment The maturity of a Fund (or ofan Maturity risk retirements. any additional costs arising from early additional amounts into the Fund to meet that require individual employers to pay retirements; and procedures are in place authority monitors the incidence of early retirements. However, the administering costs of early retirements and ill-health as a result of the additional financial increase by more than has been planned The liabilities of the Fund can also assumption for funding purposes. Fund and help set an appropriate mortality assess the mortality experience of the specialist longevity team in order to analysis by Barnett Waddingham’s has commissioned a bespoke longevity

Appendix 4 - Funding Strategy Statement | 146 Appendix 4 - Funding Strategy Statement | 147 participating in the Scheme. affect the cost to individual employers changes to the tax regime which may Regulations governing the Scheme and exposed to the risks of changes in the The funding strategy is therefore by the government. the invested assets is also determined central government. The tax status of set out in Regulations determined by and employee contribution levels are The benefits provided by the Scheme Regulatory risks section below. this can be found in the Regulatory risks to maturity risk. More information on which may affect the Fund’s exposure cycle and management of employer risk) scheme: changes to the local valuation consultation (Local government pension The government has published a order to meets its benefit payments. the risk of the Fund having to sell assets in the Fundalsofalls.Thisthereforeincreases the Fund to the benefits being paid out of the ratio of contributions being paid into active to pensioner members falls, meaning maturity: as a Fund matures, the ratio of to be considered alongside the level of The cashflow profile of the Fund needs are discussed in the sections below. funding valuations consultation. These cap mechanism and the timing of future McCloud/Sargeant judgements, the cost interest to the LGPS are in relation to the specific regulatory risks of particular At the time of preparing this FSS, • • • • the Fund and the LGPS, including: There are a number ofgeneral risks to proposed changes. on the financial implications of any and seeks the advice from Fund Actuary of any proposed changes in Regulations participates in any consultation process theHowever, administering authority next few years. reviewed by the government in the The State Pension Age is due to be government. scheme could be changed by the the LGPS or the structure ofthe scheme the benefits provided by More generally, as a statutory known. females, if implemented, are not yet equalisation between males and The potential effects of GMP benefits. what would happen to members’ in its it current form is not known If the LGPS was to be discontinued Advisory Board (SAB) in place and HMT Advisory Board (SAB) in place and HMT mechanism controlled by the Scheme Scheme, the LGPS also had a cost cap from 1 April 2019. However, as a funded requirement to enhance Scheme benefits a fall in these costs and therefore a The 2016 HMT cost cap valuation revealed management outcome. calculation, so have no impact on the cost levels of inflation are not included in the expected levels of investment returns and Therefore, assumptions such as future expected to live for and draw their pension. costs relating to how long members are the profile of the Scheme members; e.g. made to carry out valuations relating to relating to changes in assumptions “member costs”. These are the costs cost control mechanism only considers to be increases) in pension costs. The against unexpected changes (expected protection to taxpayers and employees service pensions with the aim of providing in after Lord Hutton’s review of public HMT cost cap mechanism was brought cap mechanism for the first time. The HM Treasury’s (HMT) employer cost was used to determine the results of The 2016 national Scheme valuation cap cost McCloud/Sargeant judgements and

case (Sargeant) in relation to the Fire case (Sargeant) in relation to the Fire favour of the claimants, while the second Judicial Pension Scheme was ruled in The first case (McCloud) relating to the gender and race discrimination. age discrimination, equal pay and indirect arrangements on the grounds of direct challenged the transitional protection tapered protection period. The claimants retirement or the end of a pre-determined pre-2015 schemes after 1 April 2015 until enabled some members to remain in their from 1 April 2015. Transitional protection 2015 public service pension schemes following the introduction of the reformed implementation of transitional protection relation to possible discrimination in the were brought against the government in to two employment tribunal cases which service schemes. This was in relation the cost cap process across all public announcing their decision to pause Appeal which resulted in the government was a judgement made by the Court of However, on 20 December 2018 there implemented from 1 April 2019. be consulted on with all stakeholders and cap. These benefit changes were due to LGPS to no longer breach the HMT cost proposed benefit changes in order for the allowed SAB to put together a package of covered: covered: in England and Wales. The consultation proposals to amend the rules of the LGPS a consultation seeking views on policy On 8 May 2019, the government published management cycle and employer of risk scheme: valuation changes tothe local government Local pension Consultation: future LGPS benefits will be. known what the effect on the current and At the time of drafting this FSS, it is not yet LGPS. all public service schemes, including the statement that it expects to have to amend noted by government in its 15 July 2019 service benefits. It has, however, been may affect LGPS members’ past or future so it is not yet clear how this judgement and applied to all public service schemes, by the Employment Tribunal or negotiated case. A remedy is still to be either imposed government’s request for an appeal in the June 2019 the Supreme Court denied the amounts to unlawful discrimination. On 27 to some members as part of the reforms ruled that the transitional protection offered In December 2018, the Court of Appeal Appeal decided to combine the two cases. two cases were closely linked, the Court of Both rulings were appealed and as the scheme was ruled against the claimants. quadrennial basis (i.e. every four years) quadrennial basis (i.e. every four years) Scheme valuation would take place on a HMT, Elizabeth Truss, that the national was announced by the Chief Secretary to every three years. In September 2018 it employer contributions being reviewed on a triennial basis which results in LGPS valuations currently take place future Timing of actuarial valuations where appropriate. the is outcome known and reviewed awaited. This FSS will be revisited once on 31 July 2019 and an outcome is now consultation was closed to responses The consultation is ongoing: the currently • • • • • membership. employers required to offer LGPS proposals for changes to the to exit credits; and proposals for furtherpolicychanges payments; proposals for flexibility on exit triennial to a quadrennial cycle; mitigating the risks a of movingfrom a number ofmeasures aimed at (quadrennial) cycle; year (triennial) to a four year valuations from the current three amendments to the local fund

Appendix 4 - Funding Strategy Statement | 148 Appendix 4 - Funding Strategy Statement | 149 • • The consultation covers: Managing employer exits from the Fund valuation in 2020 and then 2024. the same time with the next quadrennial should have the cost cap test happen at believed that all public sector scheme cost control cap mechanism and HMT Scheme valuation are used to test the schemes. This results of the national along with the other public sector pension • • due (for example a pass through account in calculating any exit credit exposure to risk to be taken into would require the exiting employer’s to exit credits. The proposed change Proposals for furtherpolicy changes payments. This includes: Proposals for flexibility on exit employer status). their existing liabilities (deferred ongoing commitment to meeting an exit payment in return foran employers to defer payment of Allowing employers with no active period. required exit payment over a fixed an exiting employer to spread the administering authority to allow Regulations the ability for the Formally introducing into the types of employers decreases with fewer term as the payroll in respect of these if not in the short term then in the long being insufficient to meet benefit outgo, increased risk of contribution income and the cashflow profile. For example, on the level of maturity of the Fund participate in the Fund, this could impact LGPS. As these types of employer offer new employees access to the education in corporations England to college and form corporations higher for furthereducation sixth corporations, proposed to remove the requirement education sectors, the government has of the further education and higher the LGPS and the changes in nature With consideration of the nature of LGPS to their non-teaching staff. required to offer membership of the corporations in England and Wales are corporations and higher education corporations, sixth college form the current Regulations further education At the time of drafting this FSS, under LGPS membership Changes to employers required to offer are made to the Regulations). due an exit credit if the amendments any pensions risk would likely not be employer whois not responsible for • • • impact on the funding strategy including: number of employer-specific events could Fund. Accordingly, it is recognised that a Many different employers participate in the Employer risks in the Fund. exit payment falling to the other employers able to meet the exit payment and thus the associated risk of the employer not being significant exit payment. This has the exit under the Regulations and a potential will gradually reduce to zero, triggering an membership attributable to the employers new members to the Fund, the active Fund. Should they decide not to admit becoming exiting employers in the the Fund in relation to these employers This also brings an increased risk to in the Fund. and fewer active members participating liabilities. having fully funded their pension An employer ceasing to exist without employees; and to close the Scheme to new An individual employer deciding employer’s membership; Structural changes in an individual triennial actuarial valuation process. least every three years to tie in with the consultation with the key parties, at This FSS is reviewed formally, in review and Monitoring the benefits accrued. paid are not adequate to cover the cost of then there is a risk that the contributions accurate data. If incorrect data is valued results of the actuarial valuation depend on responsible for keeping data up to date and benefits. The administering authority is members ultimately receive their correct Accurate data is necessary to ensure that Governance risks on funding and related issues. It also keeps individual employers briefed available on individual employer situations. it has the most up to date information ensure that, as administering authority, employers participating in the Fund to keeps in close touch with all individual In addition, the administering authority the Fund Actuary when required. events outlined, and takes advice from those which may be susceptible to the participating in the Fund, particularly monitors the position of employers theHowever, administering authority necessary. may reviewthe FSS morefrequently if Fund between actuarial valuations and monitors the financial position of the The administering authority also unconfirmed. contributions will be certified remains March 2022 but the period for which funding valuation will be due as at 31 this FSS, it is anticipated that the next July 2019. At the time of drafting risk consultation which closed on 31 cycle and management of employer scheme: changes to the local valuation government’s is due to be confirmed as part of the The timing of the next funding valuation 1 April 2020 to 31 March 2023. employer in the Fund for the period from the contribution rates payable by each out as at 31 March 2019, certifying The most recent valuation was carried Local government pension

Appendix 4 - Funding Strategy Statement | 150 Appendix 5 - Communication Policy Statement | 151 and any overriding legislation, on request, and any overriding legislation, on request, Provide a copy of the scheme regulations Pension Scheme are required to: administrators ofthe Local Government Information Regulations) 2013, Pension Schemes (Disclosure of Under the OccupationalandPersonal Minimum Standards describes some of ourfutureplans. methods and of communication This document explains our existing method of communication. This may involve using more than one the audiences receiving the information. appropriate communication mediumfor The Fund aims to use the most administered by Dorset County Council. Local Government Pension Scheme with the various stakeholders in the at ways to improve communications March 2016. We are continuously looking and 24,415 active members as at 31 currently has 298 scheme employers The Dorset County Pension Fund Introduction Communication Policy Statement Appendix 5 material change. version following will be republished any will bereviewedannually and a revised Communication This Policy Statement pension credit members. statement to all active, deferred and Compulsorily providean annual benefit within three months after) the change. soon as possible after (and in any event unknown) where possible before oras pensioners whose present address is (except excluded persons i.e. deferred LGPS to all members and beneficiaries Notify any material changes to the of receipt of a written request. recognised trade unions within two months members, spouses, beneficiaries and 12 months) to current members, prospective request (unless issued within the previous This information must also be provided on practical, within two months of joining. member before starting, or, if this is not about the scheme to every prospective Automatically provide basic information unions are entitled to this information. spouses, beneficiaries and recognised trade copy; members, prospective members, their for inspection or details of how to obtain a through providing a personal copy, a copy within two months of the request - either • • • • • • • Communication Objectives to the Local Government Pension Scheme. informed aboutcurrent andfuturechanges to ensure thatkeystakeholders are well and policiesinaclear informativestyle To communicate Pensions Legislation Key Objectives face communication. To engage where possible in face-to- pensions legislation in plain English To aim to communicate technical Government Pension Scheme to the administration of the Local in policies and procedures, in relation stakeholders about proposed changes To consult, where possible, with key as a benefit to scheme members an important tool in recruitment and To promote the pension scheme as and the pension fund need to make regarding pensions them to make the decisions they To inform stakeholders to enable administration of the pension fund about the management and To keep all stakeholders informed in the way we communicate and to seek continuous improvement communicating with stakeholders, To use the most appropriate ways of relevant details. Further newsletters are relevant details. Further newsletters are changes to the scheme and any other members up to date with proposed A newsletter is issued annually to keep Employee Newsletters there will be a charge of £50 + VAT levied. further estimate with a 12 month period Statement. If the member requests a year, in addition to the Annual Benefit further estimate of benefits per rolling All active members are entitled to one improve our procedures for this process. about our statements has helped us 31 August. Feedback from our members These are issued to our members by Statements Annual Benefit Active Scheme Members service. a high aim toprovide means quality and their representatives, through various former scheme and members, and We communicate with our current of Communication Methods • - - - communication objectives: To evaluate the effectiveness of our

Customer surveys. compliments; Monitoring complaints and questionnaires; Feedback

also be found on our website. different aspects of the LGPS; these can are available on request covering Information guides, leaflets and forms Pension Fund Publications regulation or operation as any issues arise. importance, such as changes in scheme sent to members highlighting issues of Our Key Audience Groups

pensions website. This report can be found online at our pension benefits is published annually. of the performance pension fund and on the management, administration and An Annual report containing information Annual Report

Appendix 5 - Communication Policy Statement | 152 Appendix 5 - Communication Policy Statement | 153 of the following formats: the information may be presented in one existing, proposed and new legislation; with employers. Our aim is to explain throughout the county by arrangement We are available for presentations and Presentations roadshows [email protected] Email: Tel: communications by post and by fax. bank holidays). We also receive and send and 8:40am to 4:00pm Friday (except 8:40am to 5:20pm Monday to Thursday for queries. Telephone lines are open telephone number and email address The pensions helpline is a dedicated Pensions Helpline https://www.mypension.dorsetcc.gov.uk pension death grant nomination benefits and update their address and pension online, account estimate future Active members are able to check their My PensionOnline regularly updated and revised. is available to view at all times. It is at Our pension fund website can be found Pension Fund Website www.yourfund.org.uk/Dorset 01305 224845 and https://www.mypension.dorsetcc.gov.uk nomination their address and pension death grant their pension account online, update Active members are able to check My PensionOnline regularly updated and revised. available to view at all times. It is www.dorsetpensionfund.org Our pension fund website can be found at Pension Fund Website £5.00 a payslip will also be sent. If the monthly amount alters by more than A payslip is sent annually to all pensioners. Pensioner’s Payslips relevant information. pensions increase and also any other to inform pensioners of the annual pensioners. This newsletter is used An annual newsletter is sent to our Pensioner Newsletters Pensioner Members • • • pre-retirement seminars face to face education sessions scheme information LGPS presentations, including new and is regularly updated and revised. and is available to view at all times. It is at Our pension fund website can be found Pension Fund Website contact details for further information. nomination of cohabiting partner form and expression of wish forms, transfer forms, short guide, membership form, death grant to all new starters and includes a Scheme pensions pack is issued. This pack is sent On commencement of employment a Starter Pack New Prospective Scheme Members https://www.mypension.dorsetcc.gov.uk pension death grant nomination benefits and update their address and pension online, account estimate future Active members are able to check their My PensionOnline regularly updated and revised. and is available to view at all times. It is at Our pension fund website can be found Pension Fund Website members annually. These are issued to our deferred Illustration Annual Benefit Deferred Deferred Scheme Members www.dorsetpensionfund.org www.dorsetpensionfund.org

Communications Team. the RelationshipEmployer and for employers to use when contacting ([email protected]) There is a dedicated email address pensions liaison officers around the county. technical advice and guidance to our employers. This enables us to circulate up an email contact list for the scheme The Dorset County Pension Fund has set Email Contact List www.dcpfemployers.org Employers Section: information on a variety of subjects. and publications along with useful holds all relevant up to date forms forms ouronline Guide Employer and to the scheme employers. This a section of their website dedicated The Dorset Pension Fund maintains Employers Website Scheme Employers closed to Elected Members. Councillor Members.The LGPS is now and forms specifically aimed at Elected Members, including information Scheme Members are also available for All the provisions we have made for Elected Members Dorset County Pension Fund. Dorset County Pension Fund. at the employer’s request by contacting the requirements. These meetings are available basis for an employer to discuss individual Meetings can be arranged on an individual Individual Employer Meetings on a relevant topic. discussed. There is also a presentation or ouradministrative are procedures any changes to scheme regulations are invited to attend. During the meeting three times a year. All scheme employers These meetings are held a minimum of Pension Liaison Group Officer Meetings information of interest to LGPS employers. least once a year, containing a variety of A newsletter is sent to all employers, at Employer’s Newsletters https://dorset.yourfund.org.uk Your Fund Home Page: pension on-line. forms employers to upload files and submit secure internet portal which allows This is Dorset County Pension Fund’s Your Fund to the correct audience. to the correct audience. to ensure relevant communications are sent manager and a officer. It is their responsibility communications, this team consists of a There is a team dedicated to employers and Communications Team and Employer Relationship qualifications in pension administration. are encouraged to take, and helped with, internally and externally. Members of staff attend training events and conferences both to all members of staff. Staff are able to Individual training is provided, as required, Pensions Staff Fund Staff and can be found on our website. members of the public and all stakeholders employers. It is also made available to Report is published and distributed to all The Dorset County Pension Fund Annual Annual Report provided in the meeting. and there are a variety of presentations An employers meeting is held annually Employer Meeting to employers in different locations. Pension Fund offer a variety of presentations Throughout the year the Dorset County Presentations

Appendix 5 - Communication Policy Statement | 154 Appendix 5 - Communication Policy Statement | 155 the Dorset County Pension Fund. Brunel helps manage the investments for investments of 10 likeminded funds. bringing together circa £30 billion is one of eight national LGPS pools, Brunel Pension Partnership (Brunel) Brunel PensionPartnership pensions software. topics such as or communications the SWAPOG meet to discuss specific pensions administration. Sub groups of to discuss and share information on The SWAPOG which meets regularly Group (SWAPOG) Area PensionsOfficer South West Other Parties Management through this mechanism. of the Executive Director of Corporate concern / importance to the attention Manager is able to bring any matters of Corporate Management. The Pensions convened by the Executive Director of Team and attends regular meetings of the Financial Services Management The Pensions Manager is a member Meetings Senior Management regulations or practice. update all staff on any changes to Meetings are held once a month to Meetings Team

following terms of reference: formally at least and quarterly, has the The Pension Fund Committee meets Pension FundCommittee parties and members of the public. of Information requests external from and MCHLG and will respond to Freedom Pensions Regulator, Secretary ofState Government bodies such as HMRC, the We regularly exchange information with Others understood by all interested parties. Unions to ensure the Scheme is We will work with the relevant Trade Trade Unions all pension related matters. regional events to keep up to date with officers regularly attend national and The Fund is a member ofthe PLSA, and Association (PLSA) Saving Pension and Lifetime regular training on a bespoke basis, as Members of the Committee receive relating thereto. deal with Regulations and all matters Government Superannuation Act and as Scheme Manager under Local the To exercise of Council all functions • • • • Fund Committee is as set out below: The current membership of the Pension publications/ pension-fund/about-us/forms-and- www.dorsetpensionfund.org/dorset- Fund’s website, and can be found at: Strategies. These are published on the a number ofPension Fund Policies and The Committee set and regularly review issues that affect the Fund. the Committee are kept informed of the formal meetings, and ensures that contact with the Committee outside of The Pensions Manager is in regular their responsibilities. they are fully informed to fully undertake conferences and seminars to ensure that well as attending a number ofnational One Scheme Member representative. One District Council representative; by the Borough ofPoole; Borough Council and one nominated one appointed by Bournemouth Two Unitary Authority members - the Council’s Cabinet); more than one being a member of appointed by the County Council (not Five County Council members - ensure that the DCPF is managed and The Local Pension Board also help • • • • • • to: the Public Service Pensions Act 2013 is as defined by sections 5 (1) and (2) of The function of the Local Pension Board a Local Pension Board. County Pension Fund (DCPF) has created With effect 1 from April 2015 Dorset Pension Board does not have a conflict of interest. does not have a conflict of interest. appointed to the Local Pension Board Local Pension Board or person to be ensure that any member of the such information as it requires to provide the Scheme Manager with the LGPS for the DCPF; and governance and administration of secure the effective and efficient regulations may specify; in such other matters as the LGPS the LGPS by the Pensions Regulator; requirements imposed in relation to to secure compliancewith administration of the LGPS; relating to the governance and regulations and any other legislation to secure compliancewith the LGPS assist the Scheme Manager; times a year. representatives and meets at least 2 member representatives and 3 employer County Pension Fund consists of 3 The Local Pension Board of the Dorset Board. Scheme Advisory Pensions Regulator and the LGPS guidance issued by government, The schemes and with due regard to and administration of public pension Pension Act 2013 on the governance and complies with the Public Service administered effectively and efficiently

Appendix 5 - Communication Policy Statement | 156 Appendix 5 - Communication Policy Statement | 157 Publications Matrix Publications Scheme Guide Employer LGPSUpdates Employer Newsletters Employer Forms& Factsheets Employer’s Guide Annual Report and Accounts Investment Strategy Administration Strategy Communication Strategy Statement Funding Strategy Statement Deferred Benefits Guide Opt Out Form Pensioner Forms & Factsheets Member Forms& Factsheets Deferred Member’s Annual Benefit Statement Scheme Member’s Annual Benefit Statement Pensioner Newsletter Scheme MemberNewsletter Scheme InformationLeaflets Councillors’ Guide New Starter Pack Communication Material Communication Paper- based                      Electronic Form                      Website                      When Published As required 3 per year Constantly available Constantly available Annually Constantly available Constantly available Constantly available Constantly available Constantly available Constantly available Constantly available Constantly available Annually Annually Annually Annually Constantly available Constantly available Constantly available Constantly available When Reviewed n/a n/a Annually Annually Annually Annually Annually Annually Annually Annually Annually Annually Annually Annually Annually n/a n/a Annually Annually Annually Annually We collect and process personal data those who providepersonal data to it. Pension Fund values the privacy of Pension Scheme and the Dorset County authority of the Local Government Dorset Council as the administering (GDPR) General Data ProtectionRegulations • • • feedback; now providing the following methods of Dorset County Pension Fund. We are the service they have the received from stakeholders to provide feedback on We are continuously seeking ways for • • communications; improve our the following in the future to further with all stakeholders and aim to deliver improvement in our communications We aim to achieve continuous Improving OurStandards Illustrations. tear in out form all Annual Benefit at presentations; paper based feedback form provided online feedback form; emails. feedback buttons added to all pension scheme on our website; improved general information on the Contact Details Contact Notice. the contact details set out in the Privacy the Dorset County Pension Fund using process personal data, please contact it. For moreinformation about how we information we collect and how we use The Privacy Notice describes what media/5691/privacy-policy.pdf www.dorsetpensionfund.org/ accessed here. A copyofthe Privacy Notice can be in with accordance our PrivacyNotice. www.dorsetpensionfund.org Web: [email protected] Email: Fax: Tel: County Hall, Dorchester, Dorset DT1 1XJ Dorset County Pension Fund Write to usat:

01305 224049 01305 224845

Appendix 5 - Communication Policy Statement | 158 Appendix 6 - UK Stewardship Code Principles | 159 its appointed asset managers to do so. Stewardship Code, and also encourages seriously. It seeks to adhere to the its responsibilities as a shareholder The Dorset County Pension Fund takes the value of investments. is conducive to protecting and enhancing a strongergovernance culture corporate extent to which they follow the Code, as institutional investors to report on the of Pension Funds (NAPF) encourage all The FRC and the National Association investors oversee the companies they own. more transparency in the way in which shareholders and company boards, and promoting a better dialogue between the quality of corporate governance by The purpose of the Code is to improve listed companies in which they invest. investors when engaging with the UK sets out goodpracticeforinstitutional Stewardship Code (the Code). The Code Council (the FRC) published the UK On 2 July 2010 the Financial Reporting of Compliance Statement UK Stewardship CodePrinciples - Appendix 6 with the Council’s Constitution. interest would be dealt with in accordance and prejudicial Interests. Any conflict of Constitution sets out policies for personal time to time. Dorset County Council’s conflicts of interest will arise from stewardship code assumes that The should be publicy disclosed. this policy interest in relationtostewardshipand of on managingconflicts robust policy Principle 2:The fund shouldhavea managers where applicable. and intervening in companies to asset to day responsibility for monitoring across the market, but delegates day concern at individual companies and to keep informed ofpotential issues of Fund uses membership of the LAPFF and the internal manager. The Dorset by a combination of asset managers The Fund’s UK Equities are managed Authority Pension Fund (LAPFF). Forum and through membership of the Local its arrangements with its asset managers policy is to apply the Code both through Strategy Statement (ISS). The Fund’s is stated in the published Investment The Fund’s approach to Governance stewardship responsibilities. on howitwilldischarge policy disclose Principle 1:The fund shouldpublicly the resolution will be voted against. the resolution will be voted against. accordance with the Fund’s Voting Policy, that a resolution merits a dissent vote in where a governance matter dictates be referred to the LAPFF. In addition, shareholder value, the concern will If a matter is considered to affect enhancing shareholder value. activities asamethod ofprotecting and guidelines onwhen andhowitwillescalate Principle 4:The fund shouldestablish clear forum’s activities. annually to keep up to date with the attend meetings of the LAPFF at least are received the from LAPFF. Officers across the market, and regular reports concern at individual companies and to keep informed ofpotential issues of Fund uses membership of the LAPFF regularly to discuss activity. The Dorset Fund Committee and meet with officers Asset Managers report tothe Pension and report backon activity undertaken. companies, intervene where necessary, the Fund expects them to monitor to the appointed asset managers, and the Fund’s equity holdings is delegated Day to day responsibility for managing investee companies. Principle 3:The fund shouldmonitorits Principle 5: The fund should be willing Electronic Voting) in the UK, and to Fund to act collectively with other investors Manager Pictet Asset Management where appropriate. in respect of overseas markets. This The Fund seeks to work collaboratively includes consideration of company with other institutional shareholders in explanations of compliance with the order to maximise the influence that Corporate Governance Code. Votes are it can have on individual companies. exercised in accordance with the Fund’s The Fund seeks to achieve this through Voting Policy, however it is possible for membership of the LAPFF, which Officers to override the vote of RREV to engages with other companies over support the actions of the LAPFF. Real environmental, social and governance Time reports are available detailing how issues on behalf of its members. votes have been cast. The Dorset Fund’s principal means of collaborate engagement is through Principle 7: The fund should report membership of the LAPFF. LAPFF periodically on their stewardship and coordinates collaborative engagement voting activities. with companies, regulators and policies. The Fund discloses voting data LAPFF periodically issue voting alerts, periodically, but intends to formally make

which are analysed with regard to the statistics available to the Pension Fund Appendix 6 - UK Stewardship Code Principles | 160 Fund’s own engagement policy. The Committee annually in future. In addition, decision to participate in such collective the Fund intends to report annually on decisions is made on a case by case stewardship activity through a specific basis. section on voting and engagement activity undertaken during the year in the Principle 6: The fund should have a clear report and accounts. This will include policy on voting and disclosure of voting both fund specific information including activity. engagement with companies, and details The Dorset Fund exercises all votes of activity undertaken through the Local attaching to its UK equity holdings, and Authority Pension Fund Forum. seeks to vote where practical in overseas markets. Responsibility for the exercise of voting rights has been delegated to RREV (Research, Recommendations, Appendix 7 - Brunel Climate Change Policy | 161 (b) (a) particular contribution to make: There are three areas where we have a challenge. while also helping to address the climate to understand and manage these risks, risk. We see our role as helping them and ultimately their exposure to climate asset allocation and investment strategy, Our Clients retain responsibility for their and regulated company. ‘Brunel’ to refer to the FCA-authorised funds in the UK. We use the name Local Government Pension Scheme assets (around £30bn/$40bn) of ten manages the investment of the pension Brunel was formed in July 2017 and economic growth and a thriving society. system which supports sustainable a more sustainable and resilient financial Clients’ interests through contributing to returns over the long term, protecting our Brunel aims to deliver stronger investment future which isfitforalowcarbon system point plantobuildafinancial Brunel - Afive- Climate Change Policy Appendix 7 industry and with policy makers,and influence broader in the investment investment managers we appoint, significant direct influence over the Partnership Ltd. 20/01/2020 by Approved the Board of Brunel Pension driving change together. fit for a low carbonfutureis pivotal to to building a financial system which is this policy. Our mutual commitment of ourClients in the development of significant support and contribution We would like to acknowledge the (c) and others. conjunction with our Client funds and in performance, particular in ability to influence company practice the increase to 1.5°C. The signatories pre-industrial levels and to aim to limit to well below 2°C to compared global temperature rise this century Paris Agreement committed to keeping respond. The signatories to the 2015 World governments have started to such as water and agricultural land. greater conflict over natural resources climate-affected from regions and in turn leading to increased migration infrastructure, flooding and water supply, is impacting agriculture and food supply, and sea levels, among other changes. It events and significantly affecting rainfall frequent and more extreme weather pre-industrial levels. This is causing more at approximately 1°C of warmingabove any point in history. The world is already climate is changing faster than at almost Scientific evidence suggests that our for us. therefore a strategic investment priority our Clients and their beneficiaries. It is planet. It has direct implications for of everyeconomyand country on the ecological, societal and financial stability systemic and material risk to the Climate change presents an immediate for ourClients Climate change is anissue for usand effectively to the physical impacts of economy and to ensure that we adapt successfully transition to the low carbon have a critical role to play if we are to change adaptation and mitigation. They opportunities presented by climate Investors are exposed to the risks and What is the investors? role of by 2050. and achieve a net zero carbon economy us to eliminate most or all fossil fuel use and structure ofoureconomy requires significant change in the shape and to the low carboneconomycalls for kept to well below 2°C. The transition temperature rise this century is to be to do muchmoreif the global among others), will need (individuals, companies and investors, Governments and all sectors of society for society and the environment. has potentially catastrophic implications to compared pre-industrial levels. This towards a world of 4°C of warming progress, we are currently heading efforts in the years ahead. Despite emissions, and to strengthen these would take to reduce greenhouse gas (NDCs) that set out the actions they nationally determined contributions agreed to adopt and implement

Our role in driving change Our roleindriving effective adaptation. to enable the low carbontransition and support policy makers in taking action will result climate from change. We can the regulatory and other changes that companies we invest in are resilient to for adaptation. We can ensure that the the capital required for mitigation and climate change. We are a key source of than supporting change. addressing climate change rather contributes to the challenge of and financial markets more generally The nature of the investment system, acting is far tooslow. regulators and policy makers are that and required, the pace at which infrastructure is approximately half of capital is being invested in low carbon pre-industrial levels, the rate at which temperatures are already 1°C above change is clear. Global average The case for urgent action on climate system. financial The play inthe state of

and influencing the investment system. and influencing the investment system. means our focusmustbe onshaping The stateofplayinthe finance sector • • • • • see are: Some ofthe specific challenges we at taking account ofclimate risk. models that are inherently flawed Backward looking investment risk not priced by the market. when climate performance, risk is benchmarks to measure conventional market weighted the system, not least, the use of and conflicts of interest through Instances of perverse incentives change mitigation or adaptation. substantive contribution to climate investment products that make a  A general absence of investable relatively unproven. technologies are perceived to be policy support or wherethe where the areas depend on public in low carboneconomy, particular that support the transition to the An unwillingness to invest in areas investors and companies. drives short-term thinking by than which long-term performance An emphasis on short-term rather

Appendix 7 - Brunel Climate Change Policy | 162 Appendix 7 - Brunel Climate Change Policy | 163 in which they invest. We will challenge with the companies and other entities of howthey invest and how they engage them to think deeply about all aspects investment managers invest. We expect real and substantial change in how One area of focuswill be on driving Working with investment managers change in their own right. enabling ourClientstobe agents of partnership with others, through and only through our owneffortsbut in system in the at scale,not financial Our prioritymust be to catalysechange Climate Policy. system and that should be the focus of our is to shape and influence the investment given our position, the opportunity for us limited without wider change. However, risk at the margin, but the impact will be can take some specific actions, mitigating respond effectively to climate change. We is fit for purpose, we will not be able to If we do not have a financial system that position in the investment industry. of ourClients provides us with a unique influence and the strength and support and opportunities, our scale, our managing climate change-related risks Brunel’s experience and expertise in managers’ engagement with companies is managers’ engagement with companies is that do. If we find that our investment replace them with investment managers integrated climate risk, we will look to investment strategies and how they have able to robustly and credibly explain their holding. able tojustifyanyclimate controversial reduced climateexposures andtobe managers tohave portfolioswithmaterially this does notmeanwedoexpect managers toexclude certain stocks, while However, investment priority. a technical operational matter not an they are invested – climate becomes drive change in the companies in which their capacity on climate change or to compel investment managers to develop specific stocks from or sectors will not exclusions or requiringdivestment managers work. Simplystating to drive change in the way investment issue exclusion lists because we need greenhouse gas emissions. We will not investments in companies with higher entities they invest in, and to justify their critically about the companies and other will press them to think carefully and and climate change objectives. We that deliver on both our investment them to provide investment products If investment managers are not If investment managers are not we will notinstruct

Taking stock applied to companies. introduce specific exclusion criteria to be certain investment managers and/ or will consider whether we should remove transition to a 2°C or below economy), we are on a trajectory to be aligned with the climate change so that these companies real change in corporate strategies on ineffective (i.e. these efforts do not deliver action on climate change. regulation and escalation of government for what we see as the tightening of and investment reviews, help us prepare ahead of our Clients’ triennial valuation and to ramp up our ambitions. It will also, opportunity to reflect on our progress will provide us and our Clients with the stocktake of this policy. This stocktake In late 2022, we will conduct a full reviewed annually. effectiveness and the policy itself will be and report on its implementation and three years. We will regularly monitor work on climate change over the next Our Climate Change Policy will guide our • • • • • • expect that the stocktake will consider: stocktake with Clients during 2020. We We will develop the framework for the financial risks? and present climate-related effectively to robust stewardship who have not responded Are there companies or managers for companies? selective divestment requirements managers and/or introduce need to change our investment managers been effective or dowe to engage with our investment In particular, has our decision elements of ourstrategy been? How effective have the key revised? or does it need to be substantially Is this policy still fit for purpose so, what does it tell us? and financial and if performance,  Have we been able to link carbon we delivered? mitigation and adaptation – have What – in outcomes terms of set for ourselves? the objectives and targets we have How have against we performed to climate risk. strategies, and ultimately their exposure allocation and setting their investment responsibility for strategic asset (as administering authorities) retain They also recognise that our Clients long-term interests of their members. on their fiduciary duty to act in the best they enable each of ourClients to deliver of an organisation of oursize. In turn, commensurate with the expectations support ourinvestment strategy and be with relevant regulations and policies, basis, clearly demonstrate compliance Partnership will operate on a day to day to capture the ambitions of howthe Our Investment Principles are designed Investment Principles. describe how these align with our change below. In Appendix 1, we We set out ourcorebeliefs on climate Investment Principles our Our climatechangebeliefsand

pre-industrial levels. be kept towellbelow 2°C compared to world where temperature rise needs to industry sothatitisfitfor purposefora systematically change the investment key objective ofourclimate policyisto the market, we therefore believe that Given our strengths and our position in • • • We believe that: central to this change. Clients (and other investors) is equipping empowering and our the investment industry, and requires carbon future by 2050 (or before) For society to achieve a net zero interests of ourClients. is aligned with the best long-term returns long-term financial consistent with temperature increase is entirely goals that goals deliverabelow2 Investing to support the all portfolios. Clients, their beneficiaries and planet, and therefore will impact our every economy and country on the societal and financial stability of and material risk to the ecological, Climate change presents a systemic change in securing Paris

systemic systemic and

o C the the

Appendix 7 - Brunel Climate Change Policy | 164 Appendix 7 - Brunel Climate Change Policy | 165 • • • • • significant difference. These are: and where we believe we can make a believe there is a critical need for action has led us to identify five areas where we role within that market and that system, and of the investment system, and of our Our analysis of the investment market on this leadership role. mean that we are well positioned to take capacities, resources and networks, of action; our ownskills, record scale within the UK market;ourtrack action on climate change; ourrelative Clients with a strong commitment to We also believe that our circumstances: change across the investment industry. that we need to focus on delivering we need to do muchmore.We believe urgency ofclimate change means that practices and the processes. However, integrating climate change into our own We have made significant progress on future system which is fitforalowcarbon plan tobuildafinancial A five-point Persuasion Positive Impact Portfolios Products Policy incentives, disclosure expectations – Public policy – regulation, economic Why: Our analysis impacts ofclimate change. effective adaptationtothe unavoidable the lowcarboneconomy,andenable emissions, accelerate progress towards significant reductions ingreenhouse gas policy frameworks.These need todeliver comprehensive androbustclimate change We wantpolicymakerstoestablish Policy to emissions mitigation and enabling in frameworks, particular in relation comprehensive climate change policy in encouraging governments to establish Investors have been an important voice for the deployment of renewable energy. for electrical equipment, and incentives the transport sector, efficiencystandards sector, vehicle emission standards in emissions trading in the electricity over the past decade. Examples include seen significant progress in many areas companies and for investors. We have establishes the rules of engagement for

• • three priority areas for action: medium term,webelieve that there are in policy framework place. In the short to to be a comprehensive climate change needed before we can consider there that, despite progress, muchmoreis Our analysis of the policy landscape is climate risks in such investments. which draw outand make explicit the of particular investments, and policies policies that change the economics investments at scale. These include policies which have the ability to shift the low carbontransition. We need consistency, comparability and with companies is limited by the making and our engagement investment research and decision- integrate climate change into our for companies. Our ability to fully change disclosure requirements Introducing mandatory climate the Paris Agreement. need if we are to meet the goals of deliver the emissions reductions we sufficiently high level time over – to be sufficiently high – orreacha This economy. price needs to methane) across the global on carbon (and equivalents e.g. Establishing a meaningful price commitment to directly participate in makers. This includes continued our with policy through directcommunication therefore expect to deliver our objectives work with our Clients and others. We influencing public policy requires us to We recognise that changing or a groups. We are committed to supporting of energy,in particular forvulnerable access to energy and on the affordability including the impacts on employment, on account ofthe impacts on society, ensure that policy interventions take Across all of these areas, we need to • Just Transition fossil fuel subsidies. accessing the electricity grid and money, barriers to renewable energy project developers to borrow expensive for renewable energy requirements which make it more include bank provisioning regulatory landscape. Examples elsewhere emerge from in the progress. These are barriers that Addressing regulatory barriers to strategy and capital investment. opportunities in discussions around climate change-related risks and and by the lack of attention paid to quality of the data they provide 1 . • we will focus particularattention on: change Within policy frameworks. this, comprehensive and robust climate encouraging policymakers to establish We will play an active and leading role in Our PolicyAdvocacyobjectives: 2020-2022 Authority Pension Fund (LAPFF). Forum Investment (UKSIF) Forum and the Local Institute, the Sustainable Finance and (PRI) and, in the UK, Green Finance Principles for Responsible Investment Group on Climate Change (IIGCC), the Initiative (TPI), Institutional Investors in particular the Transition Pathway of investor collaborative initiatives, where appropriate provide leadership, We will also actively participate and, to be addressed. awareness and demand for these issues and educational opportunities to raise will also take advantage of speaking actively seeking investor expertise. We to get involved where policymakers are We will also encourage other investors technical advisory and working groups. major sectors of the economy). time and widespread (i.e. applies to all and rate required), progressive over sufficient to drive change at the scale on carbon, which is material (i.e. The adoption of a meaningful price

Appendix 7 - Brunel Climate Change Policy | 166 Appendix 7 - Brunel Climate Change Policy | 167 2 1

with climate-sensitive responsibilities are taking appropriate action to adapt to the impacts of climate change. The Adaptation Reporting Power (ARP) is an important aspect of the Climate Change Act 2008. The ARP aims to ensure that organisations of a public nature The Just Transition means managing both the positive and negative social and employment implications of climate action across the whole economy • • • • • and adapt to a changing climate. reduce greenhouse gas emissions Transition’) when taking action to community interests (the ‘Just due of workers’ account rights and is socially sustainable and takes Ensuring that climate change policy regulatory bodies. of prudential regulators and other oversight and control processes into the mandates and into the The integration of climate change the Adaptation Reporting Power2. to mitigate climate risk and under effective in implementation of plans regulators in being ambitious and support financial policy makers and regulatory barriers to progress and The of or correction removal activities and sectors. the high move awayfrom impact technologies – technologies, support forlowcarbon limitations on high carbon – forexample, product standards, The introduction of policy measures The of fossil removal fuel subsidies. that accelerate benefits. that deliver substantialclimatechange the Clients and wider investment market to our available range products of We want toincreasethe number and Products auditors. consultants, actuaries, lawyers and include, but are not limited to, investment of investors and companies. These are critical influencers in the action standards of those intermediaries who skills, knowledge and professional We will support the development of companies and their investors face. a clear articulation of the risks that useful information and encouraging with a focus on providing clear, decision disclosure requirements for companies, introduce mandatory climate change We will encourage policy makers to particular focuson the UK post Brexit. bilateral trading with frameworks, a climate change into multilateral and encouraging policymakers to integrate We will play an active leading role in products we want to invest in. managers to innovate and to supply the and encouragement to investment other obligations – provide incentives want, and – subject to our fiduciaryand requires us to be clear about what we to support productdevelopment. This or at least a potential market, in order managers must see there is demand, This is also true of supply; investment deliberately encouraged and stimulated. happen automatically, it needs to be We recognise that innovation does not climate-oriented products. development and build the supply of need to encourage innovation in product return characteristics). There is a clear requirements (e.g. appropriate risk- socially responsible) and our investment objectives impactful, (e.g. lowcarbon, products that meet our climate change there is a limited supply of investment One of the key challenges we faceis that Why: Our analysis available through a publicly-available results of TPI analysis are made provided by FTSE Russell, and the TPI uses information sourced and • • in low-carbon economy two areas: preparedness for the transition to the TPI assesses companies’ Commissioners and CBF Funds). England Pensions Board, the Church National Investing Bodies (Church of Fund and the Church ofEngland Environment AgencyPension as a joint initiative between the In 2017, the TPI was established Initiative (TPI) About the Transition Pathway Agreement. pledges made as part of the Paris international targets and national to compares carbon performance planned or expected future evaluates how companies’ TPI Carbon performance: carbon transition. opportunities related to the low gas emissions and of risks and management of their greenhouse the quality of companies’ evaluates and tracks Management quality: TPI • and We will: monitoring framework. integral part of ourproductgovernance We will ensure that climate risk is an 2020-2022 Our ProductGovernanceobjectives: tracking managers’ holdings. engagement with companies and investment research, informing their of ways, including informing their using the tool and its data in a range These investors have committed to have pledged support forthe TPI. under management and advice over $18 trillion combined assets 60 investors globally representing As at December 2019, over climate corporate action benchmark. TPI is rapidly becoming the ‘go-to’ and Political Science (LSE). at the London School ofEconomics Climate Change and the Environment the Grantham Research Institute on tool hosted by its academic partner, excessively high. or negative climate impact is products whose carbon footprint Work with Clients to avoid launching into all the mandates that we award. change considerations are integrated We will continue to ensure that climate associated with these issues. related risks and opportunities explain how wemanage the investment- adaptation – of ourportfolios and will – both performance mitigation and We will report on the climate change • • • expectations. that meet these objectives and we will offer a range of products change-related risk tolerances, and outcomes, establish their climate their climate change objectives and Work with our Clients to establish degrees transition study below. stocktake and the results of the 2 target will be reviewed as part of the seeking to improve) by 2022. This the benchmark (which we are also 20% lower carbonintensity than on year. This will equate to over an improvement of at least 7% year Seek, in our listed equity portfolios, improving. and that our productsare steadily the benchmark as soon as practical climate risk profiles are better than Seek to ensure our portfolios’

Appendix 7 - Brunel Climate Change Policy | 168 Appendix 7 - Brunel Climate Change Policy | 169 benchmarks play in driving investment We will explore the role that investment report on our portfolio performance. – effortsthat enable us to assess and support, through piloting methodologies – through the provision of financial We will therefore prioritise supporting are under frameworks development. is an area where methodologies and reference targets (e.g. 1.5 °C, net zero) goals of the Paris Agreement or other and portfolios are aligned with the assessment of whether funds commitment, werecognise that the that would be required. In making this as to the adjustments to specifications alignment and engage with our Clients the actions needed to bring them into portfolios are not aligned, wewill identify are, at least, 2 °C aligned. If these portfolios, and possibly other portfolios, degree to which our main listed equity By 2022 we will have assessed the products. needs and that there is demand for these to ensure that these products meet their industry on delivery, and with our Clients We will do this through working with the climate change risks in all asset classes. opportunities which help further address We will identify and develop new product

and challengerigorously our investment requires us to assertively, consistently of and are acting on these changes. This and our investment managers are aware changing. We need to ensure that we the financial implications is constantly of the science, of the policy goals and of perspective. Our understanding a dynamic issue an from investment We recognise that climate change is Why: Our analysis processes. further develop our improve and to workwith and ourmanagers to practices onclimateriskmanagement adaptation). We best want toadopt (both mitigationand change scenarios be resilient under a range climate of We to want ourinvestment portfolios Portfolios our performance in our performance a more holistic way. for to frameworks assess and manage benchmarks and proposing alternative a paper discussing the issues with aligned In world. 2020, we will publish benchmarks more compatible with a 2°C will press the industry to make the core change mitigation and adaptation. We meaningful contribution to climate ability to invest in areas that make a decisions and in constraining our processes. We will expect them to in their investment practices and assessment of change-related risks managers on their analysis and continuously challenge our investment We will rigorously, assertively and 2020-2022 Management objectives: Our Portfolio are able to do so in a timely manner. arise and that, if we need to intervene, we can benefit from the opportunities that consequence of climate change, that they are reasonably resilient to the downside future proof our portfolios so that they We also, to the extent possible, need to their approach to climate change. managers and other service providers on actors can also challenge their investment Clients and other investment system expertise and experience so that our aware of our position. We will share our potential new investment managers are to the wider investment market so that managers. We will explain our approach dialogue with our existing investment These efforts are not confined to our decisions that they are making. to explain and justify the investment investment processes and expect them managers on all aspects of their Paris Agreement. mandates align with the goals of the We will assess how ourportfolios and 2020 onwards. methodologies we have access to, from stress tests of portfolios, using the best adaptation. We will conduct our own of our mandates, on both mitigation and risk stress-testing and risk management to develop methodologies for climate and with others in the investment industry We will work with our investment managers managers. and reappointment investment of our management, selection, appointment these improvements in our monitoring, processes, and will explicitly consider continually theseimprove practices and adaptation, through investing support the low carbontransition and We recognise that we can directly Why: Our analysis climate change. impacts of to the unavoidable effective adaptation that and enable transition low carbon that directly supportthe activities We want toenable investments in Positive Impact corporate disclosures. corporate to reduce them as part of ourwider impacts and the steps we have taken offsets. We will report on our principal mitigated, we will consider the use of technology. Where impacts cannot be and services, travel choices and use of this through of goods our procurement our ownclimate impacts. We will do by example and take steps to reduce are not as material, we believe in leading Whilst our direct operational impacts are interconnective. recognise that issues and opportunities change. Our investment strategies can have positive impacts on climate to finance, education and new markets female empowerment through access For example, investments that support Sustainable Development Goals (SDGs). and support of the United Nations commitment to invest for positive impact carbon transition are part of a wider Our investments supporting the low investments in these areas. can encourage others to increase their experiences and our successes, we recognise that, through sharing our adaptation and resilience. We also renewable energy, energy efficiency, in opportunities in areas such as

corporate disclosures. corporate to reduce them as part of wider impacts and the steps we have taken We will report on our principal adaptation. to, the low carbontransition and to our portfolios invested in, orexposed will also report on the proportion of benefits of these investments. We the wider social and environmental their financial and performance, climate mitigation and adaptation, we have made, their contribution to We will report on the investments that transition. investment in the low carbon investment needs for capital makes to the overall global level of ourClients’ contribution We will seek to establish what the to the energy transition. opportunities that directly contribute investments in a diverse set of We will continue to make significant 2020-2022 Our Positive Impact objectives:

Appendix 7 - Brunel Climate Change Policy | 170 Appendix 7 - Brunel Climate Change Policy | 171 • • of these high-level questions: evidence that supports answers to each Through engagement we are seeking Our questions specific asset class and strategy. it is effective and meets the needs of the portfolios but will be adapted to ensure climate stewardship extends to all our and adapt for climate resilience. Our action on climate change, both to mitigate companies and other entities to take Clients – have the ability to encourage As a large investor, we – on behalf of our Our analysis climate change. impacts of they are resilient to the unavoidable and toensure economy, carbon that with to supportthe transition tothe low entities in whichwecontract invest and We want the other companies and Persuasion model, asset portfolio or investment How are you adapting your business increase to well below 2°C? efforts to keep global temperature zero carbon future and of supporting with the goals of achieving a net- asset portfolio or investment approach How aligned is your business model, In listed equities, engagement goes impacts of climate change on them. their impacts on climate change and the projects and other entities in managing companies, real estate, infrastructure our general partners to support private stronger in private markets, working with Engagement impact can be even investments. for engagement in other fixed income and we will explore the possibilities to our approachin bonds corporate mitigation and resilience will be central Engagement with issuers on climate engagement Some comments onassetclass-specific • • increase to well below 2°C? and of keeping global temperature achieving a net-zero future carbon approach to align with the goals of Financial Disclosure (TCFD)? with Taskforce on Climate-related opportunities? Will you report in line climate-related financial risks and Are youfully transparent on your different climate scenarios? the impacts of climate change and approach to ensure resilience to model, asset portfolio or investment How are you adapting your business companies who provide other sources the but low carboneconomy also those are adapting their business models for gas, transport, mining and electricity – companies in sectors such as oil and on climate change – these include how companies with the biggest impact should not only focus ourefforts on On climate mitigation we believe we such as Climate Action 100+ (CA100+). collaborative action though initiatives and we will continue to support with others increases effectiveness our to effect change. Working collaboratively exposure and where we have the ability or risks, where we have a significant biggest climate change-related impacts companies or other entities with the We prioritise engagement with those message to company management. investor voices can send a strong, clear of investors, and how an alignment of We also recognise the collective power Meetings). the right to call Extraordinary General shareholdings, file resolutions and even specifically the right to vote on our formal rights granted to us as investors, companies to include the use of the beyond the process of dialogue with assess risks. behaviours and supports our capacityto that framework incentivises the right investors to create an engagement developed and we will work with other Engaging on climate resilience is less engagement. and to track the effectiveness of this to both identify engagement priorities initiatives such as CA100+ now use TPI the Paris Agreement. Collaborative and national pledges made as part of compares to international targets expected future carbonperformance greenhouse emissions, and how their impact companies are managing their which assesses how some 400 high growing the Transition Pathway Initiative We have played a leading role in innovations). mortgages and loans to support other and wider society (provision of green supporting new fossil fuel extraction) lending policies to companies (not in changing behaviour. Forexample, sector as being particularly important influencing policies within the banking of capital to these entities. We see • • • our engagement with companies. We will: climate change outcomes and impacts in Initiative (TPI), strengthen our focus on We will, using the Transition Pathway Our Persuasionobjectives:2020-2022 companies e.g. through facilitating Support Client engagement with regularly updated. our Stewardship Policy, which itself is change. We provide further detail in we will aim to stimulate more rapid In some sectors, e.g. oil and gas, with a 2 degree or below pathway. meaningful progress to alignment TPI Level 4 by 2022 and having made of all our material holdings being on increase over time with the aspiration expectations. These expectations will have not met our climate disclosure to other board members where they against the reappointment of the Chair from our current policy where we vote We will escalate our voting activity Align our voting with our engagement. portfolios in 2021. engagement to bond our corporate annual basis. We will extend this We will report on progress on an TPI management quality framework. one level (up to 4*) per year on the persuade them to advance at least Engage with our material holdings to • investors we will: Working collaboratively with other greenhouse gas emissions. in supply chain and product-related and delivering substantial reductions sectoral efforts focused on defining We will facilitate and support cross- together to develop and deploy solutions. across a range of sectors to work requires investors and companies chain and product-related emissions We recognise that addressing supply private equity investments. develop appropriate metrics for our (GPs) and other industry players to need to work with General Partners investment managers, and we will expectations of ourreal estate Benchmark (GRESB) to frame our use Global Real Estate Sustainability are invested. We expect that we will the other asset classes in which we Establish engagement objectives for of individual performance entities. information about the climate through providing them with with other institutional investors, collective engagement with us and facilitating their participation in their attendance at AGMs, through

Appendix 7 - Brunel Climate Change Policy | 172 Appendix 7 - Brunel Climate Change Policy | 173 and further insights into our approach. route forproviding additional information We will use our website as the primary this policy. against the commitments set out in We will report annually on our progress Reporting on progress • • • progress against this framework. 2020. We will then publish our our capacity to assess risks during the right behaviours and supports climate resilience that incentivises an engagement for framework Work with other investors to create support us. and through encouraging others to communicating ourvoting intentions such as CA100+), through clearly collaborative engagement initiatives with others (e.g. through formal Amplify ourefforts through working impacts of climate change. adaptation to the unavoidable economy orthat prevents effective the transition to the low carbon particular lobbying that undermines approach to public policy lobbying, in Challenge companies on their

• • • entities in our specific portfolios): to the asset classes and companies/ provide. These include (as relevant data and indicators that we currently most cases, add these metrics to the Our expectation is that we will, in future reporting. using the metrics in our recommendations and, once finalised, We are committed to both piloting the expected to be completed in 2020. below 2 °C. Both of these projects are keeping global temperature rise of a net zero carbon future and of portfolios compare to the goals and comparable manner, how their managers to explain, in a consistent allow asset owners and investment which will propose new metrics that project on Paris-aligned Portfolios – project on adaptation and the IIGCC of programmes – notably the IIGCC rapidly. We are involved in a number Reporting is an area that is evolving renewable energy). invested in areas such as the of ourportfolios proportion Green and brown share (i.e. Fossil fuel exposures. footprints. Carbon

The best practice standards. Brunel’s own operations meet or exceed across the whole organisation, ensuring for ensuring effective implementation The Responsible Investment Officer to day basis is held by the Operational accountability on a day Climate Change Strategy and Policy. collectively accountable forBrunel’s The Our governance of climatechange of climate change into the portfolio responsible for ensuring the integration relevant disclosure frameworks. TCFD recommendations and other and to align this reporting with the by climate mitigation and adaptation, the risks and opportunities presented overall exposure of ourportfolios to We will continue to report on the • • is responsible Chief Executive Officer is responsible Chief Investment Officer Brunel approvesand Board is activities. Our engagement and voting frameworks. performance management quality and carbon Transition Pathway Initiative against Performance the Chief is . construction, implementation and It is expected that the policy will Appendix 1: Our Investment overall investment decision making. develop over time, given the fast- Principles and climate change All members of the investment changing nature of the climate debate. What this means in practice for our work team have explicit responsibility for Relatively minor changes to the policy, on climate change the implementation of responsible including clarifications and more investment within their respective roles. specific targets or updates to reflect market developments, can be approved Principle 1: Long-term investors The climate change strategy and policy by the Brunel Executive Committee. We recognise that climate change may have been developed in conjunction with More substantive changes will require affect our portfolios, the sustainability and key stakeholders, including the Brunel approval by the whole Board, after Client resilience of the financial system, and the Oversight Board, Brunel Client Group, and consultation if appropriate. sustainability and health of our economy, the Client Responsible Investment Working our society and the natural environment, Group, membership of which includes Disclaimer over the short, medium and long-term. representatives from the administering This content is produced by the Brunel Pension authorities it serves and Brunel staff. Partnership Limited. It is for the exclusive As such, climate change – mitigation use of the recipient and is neither directed to, nor intended for distribution or use by, any and adaptation - is relevant to all our This policy relates and interacts with person or entity who is a citizen or resident investments, in all asset classes and of or located in any locality, state, country or other Brunel Policies, including but not in all geographies. Climate change is a Appendix 7 - Brunel Climate Change Policy | 174 limited to: Responsible Investment, jurisdiction where distribution, publication, availability or use of this document would be source of downside investment risk and Stewardship, Risk Management, contrary to law or regulation. of upside opportunity. Product Governance, Manager Selection and Manager Monitoring. This content is provided for information Principle 2: Responsible Investors purposes only and is Brunel’s current view, which may be subject to change. This In the medium and long-term we will Progress and compliance is monitored document does not constitute an offer or a deliver sustainable investment returns by all the groups outlined above. recommendation to buy or sell securities or by investing in companies and assets Climate change forms part of Brunel’s financial instruments. It is designed for the use that effectively manage the risks and overall business risk and as such of professional investors and their advisors. It is also not intended to be a substitute for opportunities presented by climate change. will be monitored by Audit, Risk and professional financial advice – specific advice Compliance Committee. This policy should be taken when dealing with specific Principle 3: Best Practice Governance was approved by the Board on the situations. Past performance is not a guide to We allocate clear responsibilities 9th January 2020, after extensive future performance. and accountabilities for the oversight consultation with Clients and other Authorised and regulated by the Financial and implementation of this climate stakeholders. Conduct Authority No. 790168 change policy. We integrate climate Appendix 7 - Brunel Climate Change Policy | 175 pools and the market to create cost We work and innovate with other funds, Principle 6:Leadership innovation and investment professionals, and our peers. climate change academic research, from policy and the investment implications of our understanding of the science, the We continually learn and reappraise heart investments of research Principle 5:Evidenceand at the of climate economics change. to date with the science, the policy and community toensure that we are fully up within and outside the investment We engage regularly with experts both climate related issues. continuing professional development on We support ourClients’ training and our practices,processes and decisions. climate change are fully integrated into We ensure that our Clients’ views on committees and experts knowledgeable officers and informed through Principle 4:Decisions implementation of this policy. effective monitoring and review ofthe remuneration processes, and through change into our appraisal and and other entities in which they invest to influence to encourage the companies use their formal rights and informal We require ourasset managers to Principle 9:Responsible stewardship change. demands effective action on climate growth ofthe This, economy. in turn, depends substantially on the sustainable investors, investmentour success We recognise that, as long-term Principle 8:Fullriskevaluation short, medium and long-term. return objectives of the fund, overthe these investments meet the risk and investment opportunities, we ensure that When evaluating climate change-related Principle 7:Right risk forright return they invest. companies and other entities in which and to constructively engage with the risks and opportunities in their portfolios, effectively manage the climate-related and offer new investment solutions, to aspire to work with us, to innovate that work with us, and those that might We encourage those asset managers and its funds. effective solutions needed by the pool set out in this policy. We report annually on the commitments accountable Principle 11:Betransparent and impact. the innovations we catalyse have real that investments that we make and costs we pay,and also to ensuring that scale is critical to reducing the principles collectively. We recognise objectives and implementing these solutions to achieving funds’ our We seek the most cost-effective effective solutions Principle 10:Cost and CDP. Principles for Responsible Investment Investors on Group Climate Change, the Pathway Initiative, the Institutional in initiatives such as the Transition example, we are leading participants to work collaboratively with others. For investment community, and always look voice on climate change in the broader We work as a collective responsible long-term. sustainable financial returns over the central part of howthey generate presented by climate change, as a the business risks and opportunities take a to proactive approach managing unavoidable impacts of climate change. transition and effective adaptation to the and financing both the low carbon system are explicitly focused on enabling that public policy and the investment We also work with others to ensure expertise on climate change. investment industry’s capacity and and the market to build the wider We collaborate with other funds, pools Principle 12:Collaborate Investment Principles. have against performed each of our including an assessment of howwe implementation of this policy in 2022, We will formally reviewthe [email protected] and so on), should contact us at (updates, newsletters, brochures meeting requests and other materials Fund managers with general enquiries, [email protected]. Investment Officer, at email Faith Ward, Chief Responsible comments aboutthis policy, please If you have any questions or in touch Getting [email protected]

or

Appendix 7 - Brunel Climate Change Policy | 176 Appendix 8 - Voting Issues Policy | 177 1.1 31 March 2020 Summary Voting forthe of year ended governance and proxy voting. industry leader in the field of corporate years of experience and is a recognised investors worldwide. ISS has close to 30 management solutions, to institutional and leading compliance and risk and end-to-end proxy voting platform governance research services, including vote recommendations and related is the provision of proxyresearch, Services (ISS). ISS’s core business proxy voting to Institutional Shareholder Dorset County Council has outsourced Voting Issues Policy Appendix 8 equities managers. and Wellington, the Fund’s global 2018), Investec (to November 2019) equity portfolio and by Allianz (to July services are provided by ISS for the UK the voting process Proxy Voting page 178 of this report. To manage November 2011, and is included on was reviewed and adopted on 24 on Corporate Governance, which policy and the Combined Code Association of Pension Fund’s (NAPF) voting policy is based on the National The Dorset County Pension Fund’s 1.3 1.2

Corporate Governance. complies with the Combined Code on acquisitions and reporting. Each policy of capital, remuneration, mergers and strategy, integrity, management, use a number of areas which include interest, setting out voting policy in These seek to protect shareholder manager have been obtained. and Voting Policies for each pooled manager. Corporate Governance the voting policies of each individual in Pooled Funds and are subject to 2020) in emerging markets, are held the UK, and JPMorgan (to December (to November 2018) and Schroders in equities managed by AXA Framlington 2019) and Wellington. However, the (to July 2018), Investec (to November Manager (to July 2018), Allianz segregated accounts by the Internal applies to those assets managed in The Voting Policy of the Dorset Fund from the LAPFF. information which may be received any decision made by ISS in light of responsibility. It is possible to override of corporate governance, and social (LAPFF) which researches into areas Local Authority Pension Fund Forum The Fund is also a member of the

1.4

included on page 179 to this report. issues, and details of responses are other investors in respect of these whether they were collaborating with addressed. They were also asked shares, and how these concerns were companies in which the fund held in which they had concerns about year 2019-20, examples of instances for details of voting activity in the Each pooled manager was asked Voting Issues Policy

Issue Action for non compliance Leadership 1. The roles of Chairman of the Board and Chief Executive should be Vote against the separate to avoid undue concentration of power. re-appointments as appropriate.

Effectiveness 2. All directors should be subject to re-election every three years. Vote against the acceptance of accounts.

3. Audit Committee should consist of at least three non-executive Vote against the directors. acceptance of accounts. Appendix 8 - Voting Issues Policy | 178 Accountability 4. If a proposed dividend is not covered by earnings and there is no clear Vote against the justification for the long term benefit of the company. acceptance of accounts. 5. The company should comply with the UK Corporate Governance Vote against the Code and stock exchange listing requirements. acceptance of accounts. Remuneration 6. Remuneration committees should comprise only of non-executive Vote against director’s directors. appointment. 7. Bonus and incentive schemes must have realistic performance Vote against director’s targets. appointment. 8. Service contracts should be one year rolling unless the Vote against director’s Remuneration Committee is able to justify longer periods. appointment. Relations with Shareholders 9. Changes to the articles of association should not adversely affect Vote against the existing shareholders rights. resolutions. Other 10. Uncontroversial issues. Vote for the resolutions. Appendix 8 - Voting Issues Policy | 179 31 March 2020). the from past 12 months (1 April 2019 to below three examples of engagements long-term shareholder value. Please find management that are fully aligned with to create long-term incentives for continuously consider new approaches looks set to continue, and they on the agenda. Debate in these areas decide to vote against certain resolutions are not open to changes, Schroders may a company’s AGM. Where companies often paving a smoother path towards results in changes before their vote, votes; in many cases, such dialogue engage with companies ahead of our Schroders say that their policy is to health and safety, and renumeration. changes in management, performance, companies concerning matters such as companies. Schrodersengage with Report summarising contact with Governance, Voting, and Stewardship Schroders issue a quarterly Corporate Summary ofEngagement Schroders Fund Managers Summary Engagement of by Pooled continue to engage with the group. position is rather less supportable. We With the advent of COVID-19, that find some sympathy with that position. in calm waters then perhaps we could little time. We pointed out if all three are companies was a REIT which took very our position. He observed that one of the with him and the senior NED explaining AGM and then we engaged constructively against his reappointment at the group’s hold no more than two chairs. We voted and our policyis that a person should Sirius also chairs two other plc boards Sirius RealEstate. on much firmer foundations ever since. the CFO to the CEO role. The group has been along and we supported the appointment of execution. Another profit warning came clarity of strategic purpose and tactical listed entity where he had shown great known and respected at a previous publicly finding a new finance director who we had mixed at best. The group was fortunate in engineering, progress was slow and often challenging areas of geomechanical of pursuing excellence in technically we supported the publicly stated aims geographical regions of the group. Whilst operational underperformance in various the board following a sustained period of Keller. We engaged with the chairman of The chairman of vigorous corrective plan.vigorous corrective her strategic review and implemented a sheet once the new CEO had completed its fund raising to stabilise the balance new CEO. We supported the group in to the CEO role. We helped to find a standing CFO who had been elevated saw the departure summary ofthe long found in its inventory of c.£40m.This when an accounting misstatement was was again knocked down to the canvas hugging and soon afterwards the group following allegations of inappropriate Kelvin, was obliged to leave the company difficulties. The CEO and founder, Ray the board to find a route out of its constructively with the non-execs on understatement but we have engaged organisation has been in the wars is an Ted Baker. To say that this Appendix 9 • • • • those risks are; identified and actions taken to mitigate administration and governance. Key risks annually in regard to the scheme A Risk Register is compiled and reviewed reported at each quarterly meeting. annually, and new or changed risks are is reviewed by the Pensions Committee associated with managing the Fund. This risk register which identifies the major risks Pension Fund. The Pension Fund has a is an integral element of managing the responding to them. Risk management most effective methods of controlling or and potential impact and determining the identifying risks, evaluating their likelihood Risk management is the process of Management Risk qualifications. and skills – training programme and Administration staff – knowledge Skills – Training log and programme; Local Pension Board – Knowledge and Quality and Improvement plan in place; Data Quality (administration) – Data place to cover this by Dorset Council; department is covered by the policies in – Compulsory annual training, the (administration staff and systems) Data Protection & Cyber Security Pension Fund Risk Register Pension FundRisk c) b) a) it has in place to control key risks are summarised below under the following headings: The following table highlights the key risks and how they are managed. The measures that same principle applying to the middle row). controls identified, it should be recorded as “High”. If less than 20% it would dropto medium (with the If there is a 20% chance or moreof any of the impacts in the based top row occurring on the current In using this matrix, you should consider the extent of impact acrosseach of the 5 impact headings. i.e. Low chance of: than 20% i.e. a greater Medium chance of: than 20% i.e. a greater High Other Risks. Workforce Risks; and Financial Risks; minor impact Negligible / contained but can be the short-term period or in single financial impact in a Reasonable Fund survival of the weaken the seriously damage or cause significant Potential to Financial priority on a strategic or negative) impact (positive negligible Minor/ priority) on a strategic or negative impact (positive Moderate priority) a strategic negative on (positive or Major impact Opportunities Priorities and Strategic treatment) intervention or minimal (requiring injury/illness for minor Potential incidents) reportable other RIDDOR (including injury or illness Moderate / disability) term incapacity illness (long major injury/ Fatality or Safety Health and rumours complaints or ward) / minor (affecting one public memory term impact on Short tomedium than one ward) (affecting more public memory impact on medium term Short to attention term media Sustained/long Reputational service delivery disruption to Minor three) services (level deliver critical Unable to one and two) services (levels deliver critical Unable to Service Criticality of

Appendix 9 - Risk Management | 180 Appendix 9 - Risk Management | 181 the fund chooses to exit a large surplus An employer with A03 unviable financially may become admission body the Fund as an admitted to A company A02 misappropriation through fraud or Loss of funds A01 A) Financial Risks Risk Description Open Open Open Closed or Open Status Risk Administrator Fund Administrator Fund Administrator Fund Risk Lead Oct-11 Oct-11 Oct-11 Identified Date Not able to control reviwed periodically. of the contract and is bond is set at the start losses. The value of this any potential costs and authority. This covers the outsourcing guarantor, forexample or have a financial have a Bond in place, to the Fund if they will only be admitted An Admission Body procedures Committee; policies and to Audit & Scrutiny monitoring; reporting control; reporting and level of internal provide appropriate that current systems Audit; Assurance Internal and External risk? manage this How do we currently Controls Current Low Low Low Low Medium / High / Risk Current N/A No Change No Change / No Change Deteriorating Improving / Review Since Last Movement Yes Yes Yes controls current on the No, based Yes or i.e. acceptable? level ofrisk current Is the N/A notes See COVID-19 of funds. misappropriation against fraud or protections require revised of BPP will establishment The Last Review? Since Highlight to Any Issues actions needed. to this and any Actuaries in regard continue with our Discussions 2020. take placesummer review to Bond now to address this. that can be done there may be little this affects, though many employers looking at how We are currently or Bonds in place. financial guarantees may not have the Fund historically admitted to the Admission bodies potential exposures. Continual review of of risk acceptable level achieve an identified to actions Further On-going On-going On-going actions further for Date Target N/A this is likely. yet none have indicated that COVID-19 measures, but as administration as a result of employers may gointo It is possible that some N/A COVID-19 Notes and staff capacity between workload the balance Failure to maintain B03 duties effectively. undertake their trained to are appropriately Board members members and Committee to ensure that a requirement staff. There is also suitably skilled develop and retain Failure to recruit, B02 of staff Health and safety B01 B) Workforce Risks Risk Description Open Open Open Closed or Open Status Risk Administrator Fund Administrator Fund Administrator Fund Risk Lead Oct-11 Oct-11 Oct-11 Identified Date Fund Administrator approval ofthe Pension are identified, at the capacity demands where particular pension from fund posts can be funded within teams; additional review ofworkloads PDR process; continual Service planning and staff re. investments. against the loss of key greater resilience BPP should ensure The establishment of PDR; structure review Development / Training; Access to Management policies DCC health & safety absence management; trigger interviews; assessments; PDR Work station risk? manage this How do we currently Controls Current Low Low Low Low Medium / High / Risk Current No Change No Change No Change / No Change Deteriorating Improving / Review Since Last Movement Yes Yes Yes controls current on the No, based Yes or i.e. acceptable? level ofrisk current Is the notes See COVID-19 guidance. advice and with individual intranet, along on the DC available on being made information resources and wellbeing with employee invested in DC have also Last Review? Since Highlight to Any Issues stretched. where capacity is particular areas etc. to meet for secondments Review potential for key people risks resilience planning succession and Ensure appropriate of key people; in the absence have ability to cover and ensure staff Work shadowing identified via PDRs; appropriate and development, where Continued training / notes. Also see COVID-19 suspected. issues may be - particularly where with team members Managers to engage support available. all resources and made aware of Ensure staff are of risk acceptable level achieve an identified to actions Further On-going On-going actions further for Date Target 19 working restrictions. backlogs caused by COVID- required to address any resumes, action may be normal officeworking It is possible that once conferences and seminars. been set up in place of attend webinars that have members are encouaged to Board and Committee training has moved 'on-line'. is not currently possible, As attendance at events training Board COVID-19 Notes observed within the office. that social distancing can be Measures are being taken so working Office required. Workspace assesments engage with staff members. Managers encouraged to subjects via the DC intranet. provide resourses on these live alone) is an issue. DC (particularly those who The wellbeing of staff Homeworking

Appendix 9 - Risk Management | 182 Appendix 9 - Risk Management | 183 information / or personal confidential and to office and physical access Unrestricted C04 information. and/or personal confidential handling of management and Secure C03 service. perception of poor Poor services, or C02 building) or staff. facilities (IT; loss of Council service, due to a Inability to provide C01 Risks C) Other Risk Description Open Open Open Open Closed or Open Status Risk Manager Pensions Administrator Fund Administrator Fund Administrator Fund Risk Lead Jun-18 Oct-11 Oct-11 Oct-11 Identified Date breaches. mitigating risk of data staff therefore bookable by pensions the office is only be meeting within room walkthrough. The is not now a general The Pensions office portal to actuary email; secure payments secure corporately; guidance promoted Data awareness procedures reviews; processes and audit; internal audit PDR process; external Service planning and Altair in recovery place for for the team. Disaster contact numbers held home/ remotely; from can be accessed West Banking facilities critical services; Nat plans maintained for Business continuity risk? manage this How do we currently Controls Current Medium Medium Low Low Low Medium / High / Risk Current No-Change No Change No Change No Change / No Change Deteriorating Improving / Review Since Last Movement Yes Yes Yes Yes controls current on the No, based Yes or i.e. acceptable? level ofrisk current Is the notes See COVID-19 notes See COVID-19 Last Review? Since Highlight to Any Issues office. just turn up in the and can no longer arrange a meeting staff are required to DCPF advice from Members seeking on an annual basis. the GDPR training members undertake appropriate team Ensure all None plans. business continuity plans. Corporate business continuity Regular review of of risk acceptable level achieve an identified to actions Further On-going On-going actions further for Date Target N/A security in these instances. briefed on importance of leave the office. Staff confidential files have to Home workingmeans that should any delays occur. to regularly update members cases, staff are encouraged work. When dealing with impact on certain areas of and employers has had an Home workingforDCPF COVID-19 Notes less time critical matters. Some backlogs may arise in The focus is on priority work. Skype and Microsoft Teams. Staff meetings take place via limited (based on a rota). and access to the office is up forall staff members home workinghas been set virus within pensions staff, To avoid the spread of the

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November 2020