Annual Report 2018-2019 © Cover photos: Main image, Andy Harris - Weymouth Harbour

© Shutterstock - Left, Cerne Valley. Right, Gardens Information Other Scheme Administration Participating Employers ofthe Fund Scheme Benefits Scheme Membership The LGPS at a glance The Local Government Pension Scheme 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 Changes to the Fund in 2018-19 Key Financial Information Introduction Chairman’s Statement Introduction and Overview Contents

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Glossary of Terms Training Knowledge and Skills Material Other Brunel Costs and Savings Pools Asset Notes to the Accounts Net Assets Statement Account Fund Independent Auditors Report Pension Fund Accounts Local Pension Board Pension Fund Committee Governance as at 31 March 2016 IAS26 Report - Actuarial Valuation Actuarial Information

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Appendix 8 – Appendix 7 – Appendix 6 –  Appendix 5 –  Appendix 4 –  Appendix 3 –  Appendix 2 –  Appendix 1 –  Appendices Risk Management Voting Issues Policy Principles UK Stewardship Code Statement Communication Policy Statement Funding Strategy Strategy Report Pension Administration Statement Investment Strategy Compliance Statement Governance Policy and

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Contents | 2 Introduction and Overview pension scheme and its performance. general information regarding the twelve months, as well as providing issues affecting the Fund over the last the report is to highlight the important year ended 31 March 2019. The aim of Pension Fund’s Annual Report for the am pleased to present the County Committee for a fifth year in 2018-19, I As Chairman of the Pension Fund Introduction Statement Chairman’s to the pool’s management, representing approximately £800 million transferred managed by Brunel. This equates to transferred to portfolios developed and AXA Framlington were all successfully the UK active equities managed by under the management of Allianz, and for UKequities, the global equities the internally managed passive portfolio Partnership. Over the of the course year, the management of the Brunel Pension the transition of the Fund’s assets to Significant progress has been made for Brunel PensionPartnership such pools across England and Wales. Partnership, which itself is one of eight funds which formed the Brunel Pension The Dorset Fund is one of ten pension maintaining overall investment returns. efficiency and to reduce costs, whilst investments, in order to improve requirement forfunds to pool dominated by the Government’s For Dorset it has again been a year Pension Scheme (LGPS) nationally. change for the Local Government This is a period of unprecedented five years. 8.7% against the benchmark of 8.8% over benchmark of 10.8%, and an annualised years to March 2019, to compared the an annualised 10.6% over the three Over the longer term, the Fund returned response to market uncertainty. been purposely built up by the Fund in returns on cash balances that have investments to Brunel, and the low including the costs of transferring factors forthis underperformance, There were a number ofcontributing the combined benchmark return of 7.4%. 5.4% set by the Fund’s actuary, but below of 6.0% was above the discount rate of The Fund’s annual return on investments from £2.85 billion at the start of the year. just over £3.0 billion for the first time, up significant milestone by closing the year at The value of the Fund’s assets achieved a Performance Investment being fully operational. of £3.0 billion, in the first year of Brunel nearly 30% of the Fund’s total assets

Introduction and Overview | 4 and valued service to the Fund. of myself and the Committee, for his long would like to thank John again on behalf as Chairman. As I did at the meeting, I distinguished service, including ten years John Lofts after many years of February 2019 was the last for Councillor The meeting of the Committee in and Changes Staffing Committee and Officers representing the Fund. Fund’s the Actuary, Pensions Regulator attended and featured speakers the from in January 2019. The event was well held at Springfield House, Wareham The Annual Employers’ Conference was Annual EmployersMeeting specialist managers. through Brunel, as well as our existing more opportunities becoming available we However, are now starting to see infrastructure and private equity. market asset classes, namely property, target in the more illiquid private It continues to be a challenge to reach with further disinvestments in 2019/20. of disinvestments throughout the year, allocation of 45% there were a number equities back closer to the target In order to bring holdings in listed Allocation Strategic Asset Chairman Cllr John Beesley work throughout the year. investment management for all their hard in the administration of pensions and to all the staff who supportthe Fund year. My sincere thanks also extend commitment and support over the past members, and external advisers for their members, local pension board Peter my fellow Wharf, Committee like to thank the Vice-Chairman, Cllr those involved with the Fund. I would depends on the combined efforts of all The continued success of the Fund Thank You wish him all the very best for the future. hard work and devotion to the Fund and I would like to thank Richard for all his role after nearly five years in the position. Richard Bates, stepped his down from In March 2019, the Fund Administrator

Introduction and Overview | 5 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 Dorset County Council 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 separate reporting strands into one 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 external fund managers. 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

Introduction and Overview | 6 Key FinancialInformation • • • • • as at 31 March 2016, the funding level as at 31 March 2016, the funding level At the most recent actuarial valuation, 22,135. pensioners rose in 2018-19 by 4.3% to decrease of 3.1%, whilst the number of in 2017-18 to 25,068 in 2018-19, a the Fund fell from an adjusted 25,871 The number of active contributors in benchmark of 8.8%. the performance was 8.7% against a benchmark of 10.8%. Over five years a performance of 10.6% 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 7.4% but above the discount year of 6.0%, 1.4% below the benchmark investments for the 2018-19 financial The Fund achieved a return on has increased by £0.70 million (30.0%). five years the market value of the Fund valuation of £2.85 billion. Over the last 2019, compared to the previous year end has reached £3.02 billion as at 31 March £161.7 million (5.6%) over the year and The total value of the Fund rose by • • • Changes tothe Fundin2018-19 • being invested in January 2019, with a being invested in January 2019, with a Brunel Private Equity Portfolio with £1.2M A commitment of 2.0% was made to the Brunel UK Equities Active portfolio. AXA Framlington were transferred to the management of external UK manager On 21 November 2018, assets under the in July 2018. General Investment Management (LGIM) Brunel portfolios managed by Legal and Equity portfolios were transitioned to portfolio, and the Allianz managed Global The internally managed passive UK equity 2019, a rise of 20.1%. in 2014-15 to 120,112 as at 31 March over the same 100,022 period from payments have been steadily rising a rise of 16.0%. The pension benefit to £122,212,000 as at 31 March 2019, years £105,331,000from in 2014-15 gradually increasing over the past five contributions Income from has been period reduced from 25 years to 22 years. 31 March 2013, with the deficit recovery was 83%, an increase from 82% as at Astra House, Harlow Astra House, Harlow • in 2018-19: the following investment commitments CBRE, the Fund Property manager made and corporate bonds. or further disinvestment from equities will be funded from cash balances and/ 2019. Drawdowns against commitments £2.9M was also invested in January Secured Income Portfolio of which further 2.0% commitment to the Brunel • two- bedroom flats; been converted into studios, one- and previously an office block and has (see photograph below) which was for £8.9 million in September 2018 Purchased Astra House in Harlow

Introduction and Overview | 7 • • • the fund on the following: this report must contain information about following the year end. From 1 April 2014, 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 Annual Report The been put into practice during the year investment strategy statement has This should demonstrate how the Investment PolicyandPerformance – 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 report must list the names and, where Overall Fund Management – The • • with Step Forward in October 2018. for a new affordable housing fund Purchased a portfolio for £3.3 million Lancashire for £2.6 million; scheme in Buckshaw Village, social rented homes at one Purchased a portfolio of sixty • • • • • • • • • • • appropriate. which the authority considers Other Material - any other material External Audit Opinion. Communications Policy Statement. Investment Strategy Statement. Funding Strategy Statement. Pensions AdministrationStrategy report. 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 Compliance Statement. the content of the Governance LGPS Regulations 2013 prescribes Governance – Regulation 55 of the 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 realisation of investments for the Fund. undertaking the acquisition, retention or the of a performance company when environmental and ethical issues on other the factors, effects of social, Fund, are expected to consider, amongst in the best financial interests of the The Fund investment managers, acting shareholders. will investment improve returns to its financial performance of a company and have a favourable effect on the long-term and ethical issues is generally likely to practice in terms of social, environmental The Council believes that following good exposing assets to unnecessary risk. return on Fund investments without duty to obtain the best possible financial The Council has a paramount fiduciary Investing Responsible

Introduction and Overview | 8 Overall Fund Management which are provided: fund managers in 2018-19, the details of internally but used seventeen external not currently manage any fund’s and Cash Equivalents. The Fund does 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 2 1 Key Fund’s Managers The Overall FundManagement 3

Dorchester, Dorset DT1 1XJ DT1 Dorset Dorchester, Council, Dorset County Hall Authority Administering Smart Beta portfolio managed by Legal management of Allianz transferred to the Brunel On 18 July 2018, the holdings under the Investment Management. Equities portfolio managed by Legal & General was transferred to the Brunel UK Passive On 11 July 2018, the Internally Managed Fund to the Brunel UK Equities Active portfolio. management of AXA Framlington were transferred On 21 November 2018, assets under the & General Investment Management.

Fund Managers Managers Brunel - Colmore Management Limited Insight Investment IFM Investors Hermes GPE LLP 2 3 1 Investec Asset Management Managers UK Limited International Ltd Wellington Management Schroders HarbourVest Partners, LLC Investment Management Brunel - Legal & General Aberdeen Standard Investments Royal London Asset Management CBRE Global Investors J.P.Morgan Asset Management Limited Baring Asset Management CQS Allianz Global Investors AXA Framlington Investment Internally Managed

Asset Class Private Markets Investment Liability Driven Infrastructure Infrastructure Overseas Equities UK Equities Overseas Equities UK Equities Overseas Equities UK Equities Private Equity UK Equities Private Equity Bonds Property Overseas Equities Growth Fund Diversified Multi Asset Credit Address 9 Colmore Row, Birmingham B3 2BJ EC4V 4LA Street, London Victoria Queen 160 EC2V 7BB 3rd Floor, 60 Gresham Street, London 150 Cheapside, London EC2V 6ET 4th Floor, One Strand, London WC2N 5HR 199 Bishopsgate, London EC2M 3TY County Hall, Dorchester, Dorset DT1 1XJ 25 Basinghall Street, London EC2V 5HA 7 Newgate Street, London EC1A 7NX 80 Victoria Street, London SW1E 5JL 1 London Wall Place, London EC2Y 5AU One Financial Center, Boston, MA 02111 One Colman Street, London EC2R 5AA 6 St Andrew Square, Edinburgh EH2 2AH 55 Gracechurch Street, London EC3V 0RL EC4M 9AF Third Floor, One New Change, London 60 Victoria Embankment, London EC4Y 0JP 20 Old Bailey, London EC4M 7BF

Overall Fund Management | 10 Other Organisations/Individuals Other Brunel Pension Partnership Limited Government Local PensionFundPool MJ Hudson Allenbridge Mr Alan Saunders Independent Adviser MJ Hudson Allenbridge 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 8 Old Jewry, London EC2R 8DN 8 Old Jewry, London EC2R 8DN 2 Temple Back East, Temple Quay Bristol BS1 6EG Quartermile 3, 10 Nightingale Way, EdinburghEH3 9EG 20 Churchill Place, Canary Wharf, London E14 5HJ 49 South Street, Dorchester, Dorset DT1 1DW PO Box 2711, Reading RG1 3UL 5 Callaghan Cardiff CF10 Square, 5BT 163 W George Street, Glasgow G2 2JJ Address from 1 from April 2019. Dorset County Pension Fund with effect auditors for Dorset Council and the Deloitte have been appointed as external External Auditor address and control risk. against, and offer a practical approach to that the Fund’s performance is measured of compliance against other benchmarks carrying out independent assessments in the selection of new managers and general investment matters, assisting investment activity, giving advice on Fund Committee through reviewing has been appointed to support the Pension An Independent Adviser (Alan Saunders) Independent Adviser Waddingham as its Fund Actuary. The Council has appointed Barnett and if an employer leaves the Scheme. 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

Overall Fund Management | 11 • • • • • • 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 & Custodian Services 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 of 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 Management Strategy. invested in with accordance the Treasury day expenses. Surplus balances will be and other managers and to pay day-to- private equity, property investments required to pay pensions, to fund Working balances comprise funds 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 www.yourpension.org.uk/Dorset/Home.aspx 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 Call: on: our Pensions helpline County PensionFund, contact please For more information Dorset about the Contact and Information Further

Treasury and Investments Senior 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 (01305) 228524 Pension Benefits Manager Mrs KarenGibson regarding Benefits Queries (01305) 224119 Finance Manager

Overall Fund Management | 13 Financial Performance pension overpayments. to write off small amounts in relation to Payroll team are looking to adapt a policy outstanding. The Human Resources recovered and £66,540.42 remained March 2019, £6,499.35 of this had been overpayments in 2018-19. As at 31 There was a total of £73,039.77 pension Pension Overpayments Analysis of the employer’s circumstances. Fund did not exercise this option due to payments was the considered. However, interest in respect of the late contribution 14 January 2019. The option to levy of contributions was submitted on Regulator regarding the late payment contributions. A reportto the Pensions up to date and there were no overdue As at 31 March 2019, the employer was regularly paid their contributions late. In 2018-19 there was one employer who Late Contributions Financial Performance

Financial Performance | 15 Investment Performance Investment Performance

This year’s Fund Information Total Asset Distribution as at 31 March 2019 - The total asset distribution of the Dorset County Pension Fund as at 31 March 2019 is shown below. These allocations are within the agreed ranges. £162 M £3.030 Bn  UK Equities £643M (21.3%)  Bonds £214M (7.1%)  Liability Driven Investments £401M (13.3%) Fund value Total  Overseas Equities £801M (26.4%) Investment Performance | 17  Private Equity £80M (2.7%) increase fund value  Property (including Property Funds) £323M (10.7%)  Diversified Growth Fund £176M (5.8%)  Multi Asset Credit £140M (4.6%)  Infrastructure £139M (4.6%) 5.6 % 1.4 %  Cash and Cash Equivalents (including Derivatives) £106M (3.5%)

Fund Growth (year ended 31 March) - The change in value of the Fund over the Fund value Underperformed last seven years as at 31 March. increase benchmark 3,500 3,000 Book Cost 2,500 Market Value 2,000 £M 1,500 1,000 500 0 2013 2014 2015 2016 2017 2018 2019 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 Private Equity Cash Property Total Return Seeking Assets F/X Hedging Infrastructure Total Asset Valuation Liability Matching Assets Diversified Growth Multi Asset Credit Total ListedEquities Corporate Bonds Emerging Markets Equities Overseas Equities Asset Class UK Equities 10 15 20 25 Asset mix of the portfolio mix ofthe Asset 0 5 UK Equities Overseas Equities Emerging Emerging Markets Several Internal CBRE State Street Several Insight Barings CQS Management Royal London Asset JP Morgan Several Manager Several Corporate Bonds Multi Asset Cedit Diversified Growth 2,474.3 2,854.0 1,441.8 Fund 295.4 106.6 379.7 173.3 136.2 204.5 103.2 654.2 684.4 31-Mar-18 76.5 40.0 £M - ructure Infrast- 100.0 86.7 50.5 10.4 13.3 22.9 24.0 3.7 2.7 1.4 0.0 6.1 4.8 7.1 3.6 % Private Equity 2,622.5 3,023.6 1,444.2 323.3 138.7 105.1 401.1 176.1 139.7 214.4 703.0 643.0 31-Mar-19 80.3 98.2 0.7 £M Property 100.0 86.7 47.8 10.7 13.3 23.3 21.3 4.5 2.7 3.5 0.0 5.8 4.6 7.1 3.2 % Strategic Target Actual 31/03/19 Actual 31/03/18 Cash 2,600.3 3,023.6 1,360.6 Target Allocation 362.8 151.2 151.2 423.3 241.9 151.2 181.4 665.2 604.7 90.7 £M Matching - - Liability 100.0 86.0 45.0 22.0 20.0 12.0 14.0 5.0 5.0 0.0 0.0 8.0 5.0 6.0 3.0 %

Investment Performance | 18 benchmarks. comparison against their specific the investment categories and enables for one, three and five years in each of The table opposite sets out the returns Five YearsbyAssetClass and Fund Returns Achieved OverOne,Three ³ New mandate January 2019 ² New mandate November 2018 ¹ New mandate July 2018 Total Assets IFM Fund Hermes Fund Infrastructure Insight Hedging Inflation Bonds Barings Asset Management Diversified GrowthFund CBRE Global Investors Property Brunel PM Secured Income³ Aberdeen Standard HarbourVest Private Equity CQS Multi AssetCredit Royal London Asset Management Bonds JP Morgan Emerging Markets (Hedged) ¹ Brunel / LGIM Smart Beta Brunel / LGIM SmartBeta ¹ Wellington Investec Overseas Equities Brunel UK Active² Brunel/ LGIM Passive¹ Schroders UK Equities Dorset 18.0 19.7 23.3 11.6 11.6 12.2 -1.2 -4.9 -5.6 6.0 8.6 1.6 5.4 1.2 2.6 4.8 9.2 9.7 9.4 % 1 year Benchmark 10.0 10.0 11.1 12.0 12.0 -0.1 -0.3 -3.1 7.4 8.4 4.9 6.0 4.8 6.4 6.4 4.5 9.2 9.4 9.4 % Dorset 10.6 16.7 22.1 10.7 15.4 14.6 15.1 13.7 10.9 N/A N/A N/A N/A N/A N/A 6.8 5.2 6.9 7.0 % 3 year Benchmark 10.8 10.0 10.0 16.1 14.4 14.4 14.4 N/A N/A N/A N/A N/A N/A 4.6 6.8 9.5 9.5 5.9 5.9 % Dorset 10.3 11.0 18.3 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 8.7 9.9 4.1 7.5 9.1 9.8 % 5 year Benchmark N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 8.8 8.9 4.6 9.7 6.1 6.1 6.8 8.9 4.9 %

Investment Performance | 19 10.8%. Positives to wereInfrastructure managerIFM performance who returned 16.7% Over the three-year period, the Fund returned 10.6% against its bespoke benchmark of Return Rates of Three Year Summary their underperformed index by 11.2%. The main detractor towas the performance Infrastructure managerHermes who Infrastructure managerIFM returned 18.0% against its benchmark of10.0%. Standard their outperformed benchmark by 16.9% and 13.3% respectively, whilst mainly three managers. The two Private Equity managers HarbourVest and Aberdeen to compared a benchmark of7.4%. Positives have to performance been attributable to During the year, the Fund its underperformed bespoke benchmark with a return of 6.0% Return Rates of One Year Summary compared with compared its benchmark foreach of the last ten years as at 31 March. - This Total AnnualReturns diagram shows the total return of the Fund 10 20 30 40 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Benchmark Dorset performance 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 benchmark by 0.5%. Asset Management underperformed their Diversified Growth Manager Barings benchmark over the five-year period. Only one manager underperformed their respectively. benchmarks by 12.2%, 4.9% and 4.9% Standard their who outperformed HarbourVest, Schrodersand Aberdeen of 8.8%. Positives to were performance return of8.7% to compared a benchmark in-line its bespoke benchmark with a Over the five-year period, the Fund was Return-Five Rates of Year Summary their underperformed index by 3.2%. the Infrastructure manager Hermes who The main detractor towas performance their outperformed benchmark by 5.0%. The UK EquitymanagerSchroders their outperformed benchmark by 5.9%. Private Equity manager HarbourVest against their benchmark of 10.0%, whilst

Investment Performance | 20 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. Management Wellington Investment Schroders Management Royal London Asset Management J.P.Morgan Asset Management Investec Asset Insight IFM Hermes HarbourVest CQS CBRE Brunel - LGIM Brunel - LGIM Brunel - LGIM Brunel - Fundrock Brunel - Colmore Brunel - Colmore Management Barings Asset Aberdeen Standard Manager Global Equity UK Equities Corporate Bonds Emerging Markets Equity Global Equity Liability Driven Investment Infrastructure Infrastructure Private Equity Multi Asset Credit Property Passive UK Equities Passive Smart Beta (Hedged) Passive Smart Beta 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 > 5 MSCI Emerging Markets Net MSCI World Net Insight from Sourced 10% Absolute Return 10% Absolute Return FTSE All Share 1 month LIBOR +4% MSCI Quarterly Universe Passive UK Equities Passive Smart Beta (Hedged) Passive Smart Beta FTSE All Share Consumer Price Index MSCI ACWI 3 Month LIBOR +4% FTSE All Share Benchmark Indices 2015 2006 2007 2012 2015 2012 2016 2015 2006 2017 2000 2018 2018 2018 2019 2019 2019 2012 2006 Appointment Date of

Investment Performance | 21 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 can be found on page 32. 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 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 and eligible children. partners or eligible cohabitating partners members and their spouses, civil scheme providing pensions for all and has developed into a comprehensive (LGPS) has been in existence since 1922 The Local GovernmentPension Scheme Pension Scheme Local The Government Scheme Administration the annual pension and any retirement the annual pension and any retirement 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. for Scheme Specific (Conditional) Data. were 99.2% for Common Data, and 97.70% reported to the Pensions Regulator in 2018 The Data Quality scores for the Fund, as this represents good value for money. staff turn over and complaints very low, With data quality scores very high, and measured as £21.44 per member in 2018. 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 basis. continue to be calculated on a final salary up to and including 31 March 2014 will months pay. Benefits built up in the LGPS membership and (usually) the final twelve grant were paid based on the period of

Scheme Administration | 23 number ofindividual cases work completed for the year was 47,389. This represents a section of ourworkonly, it does not all cover work areas. The total work area,plus the % completed within our target time. completion, (Fund KPIs), the legal timescales, the number oftasks completed in each The table below shows a of the summary main task areas, our local target for Performance Information dependent's benefit Deaths - Calculate and notify amount of Process benefits Estimates - Letter notifying estimate of retirement retirement grant (including all retirement types) Retirements - Process and pay lump sum Deferment - Calculate and notify deferred benefits Transfers in - Letter detailing transfer in quote Transfers out - Letter detailing transfer out quote Refund -Process and pay a refund to scheme member Joiners - Send notification of joining the LGPS processed Divorce - estimates for divorcepurposes General Correspondence 5 Days Fund KPIs 15 Days 5 Days 40 Days 15 Days 10 Days 15 Days 30 Days Court OrderedRequests 30 Days or 21 Days for 30 Days 2 months Requirement Legal 2 months 2 months 2 months 2 months 2 months 2 months 2 months 3 months

completed inyear Number cases of 1,613 2,460 3,025 2,419 7,107 5,359 655 802 340 156 Benchmark within % completed 100.00 99.84 98.70 98.15 99.00 96.47 99.42 93.32 84.62 99.79

Scheme Administration | 24 half the normal main scheme pension. the main scheme contributions and build up living. Members of the 50/50 option pay half April in line with changes in the cost of contribution rate applies are adjusted each 12.5%. The pay ranges to which each according to pay, ranging from 5.5% to members of the main scheme varies The rate of contribution payable by Employee contributions them for membership of the LGPS. can only join if their employer nominates bodies such as a town or parish council of admission bodies and designating their own pension schemes. Employees firefighters, civil servants, etc who have therefore not open to Police Officers, schemes. Membership of the LGPS is membership of other statutory pension age of 75 and who are not eligible for three months are or more,under the who have contracts of employment of employees of participating employers Membership is generally available to Eligibility formembership Home.aspx http://www.yourpension.org.uk/Dorset/ resources, please see website our For further information and additional LGPS at a glance The final salary pensions based on 60ths. to 31 March 2014 therefore provides time. Membership 1 from April 2008 to provide benefits as it did at the built up before1 April 2014 continues and death Membership cover. that was in the 50/50 option have full ill-health criteria for permanent incapacity. Those tiers, for those that satisfy the Scheme’s also be awarded, based on one of three against inflation. Ill health pensions can during that year, which is again protected a pension of a 98th of the pay received Someone in the 50/50 option builds up to maintain its value in real terms. increased each year in line with inflation, during that year. This pension is then a pension of a 49th of the pay received scheme, an employee member builds up For each year ofmembership in the main Retirement benefits AVCs attract tax relief in most cases. permutations thereof. Both APCs and extra lump sum,extra death benefits or Prudential, to provide extra pension, operated in conjunction with the contributions (AVCs) into a scheme money purchase additional voluntary their pension. They can also pay contributions (APCs) to increase Members can pay additional pension Extra benefits • • • • pension age, whicheveris the later, but: Normal pension age is age 65 or State Age retirement of retirement benefits membership is required to draw Generally a minimum oftwoyears of lumpsum.HMRC limits apply. annual pension foregone produces £12 a rate of 1:12, in other words, every£1 of annual pension for a larger lump sumat Members can normally exchange some final salary benefits, based on 80ths. Membership before that also provides pension age; come into payment before normal reductions may apply where benefits age from 55 onwards, but actuarial may request payment of benefits Members who have left employment will apply. generally early retirement reductions employer approvalis not required. But 55 own choicefrom onwards and Members may retire early at their redundancy orbusiness efficiency; their retirement is on grounds of benefits age from 55 onwards if Members may retire with unreduced age if awarded due to ill health; Pension benefits are payable at any

Scheme Administration | 25 distribution of this lump sum among the distribution of this lump sum among the authority has absolute discretion over the assumed pay. The administering normally equivalent to three years A lump sum death grant is payable, Benefits ondeathinservice eligible dependent children. eligible cohabiting partner and any to the member’s spouse,civil partner, Pensions are also normally payable years pension is paid as a lump sum. death, in which case the balance of ten pensioner is under age 75 at the date of years pension has been paid and the A death grant is payable if less than ten Benefits ondeathafterretirement applied in earlier versions of the Scheme. to earlier normal retirement ages that regarding membership that are linked There are also various protections • • up to age 75. beyond normal pension age but only Payment of benefits may be delayed reductions may apply; consent is required and actuarial hours ofworkorgrade.Employer age 55 onwards if they reduce their may also ask to retire flexibly from Members who remain in employment partner and eligible dependent children. spouse, civil partner, eligible cohabiting may also be payable to the member’s representatives or nominees. Pensions deceased’s relatives, dependants, personal Statutory duties expectations Member Cost efficiency with the Consumer Prices Index. Pensions Increases are currently in line annually to protect them from inflation. up, and pensions in payment, are increased Career average pensions that are beig built living increases of Cost administration Successful

Scheme Administration | 26 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 shown here compares the 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 Accrual 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 Administration | 27 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 Scheme Membership contribution rates are shown on page 32. commencing 1 April 2017. Employer contribution rate for the three-year period 31 March 2016 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 2018-19 £157,801 or more £105,201 to £157,800 £89,401 to £105,200 £63,101 to £89,400 £45,201 to £63,100 £35,701 to £45,200 £22,001 to £35,700 £14,101 to £22,000 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 ContributionsTable2018-19 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 | 28 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 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 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 children of deceased scheme members. pensions are also payable to eligible service after 5 April 1988. Children’s account ofthe member’s pensionable eligible co-habiting partner only takes of 1/160th. The pension survivor for an co-habiting partner at an accrual rate husband, wife, civil partner or eligible member to the scheme member’s are payable on the death of a scheme three years’ pensions pay. Survivor’s be paid. This death grant is equal to sum in the of a form 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 earlyretirement 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. retires by reason of redundancy or at the age of 55 and, if the member membership is less than 3 months; benefits are paid even if the case of death in service, dependants’ employment again in future. In the individual will be able to obtain gainful on how soon it is judged that an benefit are payable, depending Three different levels of ill-health the grounds ofpermanent ill-health. at any age, if the member retires on date they joined the scheme; length of pensionable service and the depends on the individual’s age, sex, The amount of reduction that applies benefits before State Pension Age. where someone draws their pension reductions will normally apply

Scheme Administration | 29 table below: a proportionate increase in line with the or 24April2018,youwill after receive increase. If 2.4% your pension began 24 April 2018, you will receive the full If the members pension began before 2.4% from Monday 8 April 2019. 2.4%, the annual pension will increase by Consumer Prices Index (CPI) rate was against inflation. As the September 2018 (Review) Orders to help protect pensions with annual statutory Pension Increase deferred benefits are made in accordance Mandatory increases in pensions and Pension Increase 24 February 2019 24 January 2019 24 December 2018 24 November 2018 24 October 2018 24 September 2018 24 August 2018 24 July 2018 24 June 2018 24 May 2018 24 April 2018 24 April 2018 Pensions commencing before to to to to to to to to to to to 23 March 2019 23 February 2019 23 January 2019 23 December 2018 23 November 2018 23 October 2018 23 September 2018 23 August 2018 23 July 2018 23 June 2018 23 May 2018 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% 2.20% 2.20% 2.40% on

ten years: increases that have applied for the last The table below shows the rate of 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- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Year Beginning April 0.0 3.1 5.2 2.2 2.7 1.2 0.0 1.0 3.0 2.4 Rate ofIncrease % RPI CPI CPI CPI CPI CPI CPI CPI CPI CPI Index

Scheme Administration | 30 • 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 2019 there were 297 Fund of the Participating Employers of the scheme employers making employment with the Council or one Active Members: in the Pension Fund. were 64 admitted bodies participating relevant body. At 31 March 2019 there between the Pension Fund and the virtue of an Admission Agreement become members of the Scheme by bodies’ contracts, where staff can organisations carrying out scheduled circumstances, private sector voluntary, charitable and, in certain Bodies. These are Admitted to be members of the Fund. employees are automatically entitled District and Borough Councils, whose maintained schools), Academies and as the County Council (including Bodies. Employers such Scheduled Those in a dedicated section on our website. outsourcing and new employers including Specific supportis provided to employers year, and all employers are invited to attend. Officers Group – PLOG), meet three times a Employer meetings, (Pension Liaison directly into our workflowsystem. 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 contributions to the Pension Fund. Those who receive a Those who have Employers www.yourpension.org.uk/Dorset/ template document at 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

Scheme Administration | 31 employee during the year are also shown. a period of twenty-two years. The contributions both received from employer 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 2018-19. as at 31 March 2019. 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 March2019 Scheduled Bodies Bridport Town Council Chickerell Town Council Christchurch Borough Council Bournemouth Borough Council Borough of Poole Principal Councils Dorset County Council - Pre LGR 1/4/1997 Dorset County Council - Post LGR 1/4/1997 Colehill Parish Council East Dorset District Council Purbeck District Council North Dorset District Council Alderholt Parish Council Parish andTownCouncils Weymouth Councils Partnership Tricuro Arne Parish Council Bere Regis Parish Council Blandford Town Council Bothenhampton And Walditch Parish Council 1 Active Members Number of 2,397 2,016 6,488 245 262 108 625 996 19 14 1 2 0 1 0 2 1 1 Number of Pensioners 3,533 2,590 2,524 6,115 295 309 196 221 999 240 11 8 0 0 2 0 0 0 Contribution Rate Paid % Rate Paid 22.0 22.0 15.2 15.2 15.9 22.0 22.5 15.2 22.0 15.8 15.3 17.7 22.0 22.0 22.0 22.0 N/A N/A Contributions Employer 13,855,274.62 10,355,661.71 26,960,445.41 1,009,242.05 3,374,616.58 3,146,279.10 995,139.59 716,350.70 154,000.00 92,050 .43 57,614 .09 9,099 .13 4,141.01 7,451.26 1,457.45 2,372.81 - - Contribution Rate Paid % Rate Paid Employee N/A N/A 6.3 5.5 6.6 6.4 6.5 6.2 6.3 6.5 5.9 6.5 6.6 5.9 5.7 5.5 5.8 6.4 Contributions Employee 3,703,413.53 3,028,771.74 7,034,097.39 1,035,053.27 1,011,075.36 326,222.11 314,025.33 173,491.81 26,404.27 16,592.30 2,555.03 1,136.56 1,928.15 364.29 625.57 - - -

AnnualScheme Report Administration 2018 - 2019 | 32 Scheduled Bodies Corfe Mullen Parish Council Lytchett Matravers Parish Council Lyme Regis Town Council Lytchett Minster & Upton Town Council Crossways Parish Council Dorchester Town Council East Stoke Parish Council Milborne St Andrew Parish Council Ferndown Town Council Portland Town Council Gillingham Town Council Knightsford Parish Council Puddletown Parish Council Shaftesbury Town Council St Leonards Parish Council Sherborne Town Council Stalbridge Town Council Sturminster Marshall Parish Council Sturminster Newton Parish Council Verwood Town Council Swanage Town Council Wareham St Martin Parish Wareham Town Council West Moors Parish Council West Parley Parish Council Wimborne Minster Town Council Wool Parish Council Bournemouth & Poole Adult Learning Arts Institute At Bournemouth Further and Higher Education Establishments 2 Active Members Number of 116 239 17 24 11 16 28 0 6 1 6 1 1 1 5 2 1 7 1 1 1 0 3 0 6 2 1 9 1 Number of Pensioners 12 24 19 63 28 64 0 1 0 1 0 0 0 7 3 8 0 3 0 0 0 2 0 1 9 1 0 2 1 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 22.0 22.0 22.0 22.0 22.0 19.6 14.1 22.0 N/A N/A Contributions Employer 124,840.51 444,650.37 981,054.46 86,545.46 26,059.95 26,272.56 97,211.94 30,401.57 66,153.78 39,892.40 77,326.82 13,130.21 33,539.64 37,068.82 3,330.30 3,064.08 5,552.23 5,143.82 4,550.09 1,879.56 8,840.63 3,322.61 2,856.36 490.82 606.87 543.84 770.44 - - Contribution Rate Paid % Rate Paid Employee N/A N/A 6.5 5.9 6.0 5.8 5.8 6.5 6.4 5.5 5.5 7.1 5.4 6.7 5.9 6.3 6.4 6.5 5.8 5.5 5.9 6.1 6.4 6.2 5.8 6.0 6.2 6.5 5.6 Contributions Employee 421,351.18 23,884.17 28,743.88 20,196.09 11,371.72 22,418.34 34,242.16 10,014.37 78,537.94 1,667.08 8,226.54 7,002.74 9,746.71 1,416.32 1,519.73 1,200.35 3,664.14 9,977.44 2,492.57 878.02 905.28 151.70 135.96 189.52 469.92 830.62 723.34 - -

AnnualScheme Report Administration 2018 - 2019 | 33 Scheduled Bodies Canford Heath Infants School (Teach Trust) Budmouth College Broadstone Middle School Bishop Of Winchester Academy Bayside Academy (Ambitions) Ambitions Academies Trust Allenbourn Middle School Blandford Education Trust Beaminster St Mary's Academy School Avonbourne Academy Avonbourne Atlantic Academy (Aspirations) Bourne Academy Bournemouth And Poole College Beaucroft School Harewood College Baden Powell & St Peter School Bournemouth SchoolAcademy Bournemouth SchoolForGirls Beechcroft St Pauls (DSAT) Bethany CE Junior School Kingston Maurward College Bournemouth SchoolForGirls Academy Broadstone First School Winton Arts & Media College Ad Astra Infant School (Teach Trust) Academies andSchools 7 4 6 7 5 3 3 Active Members Number of 1,546 131 108 173 405 189 210 48 25 31 34 53 55 42 62 32 51 17 51 49 40 35 57 60 0 0 0 0 0 Number of Pensioners 399 517 103 208 51 18 26 10 17 11 15 14 3 1 4 5 3 6 3 9 0 2 5 5 9 6 3 0 4 Contribution Rate Paid % Rate Paid 22.5 18.8 18.8 18.8 18.8 18.8 18.8 18.8 18.8 15.5 13.1 18.8 18.8 15.1 18.8 15.3 18.8 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Contributions Employer 1,508,279.55 4,443,951.31 367,235.91 650,289.25 132,504.27 399,201.58 411,294.65 162,982.34 101,286.30 268,202.86 137,711.85 197,027.05 111,419.26 148,530.31 79,386.52 24,319.23 55,186.54 ------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 5.9 6.1 5.8 5.8 5.6 6.2 5.7 5.5 6.3 6.4 6.9 6.2 5.5 5.9 6.3 6.0 6.1 Contributions Employee 2,041,812.29 109,221.49 136,179.82 396,080.76 138,834.73 184,645.30 50,552.71 35,927.74 23,748.42 63,310.49 41,496.07 66,722.32 36,772.09 16,767.56 49,782.07 42,286.72 7,114.07 ------

AnnualScheme Report Administration 2018 - 2019 | 34 Scheduled Bodies Hillview Academy (Reach) Heathlands Primary School Heath Academy Trust Junior School (Teach Haymoor Trust) Epiphany C of EPrimarySchool Dorchester Middle School Corfe Hills Academy Corfe Castle Primary School Castleman Academy Trust IPACA Highcliffe St Mark PrimarySchool Heatherlands Primary School Dorset Studio School Courthill Infants School Chickerell Primary Academy Colehill First School Canford Heath Junior School (Teach Trust) Hill View Primary Academy Harbourside Learning Partnership Hamwic EducationTrust Dunbury C of EAcademy Elmrise Academy Leaf Emmanuel C of EMiddle School Hillary Trust Hayeswood First School Hillside Community First School 4 5 4 6 8 6 4 4 3 3 Active Members Number of 130 537 42 19 33 42 32 21 27 60 10 28 41 57 58 51 47 62 38 24 39 4 0 0 8 6 0 6 0 Pensioners Number of 34 60 29 10 10 2 0 5 1 7 3 5 3 0 3 6 2 7 8 7 1 6 3 0 1 1 0 1 2 Rate Paid % Rate Paid Contribution 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 N/A N/A N/A N/A N/A N/A N/A Contributions Employer 184,376.76 157,898.26 225,870.65 131,910.07 667,727.59 430,688.36 97,044.22 76,804.54 61,287.42 85,618.39 68,574.44 25,211.44 21,400.72 26,458.70 77,736.59 ------Rate Paid % Rate Paid Contribution 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 6.1 6.1 5.9 5.6 5.7 5.7 5.7 5.7 5.7 5.6 5.9 6.1 5.5 5.7 5.6 Contributions Employee 202,932.54 129,028.33 31,391.17 59,661.94 50,066.19 61,446.82 23,051.04 18,483.43 26,169.24 40,208.27 20,538.17 23,248.89 7,217.08 6,909.36 7,673.13 ------

AnnualScheme Report Administration 2018 - 2019 | 35 Scheduled Bodies Parkfield Academy (Reach) Milldown C of EPrimary Longspee Academy Loders CE Primary Academy Lockyer's Middle School Parkfield School Oakmead Academy Leaf Ocean Academy Poole Malmesbury Park Primary School Ocean Learning Trust Manorside Primary Academy Marshwood CEPrimarySchool Montacute School Moordown St Johns Moordown Primary School Muscliff Primary School Old Town Infant School & Nursery Oakdale Junior School Jewell Academy Kings Park Academy Kingsleigh Primary School Kinson Primary School LeAF Studio Lilliput C of EInfant School Parkstone School Grammar Longfleet Primary School Plymouth CAST - Bournemouth Plymouth CAST - Dorset Merley First School 4 5 4 5 5 5 Active Members Number of 152 27 43 39 66 29 41 25 31 22 34 36 69 32 73 41 24 73 50 71 55 54 88 34 15 67 88 9 0 9 Pensioners Number of 10 20 27 19 26 3 0 2 3 2 0 0 2 0 9 1 9 0 7 1 2 6 5 0 0 7 4 4 0 5 Rate Paid % Rate Paid Contribution 18.8 18.8 18.8 18.8 22.5 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 222,594 .14 121,210.96 269,650.89 123,991.04 436,143.94 151,467.61 181,183.91 127,587.65 134,301.78 182,286.00 160,472.74 135,492.04 67,938.82 32,693.80 93,633.26 47,179.43 57,936.33 17,642.25 69,419.52 11,203.19 73,199.52 71,020.36 37,910.03 ------Rate Paid % Rate Paid Contribution Employee N/A N/A N/A N/A N/A N/A N/A 5.5 5.9 5.5 6.0 6.4 6.0 5.7 5.7 5.7 5.8 5.8 5.5 5.7 5.6 5.7 5.5 5.4 5.8 5.8 5.7 5.9 6.1 5.7 Contributions Employee 133,629.10 27,990.58 21,325.22 59,211.39 35,205.59 40,388.67 37,521.41 14,241.32 17,590.91 46,687.84 21,035.37 54,437.66 38,566.08 21,567.03 40,777.75 55,942.55 21,546.05 11,836.76 51,912.19 39,662.07 9,646.27 3,260.73 3,277.46 ------

AnnualScheme Report Administration 2018 - 2019 | 36 St Walburgas Catholic Primary School Scheduled Bodies (Greenwood Tree Academy Trust) St Mary's Middle School St Mark's C of EPrimarySchool St John's Primary School St Edward's RC & C of ESchool St Michael’s Primary School St Mark's CE PrimarySchoolSwanage St Luke's C of EPrimarySchool St Gregory's PrimarySchool St Osmund's C of EMiddle School St Michael’s Middle School St Peter's RC School Queens Park Infant Academy Queen Elizabeth's School St Aldhelms Academy Southern Multi Academy Trust St Andrew's C of EPrimarySchool St Clement's And St John's C of EInfant School Stalbridge Primary School Plymouth CAST - Poole Pokesdown Community PrimarySchool School Poole Grammar Queens Park Junior Academy Saturn EducationTrust Shillingstone C.E. V.A.PrimarySchool Sherborne AreaSchool'sTrust St James' C of EVC First School St John's CE VC First School 4 6 9 8 6 Active Members Number of 126 139 146 101 118 284 12 44 19 26 70 46 59 66 59 40 65 35 37 60 66 35 45 28 0 0 0 1 0 Pensioners Number of 54 21 10 11 34 37 36 2 0 2 4 6 8 3 1 4 5 3 4 6 3 1 5 9 5 1 0 6 3 Rate Paid % Rate Paid Contribution 18.8 18.8 22.5 18.8 18.8 18.8 18.8 18.8 18.8 21.0 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 N/A 21 Contributions Employer 105,374 .16 286,893.23 346,703.04 176,398.39 194,584.81 127,556.85 204,557.16 312,999.87 529,252.11 103,028.53 142,927.26 173,389.64 113,967.08 94,235.58 61,595.48 68,303.91 81,141.29 40,851.52 75,680.48 69,747.60 8,227.17 ------Rate Paid % Rate Paid Contribution Employee N/A N/A N/A N/A N/A N/A N/A N/A 5.8 5.7 5.5 5.9 5.6 5.5 5.5 5.5 5.8 6.1 5.9 5.7 6.0 5.5 5.7 5.7 6.0 5.6 5.7 5.6 5.7 Contributions Employee 106,439.53 161,198.19 88,104.90 49,934.07 57,925.28 27,809.19 17,832.17 37,953.36 32,258.67 66,815.72 87,955.42 35,586.41 20,217.32 43,260.40 24,557.88 55,936.44 12,270.20 22,638.68 33,737.02 21,636.74 2,008.28 ------

AnnualScheme Report Administration 2018 - 2019 | 37 Bournemouth Health Other Wimborne AcademyTrust Wey Valley School Scheduled Bodies Dorset Magistrates Court Woodroffe School Woodroffe Westfield Arts College Wareham St Mary CEPrimarySchool Wyvern Academy Bournemouth Airport Winton Primary Academy Witchampton C of EVoluntaryAided First School Stanley Green Infant Academy Stourfield Infant School Bournemouth Transport TEACH Trust Compass Contract Services Ltd The Bicknell School Tregonwell Academy Trent Young's CE School The Quay School The Swanage School Thomas Hardye School Verwood C Verwood ofEFirst School Dorchester Joint Burial Committee The Minerva Learning Trust Dorset CC Health Dorset & Wiltshire FRS 10 4 8 4 Active Members Number of 101 100 105 115 288 174 11 15 52 62 47 52 37 17 27 28 0 0 8 0 0 0 1 6 6 0 0 0 Pensioners Number of 203 40 11 16 91 42 40 38 44 10 3 3 0 0 1 1 3 2 1 0 7 2 1 3 0 8 1 1 Rate Paid % Rate Paid Contribution 22.5 18.8 18.8 17.1 22.5 18.8 18.8 18.8 23.2 18.8 18.8 18.8 18.8 18.8 18.2 18.8 18.8 18.8 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Contributions Employer 653,075.06 299,717.76 298,651.14 230,607.26 171,956.73 175,243.23 483,097.91 122,541.74 308,770.80 303,061.63 167,853.33 623,965.97 270,136.51 10,093.83 38,449.81 22,368.96 73,046.64 64,780.93 ------Rate Paid % Rate Paid Contribution Employee N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5.9 5.6 6.2 6.4 6.0 5.8 5.7 5.3 6.3 5.8 5.9 6.0 6.0 5.5 5.5 5.7 5.9 6.0 Contributions Employee 205,661.58 148,010.56 198,663.19 80,028.22 69,091.01 56,504.36 47,115.56 37,017.71 10,858.31 94,230.79 92,753.14 48,185.97 72,399.16 23,305.61 20,510.47 3,716.52 6,421.74 3,025.12 ------

Scheme Administration | 38 Scheduled Bodies Millbrook Healthcare (DCC) Millbrook Healthcare (W&PBC) Dorset Valuation Panel The Colliton Club Poole Housing Partnership Police & Crime Commissioner for Dorset Edwards and Ward Stour Valley & Poole Partnership Wareham Joint Burial Committee Wimborne Cemetery JMC Total ScheduledBodies Admitted Bodies 1610 Ltd A P Chant A Q S Homecare Abilities Action For Children Addaction Age UK Bournemouth AECC University College Ansbury Barnardo's Aster/Synergy Housing Group Bridport Museum BH Live Care Quality Commission Care South Care UK 11 Active Members Number of Active Members Number of 24,540 1,330 119 112 96 31 73 42 0 4 2 0 2 0 0 2 0 0 0 1 0 1 0 0 1 0 6 Pensioners Number of Pensioners Number of 20,794 708 363 23 60 11 31 71 36 48 40 0 3 0 1 0 2 1 4 2 0 0 1 4 1 1 0 Rate Paid % Rate Paid Contribution Rate Paid % Rate Paid Contribution 25.9 16.8 15.8 14.4 14.4 15.9 14.2 21.0 20.5 23.6 16.0 17.1 15.4 14.4 17.4 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Contributions Employer Contributions Employer 5,165,012.76 251,344 .41 620,893.53 454,511.61 152,012.72 371,785.67 367,908.73 29,432.48 15,000.00 35,584.84 30,788.30 4,722 .46 -6,333.70 2,667.81 5,808.77 1,512.36 ------Rate Paid % Rate Paid Contribution Employee Rate Paid % Rate Paid Contribution Employee N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 5.5 6.4 6.4 6.9 6.5 5.5 5.7 6.5 6.7 5.5 6.0 6.6 6.5 6.8 7.9 Contributions Employee Contributions Employee 2,175,772.71 190,179.78 187,935.34 154,713.47 10,401.80 49,681.99 83,386.61 84,932.46 12,751.89 2,348.59 2,080.74 2,991.46 141.51 677.45 352.44 ------

Scheme Administration | 39 Admitted Bodies Churchill Cleaning Churchill Contract Services Churchills (Bearwood) Churchills (Poole) Churchills (St Joseph's) Citizens Advice Bournemouthand Poole Convex Leisure Ltd CSCI DC Leisure Management Ltd Dorset Association of Parish and Town Councils Dorset Community Action Dorset County Museum Dorset Lighting East Boro Housing Trust East Dorset Housing Association Healthy Living Wessex Innovate Services Ltd Interclean Jurassic Coast Trust Links4Learning Lymearts Community Trust Ltd Mack Trading Magna Housing Association Mouchel Magna Housing Group Nviro Limited Places For People Poole Harbour Commissioners Purbeck Housing Trust Sequal Solutions Ltd Signpost Care Partnerships Active Members Number of 46 64 11 0 0 0 0 2 0 0 0 0 2 2 5 0 0 0 2 0 4 0 0 1 0 9 3 0 0 0 0 Pensioners Number of 232 15 32 15 43 68 30 15 2 1 1 1 0 5 2 6 5 1 6 1 0 1 0 1 1 2 0 1 7 2 2 Rate Paid % Rate Paid Contribution 22.5 23.6 23.6 23.6 17.7 21.2 21.5 18.1 17.2 16.6 21.9 17.7 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 N/A Contributions Employer 138,071.27 556,968.05 144,397.38 13,001.43 11,668.94 27,923.79 22,970.21 46,871.98 3,447.94 4,882.12 5,897.06 4,889.30 ------Rate Paid % Rate Paid Contribution 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 N/A 5.5 6.2 6.3 6.7 6.6 5.7 5.8 6.3 6.9 7.6 5.5 6.2 Contributions Employee 129,736.89 40,972.19 28,623.74 10,254.35 3,413.50 3,107.83 7,556.73 1,319.33 6,194.39 1,906.25 1,190.41 424.22 ------

Scheme Administration | 40 2. 1. 3. 4. 6. 5. 7. 8. 9. 11. 10. Wessex Education Shared Services Wessex Water Admitted Bodies Weyco ServicesLtd Signpost Housing Association Weymouth And Portland Housing Advice Signpost Services Ltd Overall Total Total AdmittedBodies Weymouth Port Health Authority SLM Charitable Trust Weymouth SLM Community& Leisure Blandford SLM CommunityLeisure Charitable Trust SLM FoodAnd Beverage Ltd South Dorset Community SportsTrust The Arts Development Company Stonewater Housing Spectrum Group Sovereign Housing Association Two Counties Cleaning

The backdated contributions to be paid in 2019-20. No active members as not set up on Altair until 2019-20. Contributions all under recorded “TEACH Trust” - there is no split for individual schools. Contributions all under recorded “Harbourside Learning Partnership” - there is no split for individual schools. Contributions all under recorded “Wimborne Trust” Academy - there is no split for individual schools. Contributions all under recorded “Ocean Learning Trust” - there is no split for individual schools. Contributions all under recorded “Castleman Trust” Academy - there is no split for individual schools. Contributions all under recorded “Saturn Education Trust” - there is no split for individual schools. There were no active members as at 31 March 2019 as the employer went into administration in October 2018. There were no active members as there was a bulk transfer during 2018-19. There are no active members as the school went back to Dorset County Council 1 payroll from July 2018. 2 Active Members Number of 25,068 528 26 14 27 13 0 0 8 0 0 0 3 6 1 1 4 2 3 Pensioners Number of 22,135 1,341 46 51 15 28 15 47 5 0 6 0 7 2 3 2 1 0 2 Rate Paid % Rate Paid Contribution 19.4 15.3 23.6 13.0 12.0 16.0 16.0 26.6 14.7 17.3 16.3 19.8 N/A N/A N/A N/A 9.5 Contributions Employer 94,290,363.77 106,162.26 119,771.96 350,024.41 178,078.64 23,903 .82 25,386.99 18,241.66 90,308.04 20,224.29 3,929.76 4,935.20 157.98 889.92 - - - - Rate Paid % Rate Paid Contribution Employee N/A N/A N/A N/A 6.3 5.5 6.0 5.5 6.2 6.4 6.2 5.9 6.5 9.3 6.3 9.6 6.0 Contributions Employee 27,921,649.43 27,921,649.43 35,128.01 12,666.39 25,393.75 12,522.73 43,246.65 16,574.29 8,801.63 8,587.80 1,075.41 1,204.84 5,271.34 207.36 91.48 - - - -

Scheme Administration | 41 Fund over the last two financial years. The table opposite shows the Membership in the Scheme Membership Information Administration Scheme Other Deferred Members Pensioners Active Members Membership Summary Membership Summary Membership 10,000 15,000 20,000 25,000 30,000 5,000 0 31 March 2018 31 March 2019 70,951 23,863 21,217 25,871 2018 31 March 71,133 23,930 22,135 25,068 2019 31 March 67 918 -803 Change Pensioners Active Members Deferred Members 0.3 4.3 -3.1 Change %

Scheme Administration | 42 last five financial years. Received and Benefits Paid over the show the history of Contributions The table below and the chart opposite Benefits and Contributions that have left the scheme. starters in the Pension Fund and 5,459 During 2018-19 there were 5,339 new Starters Leavers and During 2018-19 profile as at 31 March 2019. The chart opposite shows the Fund Age 100 years old (8 females and 6 males). 37.1% male, with fourteen pensioners over membership is split 62.9% female and members and 22,135 pensioners. The fund 25,068 active members, 23,930 deferred total membership of 71,133, split into As at 31 March 2019 the Fund had a 31 March 2019 Age Fund Membership Profile of as at Year 2018-19 2017-18 2016-17 2015-16 2014-15 Contributions £M Contributions Member 122,212 119,537 109,146 106,672 105,331 Benefits Paid £M Paid 120,112 113,223 108,075 104,157 100,022

1,000 2,000 3,000 4,000 5,000 6,000 Fund Distributionasat31March2019 Age Contributions Received and Benefits Paid Contributions Receivedand 2014-15 to 2018-19 Benefits 100,000 105,000 110,000 115,000 120,000 90,000 95,000 0 15-19 20-24 2014-15 25-29 30-34 2015-16 35-39 40-44 45-49 2016-17 50-54 55-59 60-64 2017-18 65-69 70-74 * This does not include the dependants 75+ 2018-19 80-84 85-89 90-94 Benefits Paid £M Member Contributions £M 95-99 Pensioners Deferred Active 100+

Scheme Administration | 43 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 Administration Scheme pensioners split between various categories. The table below shows the details of new New Pensioners Details Total Redundancy/Efficiency Normal Retirement Late Retirement Ill-health Retirement Flexible Retirement Early Retirement Actuarial Reduction Title New Pensioners Total Members 1,327 171 133 126 808 37 50 2 Investments Team and the Pension Team. The photograph below includes staff the from Dorset Council’s Treasury and Systems Team. The remaining team is the Treasury and Investments Team. Administration Teams, the Employer Relationship and Communication Team and the three teams which administer the Local Government Pension Scheme - the Technical There are four teams within the Pensions and the Treasury and Investments Team; Staffing

Scheme Administration | 44 • • • • • • • 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 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 the Local Government; calculations and estimates divorce for calculations, outgoing transfer value calculation of service credit 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 • • • • • • • related issues. Committee reports relating to benefits preparation of Pensions Fund prospective employers; ad hoc costings for employers and 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

• • • • • • • • • • 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 of4 full time equivalent staff Advisers and Actuary; liaison with Investment Managers, balances; investment of the Fund’s surplus cash appointment of Advisers and Actuary; 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

Scheme Administration | 45

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) • • • • • • •

investments and accounting issues. Committee reports relating to preparation of Pension Fund Meeting; and the Pension Fund’s Annual Pension Fund Committee meetings 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 targeted work and uses a wider that focuses on more proactiveand developing an approach to regulation

f) e) d) g) h) will be achieved. This policy statement is 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 Thornbury and Yate. Luke Hall, Conservative MP for for the LGPS in England & Wales is The DCLG minister with responsibility New Pensions Minister b) c)

challenges that TPR faces; equipping our staff to meet the schemes; regulatory approachesacrossall enhancing and executing effective effective regulation of master trusts; ongoing automatic enrolment duties; ensuring employers meet their preparing for the impact of Brexit; administration. through improving governance and promoting good trusteeship range of regulatoryinterventions; benefit schemes; effective regulation of defined

Resolution Procedure” (IDRP). official name is the “Internal Dispute it hasn’t been. The complaint procedure’s employer oradministering authority, but decision should have been made by their have a right to use the if procedure a formal complaint They procedure. also for it to be looked at again under the Scheme, they have the right to ask 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 in reproduced full on page 140. www.yourpension.org.uk available on the Fund’s website at and is

Scheme Administration | 46 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 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 ofthe they want to complain about. when they were told of the decision normally within 6 months of the day in writing, and 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  • • • 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 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 Dispute-Resolution-Procedure.aspx Employers/Employer-Guide/Internal- https://www.yourpension.org.uk/Dorset/ for correspondence can be found at: and the IDRP – Employer’s Wording) Procedure (IDRP – Employee’s Guide The LGPS Internal Dispute Resolution 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

Scheme Administration | 47 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 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 .

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 setting out, amongother things, why notice in line with the new requirements fund is required to update their privacy To ensure GDPR compliance, everyLGPS 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 011 3797 or they can be contacted on www.pensionsadvisoryservice.org.uk on the TPAS website at: administrator. Information can be found they cannot resolve with the scheme query that they may have difficulty which scheme in connection with any pension .

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 orientation, religion, belief or age. example; sex, race,disability, sexual on grounds ofgroupmemberships; 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:

Scheme Administration | 48 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 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 and data to the Pensions Team. access where they can submit online forms ‘Your Fund’ a site for employers with secure of new starter records. It also provides requests are responded to and automation the volume of work, ensure any member lifecycle of an LGPS member, monitor license provides the ability to track the by London Pension Fund Authority. This 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 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 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 www.yourpension.org.uk/dorset address is supported by Dorset Council. The web is managed by its own officersand The Fund maintains a website that internet and the Council’s intranet. Investment activities have access to the Pension Fund Administration and All County Council staff involved in

Dorset aim to 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 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: Dorset aim to acknowledge Provided

Scheme Administration | 49 within 10 days of receiving the member’s quotation, guaranteed for 3 months, Out: Transfers member’s formal request for payment. end of the month following receipt of the 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 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: Dorset aim to send details of Dorset aim to send details of Dorset aim to pay a refund by the Dorsetaimtopayarefundbythe Dorset aim to send details Dorset aim to send details

Dorset aim to send details Dorset aim to send details Dorset aim to issue a member types, and for employers.The its own website, with information for all The Dorset County Pension Fund has is of members signed up to this service. very successful,with approximately 25% 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 into Payment: Benefits Deferred 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 received. information required to make payment is transfer is to be made and all of the the confirmation from member that the value within five days of receiving appropriate). Dorset aim to pay a transfer Majesty’s Revenue & Customs (where member’s contracted-out rights Her from request and confirmation of the

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 by members. communications are well very 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

Scheme Administration | 50 Actuarial Information date of this report. LGPS Regulations, as amended, as at the 2019. 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 -26April2019 valuation link. Valuation.aspx Investments-Governance/Strategy- https://www.yourpension.org.uk/Dorset/ can be found on the pension website at The web-link to the Actuary’s Report Prepared in with accordance IAS26 31 March 2019 Pension accounting disclosure as at IAS26 Report Actuary of the Statement Information Actuarial and click on the actuarial service benefits. We continue to participate service benefits. We continue to participate may affect LGPS members’ past or future currently unclear how this judgement the New Judicial Pension Scheme. It is which relates to age discrimination within made for the recent McCloud judgement Please note that no allowance has been 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 • • • Dorset we received from County Council: used the following items of data, which pension accounting purposes we have In completing our calculations for Data sources Valuation data this ruling has been provided to funds. guidance or indication of the likely impact of at the time of producing the report no mechanisms within the scheme, however, the LGPS to understand how this may affect in discussions with the governing bodies of March 2019; and March 2016, 31 March 2018 and 31 estimated where necessary) as at 31 Fund asset statements provided (or Estimated Fund returns based on March 2019; expenditure items for the period to 31 Estimated whole Fund income and purposes; which was carried outforaccounting of the 31 March 2018 IAS26 report for funding purposes and the results March 2016 which was carried out The results of the valuation as at 31

Actuarial Information | 52 membership data, as at 31 March 2016. 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 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 • Pensioners pensioners Deferred Actives summary data Member normal service cost. basis, which are not anticipated in the have been paid out on an unreduced for the period to 31 March 2019 that Details of any new early retirements Number 18,673 27,749 26,402 Pensions Salaries/ 419,329 85,599 30,926 £000s age Average 71 46 46 as follows: The estimated asset allocation for Dorset County Pension Fund as at 31 March 2019 is estimated to be 6%. The actual return on Fund assets over the year may be different. The return on the Fund (on a bid value to bid value basis) for the year to 31 March 2019 is Assets payment was £986,600. allowed for at the previous accountingdate. The total annual pension that came into We have been notified of 116 new early retirements during the year which were not administering authority for the year ending 31 March 2019. We requested data on any early retirements in respect of the Fund the from Early retirements Other Bonds Fund Diversified Growth Cash Investment Liability Driven Equities Infrastructure Property Asset breakdown Multi Asset Credit Total 3,033,273 1,525,261 214,353 176,110 401,129 138,741 384,500 181,509 11,670 £000s 31 Mar 2019 100 13 50 13 % 7 0 6 5 6 2,867,378 1,518,319 204,505 379,717 295,377 173,342 106,545 136,206 53,367 £000s 31 Mar 2018 100 13 53 10 % 2 7 6 4 5

Actuarial Information | 53 member’s death. the member or a dependant following a be payable on retirement for the life of are linked to inflation and will normally Fund or their dependants. These pensions be payable in future to members of the as pensions (and lump sums) that may being paid to members of the Fund as well These cashflows include pensions currently the Fund and placing a value on them. projecting future cashflows to be paid from The full actuarial valuation involved with IAS19. using financial assumptions that comply the funding valuation as at 31 March 2016, the value of Fund’s liabilities calculated for at 31 March 2019, 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 to estimation techniques. likely to be different that from shown due the Fund assets as at 31 March 2019 is necessary. The final asset allocation of We have estimated the bid values where 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 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 of the Fund has been broadly in line with results provided that the actual experience not introduce any material distortions in the valuation data to 31 March 2019 should approach of rolling forward the previous However, we are satisfied that the 2019 without completing a full valuation. of the estimated liability as at 31 March It is not possible to assess the accuracy 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 can be found here. and outcome the Ministerial Direction effect 6 from April 2016. Details of this 2018 to implement this with outcome, a Ministerial Direction on 4 December 6 April 2021. HM Treasury published reaching State Pension Age (SPA) before would be extended to those individuals of individuals’ public service pension fully price protectthe GMP element public service pension schemes to concluding that the requirement for service pension schemes consultation, and equalisation of GMP in public published the to its outcome Indexation On 22 January 2018, the Government

Actuarial Information | 54 assumptions figure in Appendix 3. reflected in the Change in demographic of updating to the most recent model is CMI_2015 Model was adopted. The effect 1.5% p.a. At the last accounting date, the adopt a long term improvement rate of additional initial rate, while continuing to parameter of 7.0 and have not applied an have adopted the default smoothing which was released in March 2019. We Mortality Investigation’s model, CMI_2018, to use the latest version of the Continuous improvement projection has been updated previous accounting date, the mortality tables adopted are consistent with the Although the post retirement mortality improvement of1.5% p.a. Model, allowing for a long-term rate of are then projected using the CMI 2018 multiplier of 85%. These base tables adopted are the S2PA tables with a The post retirement mortality tables 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 2018 31 Mar 26.6 24.6 24.8 22.9 2019 31 Mar 28.4 26.2 26.1 24.0 corporate bond corporate yield (where curve the the annualised Merrill Lynch AA rated of the cashflows, discounted using rate, equates to the net present value 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 past service liability duration is 20 years. March 2019. Our estimate of the Fund’s reference to market conditions at 31 These assumptions are set with are as follows: calculate the results in the Appendices The financial assumptions used to Financial assumptions as at Assumptions increases Salary increases Pension Discount rate 2019 31 Mar % p.a 3.90 2.40 2.40 2018 31 Mar % p.a 3.80 2.30 2.55 2017 31 Mar % p.a 4.20 2.70 2.80

Actuarial Information | 55 differences in the indices, based on the is a reasonable estimate for the future RPI i.e. 2.4% p.a. We believe that this which is that it will be 1.0% p.a. below made a further assumption about CPI Index (CPI) rather than RPI, we have to be based on the Consumer Prices As future pension increases are expected the previous accounting date. is consistent with the approach used at to be flat beyond the 40 year point. This implied inflation spot is curve assumed beyond the 30 year point and the BoE yield spot is curve assumed to be flat Merrill Lynch AA rated bond corporate implied inflation As curve. above, the as curve, applying the Bank of England 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 statement of profit or loss. been included within the service cost in the is calculated at £4,614,000. This figure has benefits on IAS19 compliant assumptions The capitalised cost of the additional unreduced early retirement benefits. employees former became entitled to Over the year, we understand that 116 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 curtailments arising as a result of the We have calculated the cost of Curtailments salaries to rise in line with CPI. 31 March 2016 to 31 March 2020 for allowed for a short-term overlay from promotional scale. However, wehave 1.5% p.a. aboveCPI in addition to a Salaries are assumed to increase at accounting date. with the approach used at the previous independent forecasts. This is consistent different calculation methods and recent Graeme MuirFFA Partner 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 • • • the appendices below: year ended 31 March 2019 are set out in The results of ourcalculations for the £2,025,459,000. as at 31 March 2019 is a liability of We estimate that the net liability disclosures Results and analysis on the major assumptions. Appendix 3 shows a sensitivity assets and liabilities during the year; and Appendix 2 details a reconciliation of financial position as at 31 March 2019; Appendix 1 sets out the Statement of

Actuarial Information | 56 to 31 March 2019 for the year reconciliation obligation benefit Appendix 2Asset and * position as at31 March 2019 position Appendix 1Statement financial of £161,724,000 in respect of non-vested obligation. £4,897,008,000 in respect of vested obligation and Present value of funded obligation consists of

Net pension assetasat present the value of defined benefit obligation the balances of opening &closing of Reconciliation Opening defined benefit Opening definedobligation Net liability in balance Net sheet Current service cost Interest cost 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 Closing defined benefit obligation Closing definedbenefit Unfunded pension payments Contributions by Scheme participants and other employers Present value of the defined benefit obligation Fair value of Fund assets (bid value) 31 Mar2019 5,058,732 2,025,459 3,033,273 £000s 31 Mar2018 4,902,826 2,035,448 2,867,378 Mar 2019 Year to 31 5,058,732 4,902,826 £000s (119,777) (292,623) 166,976 123,923 244,872 27,921 £000s 4,614 - - - 31 Mar2017 4,821,680 2,085,683 2,735,997 Mar 2018 Year to 31 4,902,826 4,821,680 (148,237) (111,296) £000s 171,159 133,963 27,371 £000s 8,186 - - - -

Actuarial Information | 57 Appendix 3Sensitivityanalysis £165,768,000. for the year to 31 March 2019 is The total return on the Fund’s assets Sensitivity to Present value of total obligation Sensitivity analysis Other actuarial gains/(losses) Return on assets less interest Interest on assets Fund assets Opening fairvalueof the Fund assets fair valueof of balances closing opening and of Reconciliation Settlement prices received / (paid) transfers in Estimated benefits paid plus unfunded net of employers Contributions by Scheme participants and other Contributions by employer including unfunded Administration expenses Closing Fair value of Fund assets Fair valueof Closing Sensitivity to Pension increases and deferred revaluation Long term salary increase Discount rate Life expectancy assumptions Year to 31 2,867,378 3,033,273 5,147,455 5,069,019 4,961,623 5,246,376 Mar 2019 (119,777) +1 Year (2,307) 92,619 73,149 27,921 94,290 £000s +0.1% £000s - - Year to 31 2,735,997 2,867,378 5,058,732 4,971,742 5,048,519 5,157,839 4,878,009 Mar 2018 (111,296) - 1Year (2,307) 49,217 76,716 27,371 91,680 £000s £000s -0.1% - -

Actuarial Information | 58 Governance Committee Members as at 31 March 2019. Committee Members as at 31 March 2019. The Dorset County Pension Fund Pension Fund Committee Governance Spencer Flower May Haines Mark Roberts John Lofts Colin Jamieson Andy Canning Andrew Turner (Vice Chairman) Peter Wharf (Chairman) John Beesley Committee Member Committee Dorset CountyPensionFund Dorset County Council Borough ofPoole Dorset County Council Dorset District Councils Dorset County Council Dorset County Council Representative Scheme Member Dorset County Council Borough Council Bournemouth Representing

replacing four existing members. Due to Dorset Council elections on 2 May 2019 there are four new Committee Members The Committee Members at the 20 June 2019 Pension Fund Committee are shown below. Front row (left to right): Middle row (left to right): Back row (left to right): Alan Saunders, Peter Wharf, John Beesley, Aidan Dunn. Andy Canning, Andrew Turner,Felicity Rice, Mark Roberts. David Brown, HowardLegg,Ray Bryan.

Governance | 60 Committee meets on a quarterly basis. the management of the Fund’s Assets. The management expert who is not involved in Committee is supported by an investment run and monitoring performance. The policy, overseeing how the scheme is are responsible for making investment one voting Scheme Member representative Poole Councils, one District Councillor and Councillors representing Bournemouth and members, five County Councillors, two Committee. A Committee of elected management of the Fund to the Pension The County Council delegates the Committee Structure attendance by members of the Committee. The table below summarises the meetings which have taken place including Committee Members Attendance Spencer Flower Peter Wharf May Haines Mark Roberts John Lofts John Beesley Colin Jamieson Andy Canning Andrew Turner Committee Member 2018 21 Jun ü ü ü ü ü ü ü û û 2018 17 Sep ü ü ü ü ü ü û û û

2018 22 Nov • • • 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 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 û û 2019 27 Feb ü ü ü ü ü ü ü ü û Total 1 2 3 4 4 4 2 4 4

rights Voting 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) the Pension Fund Custodian; 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 | 61 • • • interests which are to: 2011 regarding disclosable pecuniary the requirements of the Localism Act Councillors are required to comply with Conduct of Code aspx?ID=434 dorsetcouncil.gov.uk/mgCommitteeDetails. Council website at are published on the Dorset County Committee agendas and minutes to members of the public. Pensions Pensions Committee meetings are open Transparency and Accountability available from the clerk); you are asked to use a notification form this must be done within 28 days and entered in your Council’s Register (if not Officer (in writing) and that it has been interest to your own Council’s Monitoring 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://moderngov. 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

Governance | 62 Pension Board as at 31 March 2019. The current membership of the Local Pension Fund created a Local Pension Board. With effect from 1 April 2015 Dorset County County PensionFund for the The Pension Board Dorset Local Luke White Jason Vaughan James Stevens Adam Richens Jeff Morley John Jones Chairman) Paul Kent (Vice- Cattaway (Chairman) Councillor Andrew Member Board Membership Current The Pension Board Local - Dorset Police Employee Representative Councils Partnership Representative - Dorset Employer Scheme Member Representative - Active Scheme Member Council/Borough of Poole - Bournemouth Borough Employer Representative Active SchemeMember Nominated by Unison - Representative - Scheme Member - Dorset Police Employer Representative Dorset County Council Scheme Member- Self-Nominated Retired - Dorset County Council Employer Representative Representing attendance by members of the Board. attendance by members of the Board. which have taken place including The table below summarises the meetings Members The Board Attendance Local last as Chairman. of Wednesday 27 February 2019 was his the Local Pension Board, so the meeting he would also be standing down from not standing at the May 2019 elections, The Chairman announced that as he was Chairman Update Luke White Jason Vaughan James Stevens Adam Richens Jeff Morley Paul Kent John Jones Cattaway Councillor Andrew Member Pension Board 2018 29 Nov ü ü ü ü ü ü ü û 2019 27 Feb ü  ü ü ü ü  û Total 2 2 1 2 2 1 1 2 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 schemes issued by the Pension Regulator. administration of local government pension code of practice on the governance and complies effectively and efficiently with the The Local Pension Board will ensure it • • • to assist the Scheme Manager: 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 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

Governance | 63 • • 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 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 of any of its functions. facilitate, or is conducive to, the discharge power to do anything which is calculatedto 106 (6), the Local Pension Board has the In accordance with Governance Regulation representatives. three scheme member three employer representatives; and and Governance Committee, will be Dorset County Council, via the Standards members of the Local Pension Board, As part of the process for selecting a specific requirement of the regulations. member of the Local Pension Board. This is 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 the Unions, with Unison as lead union. include at least one member nominated by Scheme member representatives shall Borough of Poole. Borough Council and one nominated by County Council, one by Bournemouth One member will be nominated by Dorset around 70% of the scheme membership. employers in the Fund, representing authorities in Dorset, and the 3 largest two Unitary Authorities, as the top tier comprise of Dorset Council and the Scheme employer representatives shall 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 • • • • The is responsiblefor: Pension Board • • • DCPF will contact: asked to nominate their and member, 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 and administration of the Pension Fund; responsibilities for the management members and officers with delegated plan of the Pensions Board and elected 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 seek their nominations; Bournemouth and Poole councils to

Governance | 64 Board/Agenda-and-Minutes.aspx Investments-Governance/Local-Pension- https://www.yourpension.org.uk/Dorset/ Dorset County Pension Fund website at additional reports are published on the Pension Board agendas, minutes and Transparency and Accountability • • • • • • • • the Pension Fund activities. to address finding any from review of Reviewing progress of agreed actions 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 including the administering discretions; revised policies and procedures, Reviewing the implementation of

Governance | 65 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 United Kingdom 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 Committee Dorset of the Members to the Independent Auditor’s Statement Fund Accounts Pension 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 annual report as applicable]. information included in the pension fund other information consists only 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 [insert [Date] Cardiff, UK For and on behalf of Deloitte LLP Ian Howse (Appointed auditor) [Signature] this statement. accounts ([insert date]) 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 statements are consistent with the full In our opinion, the pension fund financial Opinion

Pension Fund Accounts | 67 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 2019 for the Pension FundAccount Year Fund Accounts (18,989) (92,186) (6,237) (2,048) 27,371 92,166 10,908 37,265 £’000 (111) (514) (340) 184 134 942 2017-18 2,868,218 2,735,997 (113,223) (13,654) 119,537 128,152 137,634 132,221 Dealings with members, in the employers others Fund and directly involved (5,413) (6,688) 88,715 48,919 £’000 8,615 8,241 Member contributions Employer contributions Contributions State scheme premiums Transfers in fromother pension funds Transfers to other pension funds changes inthe investments value of investments and of on disposal Profit/(loss) Taxes on income Refunds of contributions from dealingwith members Total additions etc Net return on investments members others and from dealingswith Net additions/(withdrawals) Death benefits Commutations and retirement grants Pensions Benefits benefits duringthe year Net increase/(decrease) for in assetsavailable management expenses Fund including Net additions/(withdrawals) Management expenses leavers of on account Payments to and Closing net assets of the net assets of fund 31 Closing March the Opening net assets of fund 1April Rents properties from Dividends equities from Other investment income Interest on cash deposits property funds Income from Investment Income Fund Account Note 10 11 7 8 9 (17,771) (98,737) (5,404) (3,604) 27,922 94,290 10,439 18,693 £’000 1,109 (260) (296) 481 71 2018-19 - 3,029,952 2,868,218 (120,112) (12,007) (14,345) 122,212 143,208 128,150 173,741 161,734 (5,700) 30,533 £’000 5,938 2,338

Pension Fund Accounts | 68 1,388,985 644,160 448,550 255,830 (3,778) (3,818) 76,486 39,995 31 March 2018 £’000 5,133 7,554 2,895 4,695 (229) 840 920 - 2,860,059 2,857,121 2,868,218 (3,778) (4,047) 12,249 £’000 2,895 840 Pooled investment vehicles Investment assets Overseas equities (quoted) UK equities (quoted) Long term investments Total net investments Other investment liabilities Investment liabilities Other investment assets Brunel Pension Partnership Ltd Private equity Property Long term debtors Derivative contracts Contributions due employers from Current assets Other long term debtors Cash & cash equivalents Net tofundbenefits assets available Deferred income Other current liabilities Unpaid benefits Current liabilities Other current assets Net Assets Statement Note 13 12 13 13 2,104,713 421,913 281,480 103,022 (1,686) (8,330) 31 March 2019 29,469 80,275 £’000 3,781 8,689 1,930 4,222 (120) (534) 395 733 3,025,386 3,024,095 3,029,952 (1,686) (8,984) 12,911 £’000 1,930 395

Pension Fund Accounts | 69 pensionable employees of the Council, pensionable employees of the Council, provide pensions and other benefits for scheme administered by the Council to It is a contributory defined benefit pension - - - following secondary legislation: is administered in with accordance the Service Pensions Act 2013. The fund The scheme is governed by the Public a) General the Fund 1 from April 2019. became the administering authority for government in Dorset, Dorset Council Following reorganisation of local ("the Council") up to 31 March 2019. administered by Dorset County Council Pension Scheme (LGPS) and was 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. Scheme (Management and Investment the Local Government Pension Regulations 2014 (as amended) Savings and Amendment) Scheme (Transitional Provisions, the Local Government Pension amended) Scheme Regulations 2013 (as the Local GovernmentPension - - 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 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 - - sector. following to outsourcing the private undertaking a local authority function organisations, or private contractors charitable and similar not-for-profit Admitted bodies include voluntary, the Fund and the employer. admission agreement between 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 2018 73,169 23,863 21,217 25,871 13,644 11,608 18,426 2,218 1,269 8,950 1,290 8,319 6,872 291 573 Total Members Total Deferred Pensioners 'Undecided' members 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 2019 75,238 23,930 22,135 25,068 13,746 12,155 18,052 4,105 1,234 8,950 1,341 8,639 6,488 297 528

Pension Fund Accounts | 70 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 at 31 March 2016. Currently, employer valuations. The last such valuation was set based on triennial actuarial funding March 2019. 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 2018-19. 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 for the UK public sector. Reporting Standards (IFRS), as amended which is based upon International Financial the United Kingdom 2018-19 ("the Code"), Practice on Local Authority Accounting in prepared in accordance with the Code of 31 March 2019. The accounts have been financial year and its financial position at the Fund's transactions for the 2018-19 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 | 71 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

Pension Fund Accounts | 72 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 16 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 16). 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 20. 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 | 73 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 22). 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 18. Actuarial agreed with the actuary and have been underlying assumptions which are variances based on changes to the This estimate is subject to significant determine the carrying amountofpooled Valuation techniques are used to property funds(Note 16) Freehold, leasehold property and pooled 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 16) investments Private equity the assumptions to be applied. provide the fund with expert advice about of consulting actuaries is engaged to rates and returns on fund assets. A firm 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 19) 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

Pension Fund Accounts | 74 the Fund's assets and liabilities. have short and long term implications for be agreed, but it is expected that this will terms of a final exit agreement are still to exit the EU until 31 October 2019. The 50, which may delay the date the UK will leaders agreed to an extension of article On 10 April 2019 European Union (EU) Brexit period (non-adjusting events). events that after the occur reporting reporting period (adjusting events), and conditions that existed at the end of the 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 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 By type of employer: By type By category: Note 7.receivable Contributions 2017-18 2017-18 119,537 119,537 27,371 92,166 79,464 32,547 18,771 66,550 £'000 7,526 £'000 3,207 3,562 76 - Admitted bodies Other scheduled bodies Administering authority receivable Total contributions receivable Total contributions employers Exit payments from early retirements Augmentation cost of Member contributions Member contributions Total employer employers Exit credits to contributions Voluntary additional Employer contributions recovery) service costs (deficit Contributions re past service costs Contributions re future 2018-19 122,212 2018-19 122,212 27,922 94,290 22,325 68,282 83,016 35,391 £'000 3,575 £'000 3,805 101 7 - during the year. of the management expenses incurred The table below shows a breakdown Note 10. Management expenses of employer: By type Note 9. Benefits payable group transfers to the Fund in 2018-19. were individual transfers, there were no All transfers in other from pension funds funds Note 8. Transfers in fromother pension 2017-18 2017-18 113,223 13,654 67,824 37,408 11,347 7,991 £'000 £'000 1,775 532 Admitted bodies Other scheduled bodies Administering authority Administrative expenses payable Total benefits expenses Total management governance costs Oversight and expenses Investment management 2018-19 2018-19 120,112

14,345 72,131 40,151 11,991 £'000 £'000 7,830 1,745 609

Pension Fund Accounts | 75 the voting rights. The stock income from as a stockholder are retained except for stock held in the portfolio. All benefits The Fund lends UK and overseas equity 19 (£734k in 2017-18). operating expenses of £1,152k in 2018- Rents properties from are shown net of Note 11. 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 consisted of: Investment management expenses 2017-18 11,347 £'000 9,306 442 218 440 941 Performance related fees management fees Investment Custody fees Transaction costs management expenses management Total investment Other fees and costs 2018-19 11,991 10,002 £'000 282 123 771 813 (adjusted downwards) to reflect this. shareholding has been impaired was £395k, and the value of the Fund's Brunel's most recently audited accounts of each fund's shareholding based on at cost at 31 March 2018. The value Fund's shareholding in Brunel was valued by each fund at a cost of £840k. The of Brunel, with share capital invested 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 12. Long term investments secured by total collateral worth £14.4M. loan as at 31 March 2019 was £13.5M lending was £71k. The value of stock on

Pension Fund Accounts | 76 investments as at the reporting date. of the market valuation of the Fund's The following table summarises details Note 13. Investments 31 March 2018 22.50 15.70 8.60 9.00 7.20 2.70 4.80 3.60 0.00 % 245,842 255,830 204,504 136,206 103,281 644,160 448,550 190,746 255,830 204,504 197,712 181,341 136,206 103,281 265,107 401,402 76,486 55,096 35,048 41,438 15,791 14,586 16,771 £'000 840 840 - - - - LGIM (passive UK) Schroders / Unit Trust AXA Framlington / Unit Trust UK Equities - Quoted RLAM / Unit Linked Inv Fund - Life Policy Pooled Vehicles Investment CBRE Global Investors Property (directly owned) Bonds Capital Dynamics Global Secondary Fund V Aberdeen Standard HarbourVest Private Equity Wellington Investec CQS Multi Asset Credit (MAC) LGIM (passive smart beta) JP Morgan / Unit Trust Overseas Equities - Quoted Brunel (active UK) Allianz Overseas Equities - Quoted Wellington Investec Allianz Dorset County Council Brunel Pensions Partnership UK Equities - Quoted Portfolio / Manager /Pooled Vehicle Long Term Investments 613,642 281,480 214,353 139,717 379,228 421,913 374,013 214,353 281,480 221,511 200,402 139,717 281,051 187,596 31 March 2019 80,275 29,469 52,033 32,091 46,925 98,177 14,537 14,932 £'000 1,259 395 395 - - - - 20.20 12.50 14.00 2.70 9.30 7.10 4.60 1.00 0.00 %

Pension Fund Accounts | 77 100.00 31 March 2018 48.70 13.30 Market Value 1.40 0.00 0.00 1.40 3.70 6.10 % 1,388,985 2,857,121 106,545 173,342 379,718 173,342 379,718 39,547 39,995 16,073 14,577 73,581 32,964 1,355 £'000 8,897 920 - Property Vehicle Potfolio/Manager/Pooled Lend Lease Retail Partnership Cash &Equivalents Investments Total -Pooled Insight / LDI Active 16 Fund Infrastructure Barings Asset Management / Non UCITS (PIF) Diversified Growth Funds Liability DrivenInvestment Aberdeen Standard Long Lease Property Fund UK Long Income PropertyFund Standard Life UK Shopping Centre Trust Total Investments Investment Receivables/(Payables) Derivatives IFM / Global Infrastucture Fund Hermes GPE / Infrastructure Fund 2,104,713 3,024,095 103,022 138,742 176,110 401,129 401,129 176,110 31 March 2019 41,792 17,183 13,415 86,845 51,897 Market Value 2,095 £'000 8,255 2,939 733 100.00 69.50 13.30 1.40 0.10 0.00 3.40 4.60 5.80 %

Pension Fund Accounts | 78 currency contracts. currency Fund held the following open forward Management. As at 31 March 2019, the Asset Management and Wellington Fund's global equties managers, Investec 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 15. of Analysis 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 14. Reconciliation Settlement Net at 31 Forward Currency March 2019 Contracts at 31 Open ForwardCurrency March 2019 Contracts Pooled Investment Vehicles 1-6 months Other investment assets Cash & cash equivalents Other InvestmentBalances: Total Securities andDerivatives Forward Foreign Exchange Total Securities Property Private Equity Other investment liabilities Equities - Quoted Equities - Unquoted Net Investment Assets GBP JPY GBP GBP Currency Currency Bought 1 April2018 Value £’000 Local Value 2,815,771 2,814,851 2,857,121 1,388,985 1,092,710 255,830 153,122 (3,778)

39,995 76,486 40,938 13,455 22,143 5,133 000s 920 840 payments Derivative Purch’s & £’000 USD GBP JPY EUR 1,798,585 1,769,053 1,798,585 1,343,933 Currency Currency 361,201 29,532 23,622 40,297 Sold - - - - receipts Derivative Sales & £’000 (1,838,586) (1,832,618) (1,838,586) Local Value Local (1,093,014) (685,171) 1,937,315 (53,046) 199,519 (5,968) (1,387) 25,461 000s 284 - - - - market value Change in £’000 Asset Value (23,751) 143,208 166,959 143,208 90,485 56,966 16,538 £’000 3,415 (445) 740 144 596 - - - - - 2019 31 March Value £’000 2,918,978 2,918,245 3,024,095 2,104,713 103,022 Liability 451,382 281,480 (1,686) 80,275

Value £’000 3,781 733 733 395 (7) (7) - - -

Pension Fund Accounts | 79 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 16. 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 and at 31 March 2018 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 2019 Private Equity 31 March 2019 31 March 2018 Cash & Cash Equivalents Property Pooled Investment Vehicles Private Equity Overseas equities - Quoted UK Equities - Quoted UK Equities - Quoted Total Other investment assets Derivatives Total Other investment assets Derivatives Cash & Cash Equivalents Property Pooled Investment Vehicles Overseas equities - Quoted 1,138,758 558,918 644,160 448,550 103,022 421,913 Level 1 Level 1 39,995 29,469 £’000 £’000 3,781 5,133 733 920 ------1,927,120 1,242,893 1,242,893 1,927,120 Level 2 Level 2 £’000 £’000 ------539,348 478,408 146,092 255,830 177,593 281,480 Level 3 Level 3 76,486 80,275 £’000 £’000 ------3,025,386 2,860,059 1,388,985 2,104,713 255,830 644,160 448,550 103,022 281,480 421,913 76,486 39,995 80,275 29,469 £’000 £’000 3,781 5,133 Total Total 733 920

Pension Fund Accounts | 80 The basis of the valuation of each class of investment asset is summarised below. During the year ended 31 March 2019 there were no transfers between levels 1, 2 or 3 of the fair value hierarchy. Description of Asset Description of investments Market quoted Level 1: pooled investments Exchange traded unit trusts etc. Pooled investments - Level 2: properties Freehold and leasehold Level 3: Description of Asset Description of 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 Basis of Valuation of Basis 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, Key Inputs 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, Key Sensitivities 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 | 81 spreads. The Fund is exposed to and foreign exchange rates and credit equity and prices, interest commodity general from market fluctuations in Market risk is the risk of loss resulting Risk (a) Market made and their associated risks. Adviser on the nature of the investments manager andits from Independent regular reports each from investment Committee. The Committee receives management strategy rests with the Responsibility for the Fund's risk to meet its forecast cash flows. risk to ensure there is sufficient liquidity addition, the Fund manages its liquidity and credit risk to an acceptable level. In risk, interest rate risk and risk) currency reduce exposure to market risk (price this through asset diversification to whole Fund portfolio. The Fund achieves the opportunities for gains across the in the value of the Fund and to maximise minimise the risk of an overall reduction investment risk management is to to members). Therefore the aim of liabilities (i.e. promised benefits payable is that its assets will fall short of its The Fund's primary long-term risk instruments arising fromfinancial Note 17. Nature extent and risks of excluding investmentstemporary and cash deposits. if the market price foreach class of investment had increased or decreased by 15%, The following table demonstrates the change in the net assets available to paybenefits line with their own investment strategies. market. The Fund's investment managers mitigate this risk through diversification in the individual instrument or its issuer or factorsaffecting all such instruments in the or foreign exchange risk), whether those changes are caused by factors specific to as a result of changes in market prices (other than those arising interest from rate risk Other price risk represents the risk that the value of a financial instrument will fluctuate Price Risk (a) (i)Other to asset allocation, which are agreed and monitored by the Committee. Exposure to specific markets and asset classes is limited by applying strategic targets and by gaining exposure to different markets through different investment managers. the portfolio in terms of geographical and industry sectors and individual securities, general, excessive volatility in market risk is managed through the diversification of market risk its from investment activities, particularly through its equity holdings. In 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 2,104,713 103,022 281,480 421,913 29,469 80,275 3,781 Value £’000 733 Change 14.47 15.00 15.00 15.00 15.00 15.00 15.00 0.00 0.00 % Increase 437,787 315,707 42,222 12,041 63,287 £’000 4,420 110 - - (437,787) (315,707) Decrease (42,222) (12,041) (63,287) (4,420) £’000 (110) - -

Pension Fund Accounts | 82 This analysis assumes that all other to pay benefits to scheme members. the value of the net assets available Interest rates vary and can impact underlying financial assets at fair value. 2018 are provided opposite, based on investments at 31 March 2019 and to interest rate movements on those interest rates. The Fund's exposure fluctuate because of changes in market cash flows ofa financial instrument will the risk that the fair value of future to interest rate risks, which represent members. These investments are subject on investments on behalf of scheme the primary purposeofobtaining a return The Fund invests in financial assets for Risk Rate (a) (ii)Interest Cash & cash equivalents Property Pooled Investment Vehicles Overseas equities - Quoted UK equities - Quoted As at31 March 2018 Other investment assets Derivatives Private Equity Total 2,860,059 1,388,985 255,830 644,160 448,550 39,995 76,486 5,133 Value £’000 shown opposite. available to pay benefits by the amount the change for the year in net assets date would have increased or decreased points) in interest rates at the reporting An increase or decrease of 1% (100 basis ended 31 March 2018. on performed the same basis for the year rates, remain constant. The analysis is variables, in particular foreign currency 920 Change 14.76 15.00 15.00 15.00 15.00 15.00 15.00 0.00 0.00 % Increase 422,241 208,348 38,375 11,473 96,624 67,283 £’000 138 - - (422,241) (208,348) Decrease (38,375) (11,473) (96,624) (67,283) £’000 (138) - - Total (LDI) Investment Liability Driven Credit (MAC) Multi Asset Bonds Assets held in pooled investment vehicles: equivalents Cash & cash March 2018 As at31 Total (LDI) Investment Liability Driven Credit (MAC) Multi Asset Bonds Assets held in pooled investment vehicles equivalents Cash & cash March 2019 As at31 760,423 858,221 379,718 136,206 204,504 401,129 139,717 214,353 103,022 Market Market 39,995 Value Value £'000 £'000 7,604 8,582 3,797 1,362 2,045 4,011 1,397 2,144 1,030 £'000 £'000 +1% +1% 400 Change in net Change in net (7,604) (8,582) (3,797) (1,362) (2,045) (4,011) (1,397) (2,144) (1,030) assets assets £'000 £'000 (400) -1% -1%

Pension Fund Accounts | 83 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 2019 31 March As at Total Equity Private Vehicles Investment Pooled quoted equities - Overseas 2018 31 March As at Total Equity Private Vehicles Investment Pooled quoted equities - Overseas

1,207,056 1,284,088 Exposure Exposure 486,410 644,160 781,900 421,913 76,486 80,275 £’000 £’000 Total Total Unhedged Unhedged Exposure Exposure 884,976 932,606 486,410 322,080 641,375 210,957 76,486 80,275 £’000 £’000 Movement Movement Potential Potential 88,498 93,261 48,641 32,208 64,137 21,096 7,649 8,028 £'000 £'000 financial assets. March 2019 is the carrying amountof the The Fund's exposure to credit risk at 31 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

Pension Fund Accounts | 84 that date). representing 83% of total net assets at assets (£2,381M at 31 March 2018 £2,486M representing 82% oftotal net March 2019, liquid assets were 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 fall due. cost available to meet liabilities as they steps to ensure that there is adequate 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 investment vehicles: Assets held in pooled Money Market Funds Bank Deposits Account 31 March 858,221 401,129 139,717 214,353 58,450 44,572 £'000 2019 31 March 760,423 379,718 136,206 204,504 37,100 £'000 2,895 2018 year plus an amount to reflect each year plus an amount to reflect each 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 ending 31 March 2020 are as follows. 2016 valuation for the three year period The common contribution rates set at the valuation calculated as at 31 March 2016. 31 March 2019 were set at the latest Contribution rates for the year ending period 1 April 2017 to 31 March 2020. setting employer contribution rates for the valuation took place as at 31 March 2016, triennial period. The most recent such contribution rates for the forthcoming years for the purpose of setting employer undertakes a funding valuation every three the Fund’s actuary, Barnett Waddingham, In accordance with the LGPS Regulations, Note 18. Funding arrangements 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 2013 valuations are summarised below. applied by the actuary for the 2016 and years to 22 years. The key assumptions recovery period was reduced from 25 82% at the 2013 valuation, and the deficit assessed as 83% funded, compared to At the 2016 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 to pensions in payment Annual rate of increases in pay (short term) Annual rate of increases in pay (long term) Annual rate of increases investments Annual rate of return on Valuation 2.40% 2.40% 3.90% 5.40% 2016 Valuation 2.70% 2.70% 4.20% 6.00% 2013

Pension Fund Accounts | 85 included in, the Fund accounts. do not form any part of, and are not who are members of the pension scheme contributed to AVC plans by employees Prudential and Equitable Life. The amounts Scheme with two designated providers, The Council administers an in-house AVC Contributions Voluntary Note 20. Additional 2018-19. Disclosures to these financial statements out in Appendix D Pension Fund - IAS 26 This valuation as at 31 March 2019 is set benefits in the future. of liabilities to pay pensions and other the Fund accounts do not take account setting employer contribution rates and out on the same basis as that used for year. This annual valuation is not carried and updating assumptions to the current taking account of membership numbers rolled forward to the current financial year, same base data as the funding valuation liabilities, on an IAS 19 basis, using the also undertakes a valuation of the Fund's the Fund's actuary, Barnett Waddingham, In addition to the triennial funding valuation, promised retirement benefits Note 19. Actuarial present value of 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 2018-19. In addition at any given time by the Council and recharged to the Fund administration costsof £1.9M were incurred at 31 March 2019. Management and contributions of £2.6M were accrued as to the Fund in arrears, and March 2019 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 21. Related partytransactions £352k in 2018-19 (£321k in 2017-18). and paid to the AVC providersa total of County Council as employer deducted 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 recovery of tax. 31 March 2019 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 22. Contingent assets,liabilities working for the Fund. for the Fund Administrator's time spent the Council includes a charge of £19,000 Administrator. The £1.9M recharge from Chief Financial Officer, who is the Fund of the Committee and the Council's personnel of the Fund are the members of the Fund. The key management the Committee was a deferred member member of the Fund and one member of of the Committee was a contributing As at 31 March 2019, one member of the Fund as employee contributors. Senior officers of the Council are members

Pension Fund Accounts | 86 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 to be between 0.1% and 3.2% of total LGPS (GAD) has estimated the potential impact The Government Actuary's Department’s may be put in place for the LGPS. uncertainty about the eventual remedy that There remains, however, considerable permission was denied on 27 June 2019. this decision to the Supreme Court but that Government sought permission to appeal sector schemes including the LGPS. The therefore expected to apply to all public The implications of the ruling are 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 for each employer. range from 0.4% to 0.8% of total liabilities assumptions used by GAD. These results main employers in the Fund based on the the estimated impact on liabilities for the Fund’s actuary has therefore calculated could be significantly different. The given fund and its scheme employers

Pension Fund Accounts | 87 Asset Pools (Avon, Buckinghamshire, Cornwall, Devon, (Avon, Buckinghamshire, Cornwall, Devon, 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 Strong governance and decision making; Benefits of scale; Table 1:Expected Costs and Savings from Pooling Case) (as perBusiness • • • In summary: form the Brunel Pension Partnership. Oxfordshire, Somerset and Wiltshire) to Environmental Agency, Gloucestershire, Savings Dorset Fund Costs Ongoing Brunel Set up costs 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 business; with a ten percent share in the Brunel has ten shareholders, each 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 break even by 2021-22. costs, but in Dorset’s case was expected to £74 million. The project would see initial the ten funds, of which Dorset’s share was £550 million over a 20 year period across based on estimated potential fee savings of 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 | 89 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, 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 varianceshows 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 Pool Up Table 2:Investment Set Costs Total UK Active Equities Smart Beta Passive 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 811,276 218,539 227,083 365,654 £'000 31-Mar-19 842,662 187,596 281,051 374,014 Value £'000 Direct £'000 2018-19 ------Variance £'000 Price Indirect 358 299 1,118 -14 £'000 73 273 845 ------Variance Quantity £'000 1,118 £'000 Total 273 845 -26 65 91 0 ------Total Saving Cumulative / (Cost) to date 1,072 1,118 £'000 £'000 133 840 273 845 423 390 18 82 -14 46 0 -

Asset Pools | 90 within the Brunel ongoing costs line, based on the original business case. Savings therefore comprise the custodian costs saved as a result of including them would be met via Brunel post pooling. The realised saving shown under Dorset Fund custodian costs, based on the custodian costs in 2016-17, as it was envisaged these Accounts. The Dorset Fund Savings included in the original business case comprised as ongoing Brunel costs, although they are separated out in note 13 of the Statement of The above table includes custodian and performance measurement and reporting costs Table 4:Expected vs ActualCostsand Savings to Date is provided in the following table. A summaryofthe 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 1,066 £'000 1,066 Budget 0 0 0 0 To date 1,183 £'000 1,183 2017-18 0 0 0 0 In Year 1,072 £'000 1,072 Actual 0 0 0 0 To date 1,072 £'000 1,072 0 0 0 0 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 • • • as follows: original business case are summarised The most significant variances from the originally estimated. the Brunel company are higher than result, the ongoing overhead costs of service required by their clients. As a business case, in order to deliver the those envisaged by the original required by Brunel over and above Additional resources have been lower than expected; mandates were also significantly Transition costs for the passive was anticipated to be at year end. case for 2018-19, as the transition had been included in the business savings for the active equity portfolios now transition until 2019-20. No fee case, whereas these assets will not 2018-19 in the original business equity portfolios being included in transition costs for global active are lower. This is partly a result of The transition costs for 2018-19 years; investment returns over the last three due to the higher than anticipated as a result of higher asset values Fee savings in 2018-19 are higher

Asset Pools | 91 Other Material knowledge and skills. 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 responsibilities allocated to them. and skills to discharge the duties and fully equipped with the knowledge regard to the pension scheme are 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 and responsibilities effectively. skill necessary forperformingtheir duties they achieve the level of knowledge and (whether members orofficers) to ensure oversight of public sector pension funds involved in the management and There is a requirement forall 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 | 93 • • • • • • • in 2018-19 including: were provided to committee members on a number ofinvestment classes properties were visited. Traning sessions CQS whilst a tour ofrecently purchased Fund from managers Investec, IFM and held in London. There were presentations Pension Fund Committees when they are training purposes the day prior to the Two furthermeetings were held for attendance at conferences and seminars. managers in addition to individual at various meetings with investment During 2018-19 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 Private equity. Property; Infrastructure; Global equities; Smaller companies equities; Multi asset credit; Coporate bonds;

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 pooling and governance matters. received training in relation to investment In addition, Committee Members

Other Material | 94 (or asset classes). between different types of investments The apportionment of the Fund’s assets Asset Allocation discretion. allowed into the Fund at the County Council’s These are employers who have been Admitted Bodies contributions to the Scheme’s AVC provider. to supplement their pension by paying extra AVCs are paid by a contributor who decides Additional VoluntaryContributions (AVCs) which the employing bodies must contribute. with the liabilities and prescribes the rates at report, which compares the Fund’s assets produces a report, known as the actuarial of the Fund every three years. The Actuary the Fund and reviews the financial position 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 Glossary of Terms and Wiltshire. Gloucestershire, Oxfordshire, Somerset Devon, Dorset, Environment Agency, are: Avon,Buckinghamshire, Cornwall, the funds. The funds in the partnership implement the strategies on behalf of by the ten administering authorities will strategy; BPP Ltd, a company owned responsibility for setting investment assets. The individual funds will retain the management of their investment A partnership of ten LGPS funds to pool Brunel Pension Partnership (BPPLtd) bonds (gilts). generically to corporate bonds or government loan at an agreed later date. The term refers or a company) which undertakes to repay the Loans made to an issuer (often a government Bonds the fund than the benchmark. agreed percentage better performance from Usually a target is set which requires an reflects the requirements of the trustees. series of appropriate indices is chosen which management performance is judged. A A measure against which pension fund Benchmark balances and debtors. holds. They include investments, bank These are everything that the pension fund Assets will be worth on retirement. that has been applied and how much they have accrued and any pension increase Statement which shows the benefits you member you will receive an Annual Benefit not yet receiving a pension. As a deferred stopped paying into the scheme but is A deferred member is one that has Deferred Pensioners 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 influence management. shareholders and how shareholders can maximum importance to the interest of its company ensures that it is attaching Issues relating to the way in which a Corporate Governance trades or other transactions. guarantee against the value of a specified of one counterparty to another, and held as a An asset (cash or securities) posted from Collateral

Other Material | 95 paid into the Fund. level falls below 100%, more will need to be can be paid out of the Fund. If the funding The percentage of the Fund’s liabilities which 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 Fund ofFunds the pension fund. The person who is responsible for managing Fund Administrator shareholders’ meetings. of the company and are entitled to vote at Shareholders have an interest in the profits companies traded on a stock exchange. Ordinary shares in UK and overseas Equities more established markets. tend to be more volatile than those in 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 resulting in the delisting of public equity. engage in buyouts of public companies, directly invest in private companies, or that composed of funds and investors that on a public exchange. Private equity is Private equity is capital that is not noted Private Equity or index returns. seeks to attain performance equal to market A style of investment management that Passive Management someone retires. and payments that are due to be paid when Pension liabilities are the pension benefits 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 Government Pension Scheme, LGPS water systems. highways, bridges, schools and sewer and support residential development, including The public facilities and services needed to Infrastructure

borrower and voting borrower rights are lost. ownership are also transferred to the a security is loaned, the title and the cash, security or a letter of credit. When to put borrower up collateral, whether or firm.Securities lending requires the derivative or other security to an investor Stock lending is the act of loaning a stock, Stock Lending the Scheme. has a statutory obligation to participate in body within the scheme’s regulations and A scheduled body is a statutorily defined Scheduled Body

Other Material | 96 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 includes representatives of 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 reasons for not complying”. extent that it does not so the comply, the Secretary of State and, to the complies with guidance given by or the absence of a delegation, “the extent to which a delegation, 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

Appendices | 98 3.1 3. 2.6

relevant regulations set by the CLG. made by the Committees and any working within the policy decisions delegated to the Fund Administrator administration of the Fund is Fund Committee The day to day Pension scheme to the Pension aspects of the management of the County Council has delegated all out below.Underthis system the governance structurethat is set 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

Appendices | 99 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. However in 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

Appendices | 100 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 any connected scheme; administration of the Scheme to the governance and any other legislation relating 5.4 5.3 5.2 employers; Dorset County Council, 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 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,

Appendices | 101 (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  

Appendices | 102 (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

Appendices | 103 (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

Appendices | 104 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

Appendices | 105 (a) Principle G –Access (c) (b) (a) Principle F-Meetings(frequency/quorum)

 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 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 (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 

Appendices | 106 (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) 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 Reason fornon-compliance (Regulation 73A(1)(c) 1997 Regulations): Not Compliant Not Compliant

Fully Compliant Fully Compliant   Not applicable Not applicable

Appendices | 107 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. (ISS) March2018 Statement Strategy Investment Appendix 2

for ensuring suitability of investments for ensuring suitabilityofinvestments Investment strategy andthe process Introduction together with tolerances by which the together with tolerances by which the is set out in the table on this page, current target strategic asset allocation 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 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 agreement by the Committee: actual allocation can vary without further 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% - -

Appendices | 108 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.

Appendices | 109 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, measure and 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

Appendices | 110 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,

Appendices | 111 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, Investment.aspx Investments-Governance/Responsible- http://www.yourpension.org.uk/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

Appendices | 112 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

Appendices | 113 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 LGPS members. qualifying employers and ultimately the administering authority”) on behalf of out by Dorset County Council (“the 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 Report Pension Administration Strategy Appendix 3 appropriate following a material change statement and make revisions as The Fund will review this policy Review Employers www.yourpension.org.uk/Dorset/ Pension Fund website for day-to-day use; Employers’ Guide on the Dorset County to replace the information provided in the Regulations set out below nor is it intended any provision or requirement of the circumstances does this strategy override reviewed annually by the Fund. In no Pension Administration Strategy will be 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,

April 2014. of Dorset County Pension Fund 1 from apply to all existing and future employers 2013 and, as such, the contents of which Fund Committee on the 21 November considered and by approved the Pension This document has been presented, section Performance on page 123. 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. in its policies in relation to any of the

Appendices | 114 • • • 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 four 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 employer’s

Appendices | 115 the following tables: Standards Performance are held within 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 record of 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 up-to-date 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 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 electronic interface or approved paper form. Team each month with details of their start date by 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 within the Regulations. within thirteen weeks of joining the LGPS, as stated Certificate and forward to member's home address, from the member and to produce a Membership working days of receipt of all the relevant information To apply for any Transfer Value details within 10 records on the pension administration system. To accurately record and update associated member Fund's Responsibility

Appendices | 116 Employer to respond to End of Year queries within 15 working days of request. year and by 8th May in a Valuation year. End of Year contribution return to be sent to the Fund by the 15th May of each Year End of Each employer must ensure that the relevant contributions are deducted, if required. Absence: Conditions of Service: • • • • • • • • • • • • • Status: The changes include: www.yourpension.org.uk/Dorset/Employers/ Employer-Forms.aspx calendar month of the change. Forms can be found at of employees on approved formsorby agreed electronic templates within 1 To ensure that the Fund is informed ofany changes in the circumstances Employers' Responsibility Annual BenefitIllustrations Valuation and n other material period of absence. Any Action Industrial Unpaid leave of absence Mate Date Joined Scheme (if adjusted) Employee Numberand/orPost Number Rate Contribution Remuneration changes due to down grading Contractual Hours Address National Insurance Number Status Marital Change of Name rnity, Paternity and Adoption

within 3 months of member’s request. notify members, where appropriate by the 5th October of the year concerned or To calculate the LGPS member’s Annual Allowance under HMRC Legislation and of that same year. members where the employer has sent end of year contribution return by 15th May To issue Annual Benefit Illustrations by the 5th October of the year concerned for all the employer with regard to specific requirements. system within 30 working days of notification or any shorter period as requested by To accurately record and update member records on the pension administration template for the secure submission of data electronically. To provide forms for recording any key change in circumstances and/or to provide a Fund's Responsibility

Appendices | 117 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 whether an ill health award is to be made and determine which tier 1, 2 or 3. Authorities approved Independent Medical Registered Practitioners (IMRP) To determine based on medical opinion and advice of one of the Administering Employers' Responsibility Ill Health Retirements www.yourpension.org.uk/Dorset/Employers. Further information can be found in the Employers Guide: retirement date. retirement where possible but in all cases no later than 15 working days after To submit the to appropriate form the Fund at least one month before 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 or attaching it to an e-mail. www.yourpension.org.uk/Dorset/ Employers/Employer-Forms To submit a request using the Estimate Request Form, foundon Employers' Responsibility Retirement Estimates www.yourpension.org.uk/Dorset/Employers

by post

benefits the from date of the suspension”. Update the member recordsas becoming a “pensioner member with deferred To calculate and any recover overpayment ofpension benefits. timescales. To calculate and pay required benefits in line with actual retirement Fund's Responsibility retirement. To pay any pension payment on the last working day of each month, following provided all relevant forms and certificates have been received from the member. To make payment of any lump sum within 5 working days of the date of retirement of notification. To issue the member with a letter and retirement information within 10 days Fund's Responsibility retirement estimates without the resource ofFund staff. To provide large employers with the appropriate software to produce estimates without the resource of Fund staff. To provide large employers with the appropriate software to produce retirement separate agreed timescales for bulk requests. To issue the quotations within 15 working days of receiving the request or by Fund's Responsibility

Appendices | 118 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 • • • • • • • 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 month of the event. membership and all other relevant information on approved forms within one To notify the Fund of the employee’s date and reason for cessation of Employers' Responsibility Members Leaving Employment Before Retirement Date and reason for leaving Salary details Last job including job description Date of Birth Payroll Number National Insurance Number Name and Last known address costs within 10 working days of request. To provide estimates of benefits that may be payable and any resulting employer deferred benefits updated by accrued annual pensions increase award. To provide former members, where possible, an annual benefit illustration of their Issue deferred benefit notification within 2 months of notification by employer. To record and update member records on pension administration system. Fund's Responsibility payment of benefits, the options available and deferred benefit entitlement. To inform members who leave the Scheme, who are not entitled to immediate administration system. To and accurately record update member recordson the pension Fund's Responsibility

Appendices | 119 deductions. of its employees no later than the 19th day of the month following the period of To pay the appropriate AVC provider AVC contributions deducted from payroll 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.yourpension.org.uk/Dorset/employers Further information can be found in the Employer Guide: www.yourpension.org.uk/Dorset/employers a completed Monthly Financial Return form which is available at To ensure that all payments made to the Fund are supported by allowances under an agreed schedule. by the Fund e.g. early retirement strain cost, compensatory added years, injury To re-imburse the Fund for all pension payments made which are not to be borne following the period of deductions. its employees and employer contributions, no later than the 19th day of the month To pay the Fund all contributions deducted from payroll (not including AVCs) of Employers' Responsibility Obligations Financial www.yourpension.org.uk/Dorset/Employers 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

show membership of AVCscheme. To and record update member recordson pension administration system to The Fund will inform employers of any recharge items as they become due. Inform each employer ofany new contribution banding. Regulations 2013. Interest will be charged for late payment as detailed in Regulation 71(4) of the LGPS To allocate the received contributions to each employers record. Fund's Responsibility an appropriate caring manner. options are made available and that the payment of benefits are expedited in To assist employers, employees and their next of kin in ensuring the pension Fund's Responsibility

Appendices | 120 • • • with the overriding legislation, including: LGPS, The Fund and Employers will comply In performing the role of administering the Overriding Legislation Data of Standards change in the Regulations. No later than 6 months after being informed by the Fund of any relevant officers orcommittee of the Employer OR any changes being made and This must be done within 30 days of policybeing agreed by the appropriate Employers Guide, the Discretions template to the Fund. More information can be found in the Policy as required under the LGPS Regulations and provide a copy using Formulate, publish and update (as necessary) an Employer Discretions Employers' Responsibility Policy Discretions www.yourpension.org.uk/Dorset/employers More information can be found in the Employers Guide, payment to the Fund no later than the 19th of the month following deduction. To collect the from employee payroll, contributions and to arrange the prompt Employers' Responsibility ASBCS) Benefits (ARCSand Additional currently in place; any Transitional Regulations the Pensions Act 1995 & 2004; Regulations 1986; (Disclosure of Information) the Occupational Pensions Schemes www.yourpension.org.uk/Dorset/employers • • • • • • • • •

HMRC Legislation and Employment Rights Act 2010; Health and Safety Legislation; the Finance Act 2004; the Age Discrimination Act 2006; the Equality Act 2010; the Freedom of Information Act 2000; the Data Protection Act 1998; Regulations 2006; the Discretionary and Compensation of these. pension awards, flexible retirement and waiving of actuarial reductions on any discretions. This currently includes early retirement (pre age 60), additional the Employer, Fund will not process anything which involves Employers Where the Fund does not have an up to date discretions an policy from change in the Regulations. keep the policies under review and will update within 6 months of any relevant Discretions Policy as required under the LGPS Regulations. The Fund will Formulate, publish and update (as necessary) an Administering Authority Fund's Responsibility member and employers and issue quotations within 10 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 sending any personal data in bulk. Council data security guidelines when The Fund will follow Dorset County Secure DataTransfer • amendments to the above legislation. Department Guidance and any future Current Government Actuaries

Appendices | 121 Estimate requests processed Processing of death grants Processing pensions of survivor 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 ARC Illustrations calculated Deferred benefits calculated Refund Payments Estimates for divorcepurposes 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 15 Days 5 Days 5 Days 5 Days 5 Days 5 Days 10 Days 5 Days 10 Days 40 Days 15 Days Court Ordered requests 30 Days or 21 Days for 30 Days 10 Days 40 Days 15 Days 10 Days 30 Days 10 Days Standard (Working days) published in the Annual Report. Committee and will a summary be be monitored by the Pension Fund and standards will of performance administration, quality measures authorities. Details of the costs of benchmarking with other administering costs and by service performance The Fund will regularly monitorits 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 the Annual Report. Pension Fund Committee and reported in employers will be monitored by the measures performance acrossall The annual figures for the Fund documents have been received. only once all necessary information and In all cases the standard quoted applies Task Standards Performance - Fund Administration

Appendices | 122 apply are provided in Appendix A. services, details of all the charges that The Fund may also charge for other additional costs arising. the Fund will seek to any recover improvement by an employing authority of measures being taken to achieve and performance a lack of any evidence In the event of continued poor level of service into the future. appropriate processes to improve the training and development to put in place provide the performance, necessary employers in identifying areas of poor earliest opportunity, to work closely with measures. The Fund will seek, at the monitor regularly the key performance The Pension Fund Committee will Poor Performance review and recognition of best practice. also provide a mechanism for service level early engagement with employers and This approach to reporting will facilitate measures as shown below. quarterly reporting on key performance employer consultation, arrangements for Strategy the Fund will develop, with As part of this Pensions Administration Employer Performance Reporting These may include fines imposed by the will the be from recovered employer. by the performance employing authority of administrative failures or poor incurred by the Fund as a consequence Any third party costs or regulatoryfines Number of complaints Number received:1 Performance 2018-19 - report for period:April2018-March 2019 Total Deaths Correspondence Refunds Deferred Benefits Retirements Estimates Employer Estimates Employee Transfers Out Actual Transfers Out Transfers In Actual Transfers In Quote Top 12 detail -casescompletedontime Admissions Completed in period 23,904 5,359 2,419 3,025 2,460 1,130 7,107 302 483 207 340 270 802 distribution costs. charges and additional printing and fees, legal fees, third party computer additional charges in respect of actuarial Courts or the Pensions Ombudsman and Performance 100.00 100.00 100.00 97.42 99.79 99.42 98.15 98.70 96.62 96.47 99.26 99.00 93.30 % KPI (days) 30 15 40 15 15 10 10 20 15 30 5 5 Cases completed on time or early 23,287 5,348 2,405 2,969 2,428 1,130 6,632 302 483 200 328 268 794

Appendices | 123 April 2018-March 2019, continued 2018-19 Performance - report for period: Correspondence Deaths Refunds Deferred Benefits Retirements Retirements Estimates Employer Estimates Employee Transfers Out Actual Transfers Out Transfers In Actual Transfers In Quote Admissions Top 13 detail -Average elapsed time receipt for casescompletedwithin6monthsof Total Correspondence Deaths Refunds Deferred Benefits Retirements Estimates Employer Estimates Employee Transfers Out Actual Transfers Out Transfers In Actual Transfers In Quote Admissions Top 12 detail -Casescurrently over 6monthsold Total cases 5,359 2,419 3,025 1,487 2,454 1,130 7,107 302 483 207 340 270 802 Average elapsed time 63 64 55 56 11 69 52 79 30 30 35 2 4 Total cases Target 6,601 1,651 1,688 112 593 603 836 207 409 280 57 87 78 44 28 23 53 53 23 23 64 64 10 10 9 2

Appendices | 124 • • The statement outlines the Fund’s policy on: Communications Policy Statements Policy Associated • • • • • Fund will: In dealing with the poor performance of distributing such information; The format, frequencyand method representatives and employers; Information to members, published Annual Report. administration report in the Fund’s meeting and part may form of the Committee at the next available of recoveryto the Pension Fund will report any claim for the cost poor performance; in resolving the specific area(s) of taking account of time and resources 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 • • • employing authority to: The LGPS Regulations require every Employer Discretions Investments/Responsible-Investment https://www.yourpension.org.uk/Dorset/ Dorset County Pension Fund website: The policy can be accessed on the the delegation. structure and operational procedures of delegation and the terms of reference, This statement sets out the scheme of administration of the Fund. powers and duties in respect of its the Pension Fund Committee various Dorset County Council has delegated to Governance Policy Scheme/Publications www.yourpension.org.uk/Dorset/In-the- Dorset County Pension Fund website: The policy can be accessed on the • 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 employing authorities. prospective members and their The of the promotion Scheme to (1). Exchange of information - Regulation 80 Documents Strategy To PensionsAdministration Regulations 2013 Excerpts Related Government Local PensionScheme Scheme https://www.yourpension.org.uk/Dorset/ Pension Fund website: can be found on the Dorset County Fund Administering Authority Discretions A copyofthe Dorset County Pension • • • administering authority to: The LGPS Regulations require every Authority Discretions Administering Employers https://www.yourpension.org.uk/Dorset/ found in the Employers Guide: A list of the Employer discretions can be decisions) or byan adjudicator under regulation 72 (first instance decisions made by the employer administering authority of all 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 inform the appropriate

Appendices | 125 (3).  (2). the Scheme year - has been an activemember during each employee in respect of who authority details giving the following to the appropriate administering employer must give astatement each Scheme year, each Scheme Within three the months of end of that information if asked to supply it. authority must give that employer employer’s Scheme functions, that dischargingemployer for that is required by the person’s Scheme b) 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 a) If - discharging its Scheme functions. information as it requires for b) concerning members;and for adjudication of disagreements) under regulation 74 (applications appointed by the Scheme employer information about that decision an administering authority makes give that authority such other (4). 

(additional voluntary contributions). or employerunder regulation 17 f) (additional pension contributions); or employerunder regulation 16 e) pensionable pay; in relation to the employee’s d) reduction in contributions) applied; while regulation 10 (temporary employee contributions deducted c) applied; while regulation 9 (contributions) employee contributions deducted b) a) paragraph (3)(d) is - The required information by is specified in paragraph (4). question each for employment which employee for the Scheme year in d) active and member; which the employee has been an relating to each employment in c) national insurance number; b) a) any contributions by employee any contributions by employee any contributions by the employer the pensionable pay received and the pensionable pay received and the dates of active membership; the information relating to the a unique reference number the employee’s date of birth and the employee’s name and gender; (2). (1).  Regulation 59 - Pension administration strategy out their Scheme functions by - are expected to achieve in carrying authority and its Scheme employers which the performance administering b) employers”); administering authority (“its scheme in relation to which it is the communication with employers a) The matters are - it does so,paragraphs(3)to(7) apply. administration strategy”) and,where considers appropriate (“itspension mentioned inparagraph (2) asit relation tosuchofthe matters of the authority’s policiesin prepare awritten statement An administeringauthority may and its Scheme employers comply that the administering authority c) procedures which aim to secure appropriate. administering authority considers iii. such other means as the associated matters; or about levels and of performance ii. the making of agreements targets; i. the setting of performance the establishment of levels of procedures forliaison and

Appendices | 126

reports dealing with - administering authority of annual f) established under sub- paragraph (b); 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 the administering authority may e) to those functions; to each other of information relating authority and its Scheme employers communication by the administering d) performance; with any agreement about levels of respect of those functions and with statutory requirements in as it considers appropriate; and its pension administration strategy ii. such other matters arising from sub-paragraph (b), and established performance under have achieved the levels of and its Scheme employers i. the extent to which that authority the publication by the the circumstances in which procedures forimprovingthe (5).  (4). (3).  strategy as revised. b) strategy; and a) publish - An administeringauthority must persons asitconsiders appropriate. its scheme employers andsuchother administering authoritymustconsult administration strategy, an making revisionstoitspensions In preparingorreviewing and matters contained in the strategy. in its policies in relation to any of the appropriate following a material change b) strategy under review; and a) An administeringauthority must - for inclusion in that strategy. considers appropriate, to be suitable and such other persons as it consulting its Scheme employers the administering authority after g) where revisions are made to it, the its pension administration make such revisions as are keep its pension administration such other matters as appear to (2).  (1).  - Regulation70 employer’s levelofperformance Additional costs arisingfrom Scheme (8).  (7).  (6).  employer stating - give written notice tothe Scheme The administering authority may under these functions Regulations. performance incarrying outits that employer’s levelof of from aScheme employer because which should be costs recovered authority, it hasincurredadditional an administering of the opinion This regulation applies where, 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 pension administration When an administeringauthority

Appendices | 127 authority’s administering the (a) (2). (1). - Regulation71 employers by Scheme on late payments Interest

 (b) under regulations 67 (employer’s under regulations 67(employer’s The date onwhichanyamount due on thatamount. payments) isoverdue topay interest to 70(employer’scontributions or payment isdueunderregulations 67 Scheme employerfromwhich any require aScheme employer orformer An administering authority may (c)

 mentioned in paragraph (1); reasons for formingthe opinion or (b). the matters in sub-paragraphs (a) decision to give the notice and to strategy which are relevant to the regulation 59, the provisions of the administration strategy under authority has prepared a pension where the administering amount is calculated; and basis on which the specified respect of those costs and the administering authorities) in by Scheme employers to regulation 69(1)(d) (payments employer should pay under has determined the Scheme the amount the authority the Scheme member. associated parties - not least of which pieces of information to the various should meet in providing certain standards that Pension Schemes Overriding legislation dictates minimum (4). (3).   monthly rests. payment andcompoundedwiththree- from the due date tothe date of above base rateonadaytobasis must be calculatedatone per cent payableunder thisregulation Interest 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 administering authorityforpayment. month fromthe datespecified bythe of performance) isoverdue isone arising fromScheme employer’s level payments), 70(additionalcosts contributions), 68(employer’sfurther

Appendices | 128 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 15 working Valuation year Failure to provide the Fund with the End of Year contribution return by 15th May or 8th May in a deduction of the contributions Failure to pay over the monthly contributions to the Fund by the 19th 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- within 1 month of the change Failure to notify the Fund of changes in status, conditions of service and absence of employees 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 is received after required date to date return £50 per working day from England Base Rate plus 1% basis equal to the Bank of Interest calculated on a daily £250 per case Regulations 2013 with Regulation 71 of the LGPS Interest calculated in accordance £50 per case £50 per case £50 per case £50 per case Charge

Appendices | 129 • Notes toCharging Schedule Web: [email protected] Email: Fax: Tel: Dorset DT1 1XJ County Hall,Dorchester Dorset CountyPensionFund Write to usat: details Contact • Employer’s Guide: give full information as detailed in the retirements and death in service must changes, absences, leavers, Notifications of new starters, due. be liable for the payment of any interest information to the Fund, the Fund will member’s representative to provide the by the scheme member or scheme grant occurs as a result of a failure If late payment of a lump sum or death compounded with three-monthly rests. due date to the date of payment and rate on a day to day basis from the calculated at one per cent above base 2013 states that interest must be Regulation 71 of the LGPS Regulations org.uk/Dorset/Employers www.yourpension.org.uk/dorset 01305 224049 01305 224845 www.yourpension.

Appendices | 130 • pension liabilities and in particular to: Fund’s to approach meeting employers’ The purpose of the FSS is to explain the Statement the Purpose of Funding Strategy guidance issued by CIPFA. been prepared with regard to the 2016 of Investment Principles (SIP) and has Strategy Statement (ISS)/Statement conjunction with the Fund’s Investment This statement should be read in the Dorset County Pension Fund (the Fund). administering authority, for the funding of Council’s strategy, in its capacity as Regulations) and describes Dorset County Pension Scheme Regulations 2013 (the Regulation 58 of the Local Government It has been prepared in accordance with (FSS) for the Dorset County Pension Fund. This is the Funding Strategy Statement Introduction June 2017 - Statement Funding Strategy Appendix 4 liabilities are best met going forward; identify how employers’ pension fund-specific strategy which will Establish a clear and transparent • The aims of the Fund are to: the purposes of Aims and Fund in the funding basis. employers’ contributions and prudence 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 • • • liabilities as they fall due; resources are available to meet all effectively and ensure that sufficient Manage employers’ liabilities funding those liabilities. Take a prudent longer-term viewof met; and term cost efficiency of the fund are that ensures the solvency and long- scheme benefitsmember in a way meet the future liability to provide requirements to set contributions to Ensure that the regulatory Regulations; as defined in Regulation 62(5) of the primary contribution rate as possible, maintaining as nearly constant a Support the desirability of

• • • • The the purpose of Fund isto: • • management of this. received, and facilitate the and Accumulate invest money values and investment and income; Receive contributions, transfer administering the Fund; Meet the costs associated in provided under 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 This 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

Appendices | 131 • • • • • 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 liabilities. management of each employer’s Ensure effective and efficient Ensure the solvency of the Fund; and the lifetime of the Fund; and met as and when they fall due over Ensure that pension benefits can be cost efficiency objective; 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 benefit payments from the Fund; will be sufficient to meet all future that will build up a fund of assets that Set levels of employer contribution • • • • • • administering authority are to: The main responsibilities of the Pension Fund is Dorset County Council. The administering authority for the administering authority The as follows: process and their responsibilities are The key parties involved in the funding Key parties 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 Regulations; members as stipulated in the Pay the benefits due to Scheme due; liabilities as and when they become sufficient cash is available to meet Invest the Fund’s assets ensuring stipulated in the Regulations; amounts due to the Fund as investment income and other and employer contributions, Collect and account foremployee Operate the Fund;

• • the administering authority, are to: that participates in the Fund, including The responsibilities of each employer admission bodies, participate in the Fund. a number of other employers, including In addition to the administering authority, Individual employers • • • • • 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 Actuary to 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 and and Scheme Employer; dual role as both Fund administrator conflict of interest arising its from Effectively manage any potential Prepare the Fund accounts; performance; Monitor all aspects of the Fund’s other interested parties; also the ISS after consultation with Prepare and maintain this FSS and

Appendices | 132 • • responsibilities of the Fund Actuary are to: Barnett Waddingham LLP. The main The Fund Actuary for the Fund is Fund Actuary Local Government. by the Department of Communities and make contributions into the Fund as set Active scheme members are required to members Scheme • • • valuations in with accordance the strategy and completion of actuarial Advise interested parties on funding FSS and the Regulations; authority and having regard to the assumptions with the administering cost efficiency, after agreeing Fund solvency and long-term rates at a level to ensure setting of employers’ contribution Prepare valuations, including the ceasing participation in the Fund. Pay any exit payments due on and and procedures; in with accordance agreed policies in respect of early retirement strains, or other additional costs, particularly Meet the costs of any augmentations permitted under the Regulations; and exercise those discretions as Develop a policy on certain discretions reviewed from 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 • • • • • • the Fund. affecting the financial position of Advise on other actuarial matters in advising the Fund; and may be of relevance to his or her role professional requirements which professional guidance or other authority is aware ofany Ensure that the administering required by the Regulations; between valuations as permitted or contributions need to be revised in assessing whether employer Assist the administering authority on the Fund of employerdefault; security against the financial effect authority on bonds or other forms of Provide adviceto the administering exiting the of employersfrom Fund; Prepare advice and valuations on the individual benefit- related matters; connection with bulk transfers and Prepare advice and calculations in FSS and the Regulations; contributions will be sufficient to meet all contributions will be sufficient to meet all ensure that the existing assets and future contributions that should be paid to is to determine the level of employers’ Fund. The main purpose of the valuation of future cashflows to and from the The actuarial valuation involves a projection funding level of 100% over the longer term. scheme’s solvency and to achieve a level sufficient to maintain the pension contribution has to be adjusted to a investment income, and the employer levels of employment, retirements and funding level will fluctuate with changing The funding strategy recognises that the • • two key objectives: contributions and investment income) achieve (via employee and employer The funding strategy seeks to funding objectives are being met. an actuarial valuation to check that the efficiency objective. consideration of the long-term cost rate as is practical, with As stable an employer contribution Regulations; and triennially, in with accordance the by the Fund’s appointed actuary, A funding level of 100%, as assessed

Appendices | 133 employer which no longer permits new employer which no longer permits new staff access to the Fund, or a “closed” “open” employer – one which allows new in particular, whether an employer is an on certain employer circumstances and The funding target may, however, depend liabilities for each employer in the Fund. assets in the Fund to meet the accrued The funding target is to have sufficient that target over an agreed period. levels of employercontribution to meet establish a funding target and then set employers’ contribution rates is to The key objective in determining Funding method sections below. assumptions adopted is set out in the of the A summary methods and was 15.6% of payroll p.a. employer cost of futurebenefit accrual The primary rate required to the cover of £452m. for the Fund, corresponding to a deficit represent 83% ofthe liabilities accrued with the assets of the Fund found to was carried outas at 31 March 2016 The most recent actuarial valuation future benefit payments from the Fund. • • service”). This approach focuses on: completed after the valuation date (“future in respect of service assumed to be valuation date (“past service”) and benefits respect of service completed before the considers separately the benefits in Projected Unit Funding Method which method that is adopted is known as the For open employers, the actuarial funding funding target. in the Fund may also affect the chosen period of participation by an employer staff access to the Fund. The expected contributions is assumed to support contributions is assumed to support in combination with employee the individual employers which, level of contributions required from of the Regulations) which is the rate as defined in Regulation 62(5) (also referred to as the primary The future service funding rate indicates a deficit; and a funding level of less than 100% surplus of assets over liabilities; while level in excess of 100% indicates a and pensions in payment. A funding future increases to members’ pay past service. It makes allowance for assets to liabilities in respect of Fund. This is the ratio of accumulated The past service funding level of the In completing the actuarial valuation it is In completing the actuarial valuation it is Valuation assumptions andfundingmodel amount to be paid in future. either a percentage of pay or as a cash additional contribution expressed as this adjustment will be specified as an surplus or deficit. If there is a deficit, any adjustments for the past service service cost described above and pays are a combination of the future The amounts that the employer then 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 method adopted is known as the For closed employers, the funding cost of one year’s benefit accrual. primary contribution rate represents the in assessing the future service cost, the The key feature of this method is that, the cost of benefits accruing in future.

Appendices | 134 March 2016 was 3.3% p.a. The RPI assumption adopted as at 31 measured by the Retail Price Index (RPI). an estimate of future price inflation as straddling the valuation date to provide index linked gilts during the six months appropriate period from conventional and the average difference in yields over the the liabilities. This is derived by considering period commensurate with the duration of the future level of price inflation over a The base assumption in any valuation is Future price inflation • • valuation can therefore be considered as: The assumptions adopted at the retirement and staff turnover etc. investment returns, rates of mortality, early finances such as inflation, pay increases, the factors affecting the Fund’s future necessary to formulate assumptions about and their current or present value. of benefits and contributions payable determine the estimates of the amount The financial assumptions which will contributions being paid, and of the likelihood of benefits and which are essentially estimates The statistical assumptions present day values. future payments to and the from Fund to requirements it is necessary to discount liabilities and derive future contribution To determine the value of accrued Future investment returns/discount rate made for promotionalincreases. March 2020. An allowance has also been in line with CPI for the period to 31 plus 1.5%, with a short-term assumption adopted as at 31 March 2016 was CPI long-term pay increase assumption price inflation in the longer term. The inflation with pay increases exceeding been a close link between price and pay of pay inflation. Historically, there has make an assumption as to future levels levels at retirement, it is necessary to As some of the benefits are linked to pay Future pay inflation as at 31 March 2016 was 2.4% p.a. assumption. The CPI assumption adopted to the RPI assumption to derive the CPI deduction of 0.9% p.a. is therefore made mainly to different calculation methods. A 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 risk” rather than on an ongoing basis the remaining liabilities on a “minimum so that there are sufficient assets to fund target at the projected termination date, employers may be set to a higher funding The adjustment to the discount rate for administering authority. an adjustment after consultation with the The Fund Actuary will incorporate such employer under Regulation 64. date”), the employer becomes an exiting at that time (the projected “termination members are assumed to have retired if to the remaining liabilities, once all active be made to the discount rate in relation For some employers, an adjustment may March 2016 valuation was 5.4% p.a. rate. The discount rate adopted for the 31 be referred to as the “ongoing” discount The discount rate so determined may six months straddling the valuation date. considering average market yields in the the underlying investment strategy by that is assumed to be earned from estimate of the rate of investment return projected liabilities reflects a prudent The discount rate that is applied to the each Scheme employer. depend on the funding target adopted for The discount rate that is adopted will

Appendices | 135 the cost of benefits as they it accrue, is to build up sufficient assets to meet Whilst one of the funding objectives is Deficit recoveryperiods actuarial valuation report. adopted are included in the latest Further details of all of the assumptions individual employers. circumstances ofthe Fund and/or appropriate to reflect the individual statistics. These are adjusted as mortality rates, are based on national into the valuation, such as future The statistical assumptions incorporated assumptions Statistical straddling the valuation date. conditions during the six months date adjusted to reflect average market the Fund accumulated at the valuation asset value used is the market value of For the purposes of the valuation, the Asset valuation after the termination date. is to minimise the risk of deficits arising employer has exited the Fund. The aim responsibility of the liabilities after the another Scheme employer to take on the if the Fund do not believe that there is period is set equal to the remaining Admission Bodies the deficit recovery cost paid by employers. ForTransferee experience and reduce the interest will provide a buffer forfuture adverse have been used where affordable. This all periods employers. Shorter recovery period of 22 recovery years is used for At the 2016 valuation, a maximum deficit future levels of employers’ contribution. the implications in terms of stability of period of participation in the Fund, and the individual employer and any limited employer’s liabilities, the covenant of significance of the deficit relative to that employer will depend upon the The deficit period foreach recovery over a period of years. include an adjustment to fund the deficit required employers’ contributions will a significant deficit then the levels of Where the actuarial valuation discloses or in deficit. the Fund will normally either be in surplus the actuarial assumptions. Accordingly 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 number of Scheme members is small. common characteristics or where the determining contribution rates to recognise employers are pooled for the purposes of However, certain 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 making one-off capital payments. with the administering authority before their deficit. Employers should discuss rate, or one-offcontributions, to reduce pay regular contributions at a higher requirement, with employers able to employer are expressed as a minimum Deficit contributions required an from not exceeding 3 years. increase may be phased in over a period significantly then, if appropriate, the employer’s contribution has to increase contract period if this is known.Where an

Appendices | 136 pension cost amongst pooled employers. will be some level of cross-subsidy of whilst, recognising that ultimately there contribution levels in the longer term to produce morestable employer The main purpose ofpooling is a pooled rate. contribution rate has been determined as Letting Authority. In these instances, the liabilities have been passed back to the ceased to participate where the legacy Transferee Admission Bodies who have include parent/subsidiaries or former for all the pension obligations. Examples all of the employers or has responsibility understand that the organisation controls employers are those where we employers within the Fund. Connected There are also a number ofconnected • • • • • • • within the Fund: Currently there are the following pools L Poole. SLM Academies; Small admitted bodies; Small scheduled bodies; Borough ofPoole; Bournemouth BoroughCouncil; Dorset County Council; other employers in the Fund having from employer. This is in order to protect the any residual liabilities of the ceasing in the Fund taking responsibility for instances where there is no employer For example, this is likely to apply in those used at the previous valuation. and adopt different assumptions to risk” discount rate based on gilt yields Fund may adopt Actuary a “minimum In assessing the deficit on cessation, the considers reasonable. period which the administering authority for the exit payment to be paid over a ceasing employer, it may be possible payment to be obtained the from possible for all or part of the exit In certain circumstances, if it is not participating employer. transfer within the Fund to another liabilities relating to the employer will parties involved that the assets and administering authority and the other exit payment, unless it is agreed by the be due to the Fund as an immediate the Fund in respect of the employer will termination assessment. Any deficit in Fund will Actuary be asked to make a and becomes an exiting employer, the When an employer leaves the Scheme valuations Cessation and investment strategy. consistency between the funding strategy investment strategy. This ensures assumed return from the underlying valuation is derived by considering the rate that is adopted in the actuarial As explained above, the ongoing discount strategy as set out in the ISS. be achieved by the underlying investment investment return which is assumed to out in the FSS, and the assumed rate of underlies the funding strategy as set ISS relates to the discount rate that The main link between the FSS and the Statement (ISS) Links with the Investment Strategy approved by the Fund Actuary. with reference to a calculation method calculation of these costs is carried out assumes that benefits are payable. The attaining the age at which the valuation wherever an employee retires before required to pay additional contributions grounds ofill health. Employers are for premature retirement except on The funding basis makes no allowance Early retirement costs in the Fund. arise the from liabilities that will remain to fund any future deficits which may

Appendices | 137 decrease/increase the liabilities by 10%, 0.5% p.a. in the real discount rate will speaking an increase/decrease of to the real discount rate. Broadly The valuation results are most sensitive targets. performance strategy failing to achieve their to implement the chosen investment fund managers who are employed being less than assumed and/or the of factors,including market returns strategy. This could be due to a number real terms) that underlies the funding assumed rate of investment return (in investment strategy fails to produce the The main financial risk is that the actual risks Financial risks,regulatory and employer risks. factors including risks, demographic financial, although there are other external majorThe risks to the funding strategy are strategy to meet the funding objectives. strategy and hence the ability of the are risks that may impacton the funding 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 approximately 1%. Fund will reduce the funding level by life expectancy ofall members in the For example, an increase of one year to continuing improvement in longevity. is that it might underestimate the demographic risk to the funding strategy life expectancy. the However, main for a continuing improvement in strategy via the actuarial assumptions Allowance is made in the funding Demographic risks continues to meet the funding objectives. to check whether the funding strategy funding updates between valuations In addition, the Fund Actuary provides related matters. the from Fund Actuary on valuation The Committee may also seek advice strategy. advisers and officers on investment receives advice thefrom independent achieved by the fund managers and regularly monitors the investment returns theHowever, Pension Fund Committee payroll. employer contribution by around 2.5% of and decrease/increase the required 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 Government. invested assets is also determined by the Government. The tax status of the out in Regulations determined by central and employee contribution levels are set The benefits provided by the Scheme Regulatory risks retirements. any additional costs arising early from additional amounts into the Fund to meet that require individual employers to pay retirements; and are procedures in place monitors the incidence of early theHowever, administering authority as a result of early retirements. increase by more than has been planned The liabilities of the Fund can also assumptions are kept under review. Actuary at each actuarial valuation and in the Fund is monitored by the Fund The actual mortality of pensioners

Appendices | 138 employer, with particular emphasis on the long-term financial health of an susceptible events that could affect Fund, particularly those which may be of employers participating in the employers and monitors the position maintains dialogue with participating theHowever, administering authority • • • • strategy including: events could impact on the funding that a number ofemployer-specific the Fund. it Accordingly, is recognised Many different employers participate in Employer risks 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 existing employers. New employers being created out of liabilities; and having fully funded their pension An employer ceasing to exist without close the Scheme to new employees; An individual employer deciding to employer’s membership; Structural changes in an individual necessary. may reviewthe FSS morefrequently if Fund between actuarial valuations and monitors the financial position of the The administering authority also 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 funding and related issues. keeps individual employers briefed on In addition, the administering authority the from Fund actuary when required. obligations to the Fund, and takes advice their continued ability to support their

Appendices | 139 and any overriding legislation, on request, Provide a copy ofthe scheme regulations Pension Scheme are required to: the Government of Local administrators Information Regulations) 2013, Pension Schemes (Disclosure of Personal and Under the Occupational 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 2019. We are continuously looking 25,068 active members as at 31 March currently has 297 scheme employers and The Dorset County Pension Fund Introduction Communication Policy Statement Appendix 5 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 written request. unions within two months of receipt of a beneficiaries and recognised trade prospective members, spouses, previous 12 months) to current members, on request (unless issued within the This information must also be provided practical, within two months of joining. member beforestarting, or, if this is not about the scheme to every prospective Automatically provide basic information to this information. and recognised trade unions are entitled members, their spouses, beneficiaries obtain prospective a members, copy; copy forinspection or details of howto through providing a personal copy, a within two months of the request - either • • • • • Communication Objectives Pension Scheme. changes to the Local Government well informed about current and future to ensure that key stakeholders are and policies in a clear informative style To Pensionscommunicate Legislation Key Objectives material change. version following will be republished any 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

Appendices | 140 members up to date with proposed 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 and aim to provide a high quality service. representatives, through various means and scheme members, former their We with communicate our currentand of Communication Methods • • • - - - communication objectives: To evaluate the effectiveness of our face communication; To engage where possible in face-to- pensions legislation in plain English; To aim to communicate technical - - - Customer surveys. compliments; Monitoring complaints and questionnaires; Feedback our website. of the LGPS; these can also be found on on request covering different aspects Guides, leaflets and are forms available Pension Fund Publications Information regulation or operation as any issues arise. importance, such as changes in scheme sent to members highlighting issues of relevant details. Further newsletters are changes to the scheme and any other 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

Appendices | 141 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. is available to view at all times. It is www.yourpension.org.uk/Dorset and 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 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.yourpension.org.uk/Dorset www.yourpension.org.uk/Dorset

Appendices | 142 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.yourpension.org.uk/Dorset/Employers 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 Employer Relationshipand 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

Appendices | 143 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 Investments/Strategy-Valuation www.yourpension.org.uk/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 -

Appendices | 144 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

Appendices | 145 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

Appendices | 146 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 aspx Accessibility/Privacy-and-Cookie-Policy. www.yourpension.org.uk/Dorset/ accessed here. A copyofthe Privacy Notice can be in with accordance our PrivacyNotice. www.yourpension.org.uk/Dorset Web: [email protected] Email: Fax: Tel: County Hall, Dorchester, Dorset DT1 1XJ Dorset County Pension Fund Write to usat:

01305 224049 01305 224845

Appendices | 147 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 back on 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

Appendices | 148 RREV (Research, Recommendations, of voting rights has been delegated to markets. Responsibility for the exercise seeks to vote where practical in overseas attaching to its UK equity holdings, and The Dorset Fund exercises all votes activity. voting of disclosure and on voting policy Principle 6:The fund shouldhaveaclear basis. decisions is made on a case by case decision to participate in such collective Fund’s own engagement policy. The which are analysed with regard to the LAPFF periodically issue voting alerts, with companies, regulators and policies. coordinates collaborative engagement membership of the LAPFF. LAPFF collaborate engagement is through The Dorset Fund’s principal means of issues on behalf of its members. environmental, social and governance engages with other companies over membership of the LAPFF, which The Fund seeks to achieve this through it can have on individual companies. order to maximise the influence that with other institutional shareholders in The Fund seeks to work collaboratively where appropriate. with other to actcollectively investors Principle 5:The fund shouldbe willing Authority Pension Fund Forum. of activity undertaken through the Local engagement with companies, and details both fund specific information including report and accounts. This will include activity undertaken during the year in the section on voting and engagement stewardship activity through a specific the Fund intends to report annually on Committee annually in future. In addition, statistics available to the Pension Fund periodically, but intends to formally make The Fund discloses voting data activities. voting on their periodically stewardshipand Principle 7:The fund shouldreport votes have been cast. Time reports are available detailing how support the actions of the LAPFF. Real Officers to override the vote of RREV to Voting Policy, howeverit is possible for exercised in with accordance the Fund’s Corporate GovernanceCode.Votes are explanations of compliance with the includes consideration of company in respect of overseas markets. This Manager Pictet Asset Management Electronic Voting) in the UK, and to Fund

Appendices | 149 1.1 ended 31March2019 year Summary ofVoting for the 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 Policy Voting Issues Appendix 7

Fund’s global equities managers. 2018), Investec and Wellington, the equity portfolio and by Allianz (to July services are provided by ISS for the UK the voting process Proxy Voting page 151 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 Code on Corporate Governance. policy complies with the Combined acquisitions and reporting. Each capital, remuneration, mergers and integrity, management, use of of areas which include strategy, setting out voting policy in a number to protect shareholder interest, have been obtained. These seek Policies for each pooled manager Corporate Governanceand Voting policies of each individual manager. and are subject to the voting markets, are held in Pooled Funds the UK, and JPMorgan in emerging November 2018) and in Schroders managed by AXA Framlington (to Wellington. the However, equities Allianz (to July 2018), Investec and Internal Manager (to July 2018), in segregated accounts by the applies to those assets managed The Voting Policy of the Dorset Fund the received from LAPFF. in light of information which may be override any decision made by ISS social responsibility. It is possible to areas and governance, of corporate (LAPFF) which researches into Local Authority Pension Fund Forum The Fund is also a member ofthe 1.6 1.5 1.4 to UK best practice on corporate resolution proposed was contrary or re-election of directors where the abstention the from, appointment there were 39 votes against, or 31 March 2019 for the UK portfolio During the twelve months ended general offer to other shareholders. shareholders without making a shareholders or groupsof and share issues to majority packages, undemanding targets, inappropriate remuneration be independent for their duties, of directors who are required to resolution include non-independence Typical reasons for voting against a during this period. abstained on 23 of the resolutions managers voted against 304 and equities portfolio, and the Fund’s 4,727 individual votes on the global this report. In addition, there were 2019 is shown on page 152 in activity for the year ended 31 March of the A summary Fund’s UK voting the resolutions during this period. against 91 and abstained on 13 of on the UK portfolio,and ISS voted there were 4,377 individual votes During the year to 31 March 2019,

Appendices | 150 1.8 1.7 152 to this report. of responses are included on page respect of these issues, and details collaborating with other investors in also asked whether they were were addressed. They were shares, and how these concerns companies in which the fund held in which they had concerns about year 2018-19, examples of instances for details of voting activity in the Each pooled manager was asked two executives at Group. Aveva and performance retention awards to remuneration reports were due to the reasons for voting against the compensation schemes. The main resolutions relating to salary and against, or abstention from, In addition, there were 54 votes other companies (IWG Plc). being a Chief Financial Officer at two Tobacco) and a non-executive director companies (e.g. British American as well as a director at six other executive director at one company governance, for example, a non- Voting Issues Policy 10. Other 9. with Relations Shareholders 8. 7. 6. Remuneration 5. 4. Accountability 3. 2. Effectiveness 1. Leadership Issue Uncontroversial issues. existing shareholders rights. Changes to the articles of association should not adversely affect Remuneration Committee is able to justify longer periods. Service contracts should be one year rolling unless the targets. Bonus and incentive schemes must have realistic performance directors. Remuneration committees should comprise only of non-executive Code and stock exchange listing requirements. The company should comply with the UK CorporateGovernance justification for the long term benefit of the company. If a proposed dividend is not covered by earnings and there is no clear directors. Audit Committee should consist of at least three non-executive All directors should be subject to re-election every three years. separate to avoid undue concentration of power. The roles of Chairman of the Board and Chief Executive should be Vote for the resolutions. resolutions. Vote against the appointment. Vote against director’s appointment. Vote against director’s appointment. Vote against director’s acceptance ofaccounts. Vote against the acceptance ofaccounts. Vote against the acceptance ofaccounts. Vote against the acceptance ofaccounts. Vote against the appropriate. re-appointments as Vote against the compliance for non Action

Appendices | 151 Market Breakdown 4,377 Proposed Resolutions. Company meetings at which there were This concerns 257 summary Individual Market Guernsey Gibraltar Islands Cayman Bermuda Jersey Isle of Man Ireland Total Kingdom United Switzerland Spain Netherlands Meetings Votable Votable 257 216 12 12 1 3 2 3 5 1 1 1 Meetings Voted Voted 257 216 12 12 1 3 2 3 5 1 1 1 Percentage 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% areas looks set to continue, and they on the agenda. Debate in these 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 Total Routine/Business Environmental, Social and Goverance Directors Salary and Compensation Capitalisation/Share Capital Takeover/Reorganisation/Merger/Disposal Proposal Voted For 4,273 1,909 994 304 860 206 employment holding periods. We advised the new policy did not include post- We also expressed our concernthat company is aligned with shareholders. ensure the long of the term performance be at least 5 years for UKcompanies to 3 years. Our policy states that this should of the Long TermIncentive Plan was only as current form the period performance were unable to support the policy in its Governance Code. We explained that we introduction of the new UK Corporate had introduced on the back ofthe remuneration policy, whichthey Air Partner to discuss their new Air Partner– We engaged with 31 March 2019). the from past 12 months (1 April 2018 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 0 Voted Against 91 50 30 6 0 4 1 Abstained 13 0 0 4 0 9 0 Total Votes 4,377 1,000 1,948 358 864 207 0

Appendices | 152 and considered our feedback, along with and considered our feedback, along with wider workforce. The company went away these increases were not in line with the excessively over the past few years and of these executives have been increasing expressed our concern that the salaries of their CEO and CFO by around 30%. We discuss the proposed increase in salary Zotefoams – Zotefoams contacted us to forwards. going our discussions with the Superdry Board the Board. We look forward to continuing AGM and Julian has been re-elected to resolution consequently passed at the the election of Julian to the board. This the current management, we supported concerns with a series of decisions by had with both parties and given our After considering the discussions we Julian before making our voting decision. management team at Superdry and a number of calls with both the current board at the company’s AGM. We held reappoint himself on to the Superdry Superdry put forward a resolution to Dunkerton, the former Founder/CEO of poor share price performance, Julian Superdry – Following a period of changes to the policy beforethen. AGM if they do not make positive support this resolution at their upcoming the that company we will not be able to voted at 5,932 General Meetings globally voted at 5,932 General Meetings globally During 2018-19 AXA Investment Managers of our fiduciary duty towards our clients. asset managers, it is a fundamental aspect a company and its shareholders, and, as important part of the dialogue between Voting at company meetings is an 31 March2019 Summary ofVotingyear ended AXA Investment Managers incremental increase next year. with the company ahead of the second this year and will continue our engagement felt able to support the salary increase for support of the work of management, we period. Given the positive changes and our the wider work force during the next policy pay reviews will be in line with those of Zotefoams have also confirmed that future by the executives and the Group. subject to continued strong performance salary increase for the second year will be successful execution of their strategy. The arrangements pose to the timely and risks that uncompetitive remuneration delivered, the scope of their roles, and the Executive Directors, the growth they have the first year to reflect the calibre of the decided to weight the increase towards base salary. The remuneration committee a phasing of the proposed increases to us with a new proposal which would see that of other investors. They came back to

- relevant period include: Our engagement priorities during the Investment approach. matters in line with our Responsible environmental, social and governance any emerging concerns including on are an opportunity to discuss and clarify on our clients’ behalf. These meetings to be good stewards of companies held companies in line with our responsibility and monitoring meetings with investee We also hold additional engagement of the regular investor relations programme. management of investee companies as part regular discussions with the board and AXA Investment Managers hold Summary ofEngagement is as follows: General Meetings. The voting summary individual resolutions proposed at 65 At the fund level, we voted on 961 recommendations of company boards. a dissent rate of 42% relative to the one resolution at 2,467 General Meetings, and voted against or abstained on at least - also as part of a collaborative initiative, also as part of a collaborative initiative, climate change strategy directly and Gas, Mining and Utilities sector on their with relevant companies in the Oil and Risks: We continue our engagement Engagement onCarbonand Climate

Appendices | 153 ------can have on the long-term success of can have on the long-term success of the important benefits that diversity experience. This naturally points to with relevant skills, backgrounds and on it having the right mix of directors its oversight responsibilities depends ability of a board to adequately conduct Diversity: We strongly believe that the correct the breach. the Company has not taken action to the UN Global Compact and where of one or more of the principles of practices demonstrably are in breach engagement with companies whose We have a structured and long-term UN GlobalCompactEngagement: Agreement positively in line with the Paris Climate transparent and committing to lobbying have pushed companies to be more help reach Paris goals. As such, we undermining regulation designed to funding lobbying associations Agreement whilst simultaneously the goals of the Paris Climate two incompatible positions – supporting with companies which appeared to have around climate change. We engaged to their corporate lobbying actions engaging with companies with respect lmt Lobbying: Climate systematically important emitters. Climate Action 100+, engaging with We have been We have been Total Routine/Business Reorganisation/Merger/Disposal Remuneration Capitalisation/ Share Capital Dividends Articles of Association Environmental Issues (Shareholder Resolutions) Directors Meeting Formalities Accounts and Auditors Proposal before improving again at board level before improving again at board level hierarchy of senior management, organisation but decreases up the gender balance at the bottom of an effect. This is where there is a broad companies to combat the hourglass also include internal progression within understand that gender diversity should to push for diversity at board level, we is very positive. While we will continue gender representation at board level, diversity issues, particularly in terms of agenda item and the tone regarding Discussing diversity is now a standard the company. at the leadership level and throughout with boards to promote diversity, both companies. We have been engaging

Voted For AXA FramlingtonVotingTables Total Shareholder Management Proponent Total Court Special Meetings Annual General Meetings Meeting Type 950 205 401 156 58 69 41 12 5 1 2 board level. board level. push for increased gender diversity at diversity is to use our voting rights to A further evolution of our policy on engagement or regulatory changes. – but only in response to shareholder Voted Against 6 0 0 3 0 0 0 0 0 3 0 Abstained Total Resolutions Total Meetings 5 0 1 0 0 0 0 0 0 4 0 Total Votes 961 205 408 156 961 960 65 58 72 41 12 58 6 1 2 0 7 1

Appendices | 154 In addition to these priorities, we held the following discussions with companies in the relevant fund Company BP Plc ECO Animal Health Group Plc Royal Dutch Shell Plc Weir Group Plc ITV Elementis London Stock Exchange Group Issue Climate Change Board Climate Change Remuneration Remuneration Board Gender Diversity Action climate change risks. mitigation in relation to the 2 degree global warming targets of COP 21 and general Ongoing engagement asking the company to improve disclosure around strategy and the company continues to grow. Engagement with the Company on the evolution of the composition ofthe Board, as climate change risks. mitigation in relation to the 2 degree global warming targets of COP 21 and general Ongoing engagement asking the company to improve disclosure around strategy and long-term shareholder interests. Engagement on the company’s remuneration policy and practices and alignment with long-term shareholder interests. Engagement on the company’s remuneration policy and practices and alignment with Discussion with the Company on the evolution of the composition ofthe Board. Discussion on the company’s commitmentsto gender diversity.

Appendices | 155 • • • • 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 Appendix 8 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 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 Pension Fund Risk Register Pension FundRisk 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. Risks; Workforce 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

Appendices | 156 A05 A04 A03 A02 A01 A) Financial Risks No accounting standards Failure to comply with FTSE 350 index Failure to track the Benefits increases Member Excessive Inflation Fund. than the assets of the continue to be greater that the liabilities will potential to mean of Members,with the Increasing Longevity Counterparties of Partners and Financial Default and the Risk of Treasury Management Risk Description Open Open Open Open Open Closed or Open Status Risk Administrator Fund Administrator Fund Administrator Fund Administrator Fund Administrator Fund Risk Lead Oct-11 Oct-11 Oct-11 Oct-11 Oct-11 Identified Date the team. developing within cover training events, attendance of CIPFA changes to the Code, Keeping up with staffing cover. balancing procedures; Fund Committee; reporting to Pension monitoring; quarterly during the day; regular would be picked up Incorrect transactions impact ofhigh inflation. to offset some ofthe to hedge inflation risk Driven investments Invested in Liability remains sustainable. the changes so the Fund realistic and factor in actuarial valuations are Locally by ensuring the and contribution levels. the scheme benefits Level by changes to Controlled at a National Risk Register entry. See detailed Corporate risk? manage this How do we currently Controls Current Low Medium Medium Medium Medium Low Medium / High / Risk Current No Change No Change No Change No Change No Change No Change / Deteriorating Improving / Review Since Last Movement Yes Yes Yes Yes Yes controls current on the No, based Yes or i.e. acceptable? level ofrisk current Is the (BPP). Partnership Brunel Pensions transfer to the considered for equities will be managed UK in passively Investment Last Review? Since Highlight to Any Issues None error of portfolio. error analysis of the tracking Bloomberg to allow live Consider the use of level ofrisk to achieveanacceptable actions Further identified property investments. infrastructure and certain asset classes such as in inflation proofed mandate and investment Further expansion of LDI active members. to maintain membership of communications strategy as auto enrolment and adopting policies such Fund of newmembersby sign Encourage up to the critical counter parties. monitoring of business policy and routine treasury management Continual monitoring of On-going On-going actions further for Date Target On-going On-going On-going

Appendices | 157 A08 A07 B01 B) Workforce Risks A06 B02 misappropriation through fraudor Loss of funds investment return the expected rate of Failure to produce staff Health and safety of fund governance ofthe Inadequate duties effectively. to undertake their appropriately trained Board members are members and that Committee requirement to ensure staff. There is also a suitably skilled develop and retain Failure to recruit, Open Open Open Open Open Administrator Fund Administrator Fund Administrator Fund Administrator Fund Administrator Fund Oct-11 Oct-11 Oct-11 Oct-11 Oct-11 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 investment strategy managers; diverse achieved by fund investment returns Committee monitor Pension Fund policies DCC health & safety absence management; trigger interviews; assessments; PDR Work station Pension Board statement; Local observer; LGPS by independent statement, undertaken CIPFA governance PDR; structure review Development / Training; Access to Management Low High Low Low Low No Change No Change No Change No Change No Change Yes Yes Yes Yes Yes of funds. misappropriation against fraud or protections require revised of BPP will establishment The returns. on investment BPP may impact establishment of with the associated Transition costs arrangements. on governance 2018 will impact effect April from of BPP with establishment The investments. of key staff re. against the loss resilience ensure greater of BPP should establishment The potential exposures Continual review of to ensure best fit. regular reviews of strategy and performance risk, and Continuous monitoring of Pensions Regulator. Pension Board and the arrangements including strategies and governance On-going review of None risks planning for key people succession & resilience people; Ensure appropriate in the absence of key staff have ability to cover shadowing and ensure appropriate, via PDRs; Work support this risk, where Training / development to On-going On-going On-going On-going

Appendices | 158 C01 Risks C) Other B03 C02 C04 C03 (IT; building) or staff of Council facilities service, due to a loss Inability to provide capacity workload and staff the balance between Failure to maintain service perception of poor Poor services, or regulations. revised governance of investments, enforced pooling nationally, or of Pension Funds Enforced restructuring personal information confidential and/or and handling of Secure management Open Open Open Open Open Administrator Fund Administrator Fund Administrator Fund Administrator Fund Administrator Fund Oct-11 Oct-11 Oct-11 Sep-15 Oct-11 in place for Altair team. Disaster recovery numbers held for the home/ remotely;contact can be accessed from West Banking facilities critical services; Nat plans maintained for Business continuity 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 procedures reviews; processes and audit; internal audit PDR process; external Service planning and policy. meetings to influence attendance at national of national groups and Proactive membership portal to actuary email; secure payments secure corporately; guidance promoted Data awareness Low Low Low Medium Medium No Change No Change No Change Improving No Change Yes Yes Yes Yes Yes controls in place. extensive risk BPP has its own to establish BPP. The project membership of through its pool investments requirement to meeting the The Fund is business continuity plans. continuity plans. Corporate Regular review ofbusiness capacity is stretched. particular areas where secondments etc. to meet Review potential for None policy. influence government attempt to inform and and national level to engaging at local, regional Officers and members Data Protection training members undertake the Ensure all appropriate team On-going On-going On-going

Appendices | 159

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September 2019