Linconshire Pension Fund report 2023/24

Introduction by Jo Kempton, Head of Lincolnshire Pension Fund

At the end of 2023/24, the value of the fund was £3.4 billion – an increase of £331.3 million from the previous year and a return of 10% on the fund’s investments.

Our Pensions Committee worked hard over the year and details of the meeting agendas and attendance can be found in the main report. The Pension Board continued to provide oversight of the governance of the fund and of the administration function, and concluded that the fund remained well run, as set out in the annual report of the Local Pension Board. Our shared service administration provider, West Yorkshire Pension Fund (WYPF), maintained its usual high level of service to scheme members and fund employers, and paid over £127 million in pension benefits over the year. 

The government's requirement for local government pension funds to pool assets has continued to keep us very busy, with Lincolnshire working closely with the other ten partner funds within Border to Coast Pensions Partnership Ltd. The company has continued to grow as the partner funds have transferred assets, with £31.3bn of assets under management across ten collective investment vehicles, and a further £16.5bn of Private Markets commitments made across seven propositions as at 31 March 2024. LPF has transferred 56.4% of the pension fund's assets across to the management of Border to Coast, with net savings to date of £6.28m.

Stewardship and responsible investment are an integral part of the fund's investment strategy and decision making, and the fund works closely with Border to Coast to ensure that it invests in a sustainable way. Through Border to Coast, and in its membership with the Local Authority Pension Fund Forum (LAPFF), the fund engages with companies on key environmental, social, and governance issues, such as carbon reduction, executive pay, human rights and fair accounting. We were again successful in meeting the requirements of the Financial Reporting Council (FRC) in submitting our Stewardship Code Statement for 2022/23, which can be found on our website at Lincolnshire pension fund Stewardship code 2022-23.

The fund is always keen to hear its members' views on stewardship and responsible investment, or on any other matters about the pension fund. Please email LGPSpensions@lincolnshire,.gov.uk with any comments you may have. Please note – this email address is NOT for any pension benefit queries – please use the normal contact email of pensions@wypf.org.uk.     

This summary gives a flavour of our full Annual Report and Accounts, which we will publish on our at Lincolnshire pension fund - reports and accounts – Lincolnshire County Council.

Please do take a look and let me have any feedback.

Draft fund account*

LGPS membership

There were 80,792 members and beneficiaries (plus 588 undecided leavers) and 262 contributing employers at 31 March 2024. The fund is reasonably mature, with pensioner and deferred members (those that are no longer in the scheme but will be entitled to a pension at some point in the future) making up 67.9% of the overall membership.

Performance

The overall investment return of 10.0% was behind the fund's specific benchmark return of 11.4%. Over the last ten years, the fund’s annualised investment performance of 7.9% is slightly behind of the benchmark return of 8.0%. 

Actual investment performance against the fund's strategic benchmark performance is set out in the table below. The longer-term return is well ahead of the long-term required return of 4.0%, set by the fund's actuary (as per the March 2022 triennial valuation).   

Distribution of investments

The Fund invests across a range of asset classes and geographies, to ensure appropriate diversification of the investments.  The Pensions Committee sets a strategic asset allocation with the long-term aim of meeting the funds objectives to ensure it has enough assets to pay pensions when they fall due.    

The table below shows the actual distribution of the assets at the 31 March 2024 compared to the long-term strategic allocation.