What this consultation is about
Stakeholders in Derbyshire Pension Fund are being asked for their comments on the fund’s proposed:
- investment strategy statement
- responsible investment framework
- climate strategy
Derbyshire Pension Fund is part of the national Local Government Pension Scheme (LGPS) which provides retirement and death benefits for local government employees, and those employed in similar or related bodies, across the whole of the UK. Derbyshire Pension Fund currently has over 340 participating scheme employers and around 93,000 individual members. The primary duty of the pension fund is to pay members’ pension benefits when they fall due.
In the LGPS, members’ benefits are set out in government regulations with the level of pension paid primarily based on length of service and salary. Contributions collected from employees and employers are invested across a range of asset classes, including:
- equities
- bonds
- property
- infrastructure
- cash
These assets generate long term income and capital returns to support the payment of pensions.
Employers meet the balance of the cost of providing benefits over the longer term, and a return seeking investment strategy aims to reduce employer costs. The risk associated with a return seeking strategy is carried by employers and ultimately, in most cases, by local taxpayers. The Fund currently has assets of approximately £5.8 billion.
Investment strategy statement
The investment strategy statement (ISS) sets out the long-term investment strategy of the Pension Fund and includes:
- the fund’s investment objectives
- the strategic asset allocation benchmark
- descriptions of the asset classes that the Fund invests in
- the fund’s approach to managing risk
- the approach to pooling the management of investments with other LGPS funds
A revised ISS has been developed to reflect a new proposed strategic asset allocation benchmark.
Responsible investment framework
The responsible investment framework (RI framework) sets out the Pension Fund’s approach to investment which includes the integration of environmental, social and governance (ESG) considerations into the investment process and Fund stewardship, and governance activities. The RI framework includes examples of ESG factors that are considered as part of the investment process.
Responsible investment is relevant both before and after an initial investment decision, including considered voting on shareholder resolutions and engagement with investee companies.
Climate strategy
The fund supports the ambitions of the Paris Agreement and aims to achieve a portfolio of assets with net zero carbon emissions by 2050.
The climate strategy sets out the fund’s approach to addressing the risks and opportunities related to climate change. It includes targets to reduce the carbon footprint and financed emissions of the fund’s investment portfolio and to increase the fund’s low carbon and sustainable investments.
Consultation
The proposed investment strategy statement, responsible investment framework and climate strategy were presented to the Pensions and Investments Committee on 6 December 2023 and approved for consultation with the fund’s stakeholders. To view the agenda, previous minutes, reports and related documents you can visit the Derbyshire Democracy website.
The Pension Fund’s website includes a Consultation FAQs (Frequently asked questions) page providing additional information which respondents may find helpful.
Stakeholders are now invited to review the documents which are attached to this page and respond to the consultation through the response form on this page.
Accessibility
The documents on this page may not meet accessibility standards, if you require any in alternative formats please email pensions.regs@derbyshire.gov.uk.