Council pension fund soars

Richard Youle, local democracy reporter

The value of a public sector pension fund soared by nearly £8 million per week last year, new figures have shown.

The City and County of Swansea Pension Fund was worth £3.32 billion on March 31 this year compared to £2.9 billion 12 months previously – an increase of just over £400 million, or 12.9%.

The fund’s value had fallen slightly the year before.

The pension fund’s draft accounts for 2023-24, which will be discussed by the committee which oversees it on July 10, said the 12.9% rise in 2023-24 outperformed the average local authority pension fund.

It added that the average increase over the past five years has been 9.4% per year.

Report

The City and County of Swansea Pension Fund has around 50,000 members, just under half of whom are currently paying into the fund.

Organisations which are part of the fund include Swansea Council, Neath Port Talbot Council, the University of Wales Trinity Saint David, Gower College Swansea, and housing provider Pobl Group. Professional fund managers manage it on a day-to-day basis.

Nearly two-thirds of its overall assets are in stakes in overseas companies, known as global equity.

The report going before the pension fund committee said shares in Europe, the UK, Japan, parts of Asia and the USA performed particularly well in 2023-24, and that there was a feeling that central bank interest rates were approaching their peak.

“Information technology dominated, helped by robust earnings results from big US tech names and rising interest in artificial intelligence (AI)-related technology,” it said.

‘Net zero’

The City and County of Swansea Pension Fund is, however, seeking to reduce its reliance in equity and reallocate some of that money into infrastructure, housing, forestry and farmland.

The fund is aiming to be “net zero” in terms of investments by 2037, meaning it reduces investments in carbon-intensive funds and invests more in things like wood-burning and tree-planting schemes.

“Timber land and agriculture demonstrates significant potential to reduce greenhouse gases and to boost carbon storage,” said the report.

A £10 million commitment has been made to a wind farm fund in Wales, and an unspecified amount has been committed to a wood-burning power station at Margam, Port Talbot, which is run by a company called Schroders Greencoat.