Agenda and minutes

Received from Valerie Easmon-George.

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None.

RESOLVED:

That the minutes of the meeting held on 6 March 2023 be confirmed as an accurate record of proceedings and the Chair be authorised to sign them.

The Board received a presentation from Marie Rosenthal, Interim Director of Law and Governance, and Matthew Hopson, Deputy Director of Finance, on governance training for the Local Pension Scheme. The training was being provided in the context of a review of the Council’s Constitution, which the Interim Director of Law and Governance was conducting for consideration and approval at a Council meeting in July 2023.

The presentation included a background description of the LGPS Pension Board, which had been brought in to improve governance arrangements of all pension funds. The presentation also included an overview of responsibilities and the knowledge and skills set which every member of a Pensions Board must have, governance in practice, membership and proposed new Terms of Reference for the Board.

The Interim Director of Law and Governance highlighted a number of governance issues under the current arrangements, which needed to be addressed. The current practice whereby members of the Board and its Chair were appointed by the Audit Committee was considered unusual in that the Pensions Board should be responsible for electing its own Chair and that it was normal practice for the chairship to rotate annually from employer to member representatives.

Under the LGPS Regulations 2013, members of the Board were required to have “capacity” to represent members and employers of the Scheme.   Statutory guidance interpreted this as a requirement to ensure that the “knowledge and skills of the membership are appropriate” to effectively scrutinise the decisions of the Pensions Sub-Committee. This was a legal requirement. Members of a Pensions Board should also undertake a personal training needs analysis, together with a personalised training plan.

It was suggested that the current Terms of Reference for the Board were too brief and did not capture all of the elements sufficiently from the statutory guidance. Current arrangements saw the Board scheduled to meet at 6.00pm, directly before the Pensions Sub-Committee which started at 7.00pm. This was regarded as insufficient time to allow the Board to scrutinise all elements of Pension Fund administration and investment activity.  The Board currently received only governance and administration reports at its meetings for review, but nothing on investments.  Although not specified in its Terms of Reference, the Board also approved the Annual Report under current arrangements and it was suggested that this was usually reserved for the relevant Pension Fund Committee to consider and approve at similar administering authorities.

In addition, it was considered unusual for the Pension Fund Committee to have responsibility for investments and policies only and not administration and governance, which were reserved for the Pension Board in Islington.  This meant that the Board was not scrutinising all of the work of the Sub-Committee, contrary to statutory guidance.

The Monitoring Officer had made a number of suggested recommendations viz

1. Pensions Board should elect its own Chair and this should rotate between members and employers, subject to capability

2. Pensions Board members should attend mandatory training sessions, which should be listed in the Terms of Reference

3. The  ...  view the full minutes text for item 72.

On behalf of the Board, the Chair thanked Alan Begg for his work in reviewing the format of the Risk Register.

Mr Begg outlined the suggested changes he had made to the draft Register produced by the Pensions Team:

Each risk was now numbered in the left hand column

There were 24 strategic ie not operational risks

Additional wording had been added to each risk

An additional column on “Trend” had been included, which should indicate immediately whether there had been any change since the Register was previously reviewed

The columns headed “Current Risk Score” referred to inherent risks which were to be mitigated by “Current controls in place to manage risk”

Colour coding should be included to provide visual impact

The following points were made during discussion:

·       The column headed “Trend” should be moved to the far right of the table

·       Noted that the Director of Finance would take up with HR Payroll Team the issue of the need for timely provision of payroll data to the Pensions Team to avoid risks associated with that

·       Although this year’s performance had been mitigated with much effort by the Pensions Manager and his Team, it would be necessary to ensure that there were no similar repercussions next year caused by delays in data from HR Payroll Team to the Pensions Team. An update would be welcomed to the Board in October 2023 on progress

RESOLVED:

That Alan Begg be thanked for his work on the Pensions Risk Register and that the points made above be taken on board as appropriate.

In response to a question, the Head of Pension Fund and Treasury Management confirmed that the Fund was forecasted to remain in a net negative cashflow position and would need to draw down on investment income to meet expenditure in the sum of approximately £16m per year.  This had been the case for a number of years.

A suggestion was made that a session on pensions should be included in the Council’s Corporation Induction programme, to ensure that employees were made aware of the rules around auto-enrolment and death grants, amongst other aspects of the Pension Scheme.

The Board thanked the Council’s Communications Team for its campaign to advise and engage staff on AVCs.

RESOLVED:

To note the contents of the report of the Corporate Director of Resources.

Detailed in minute 72 above.