Agenda and minutes

Venue: Committee Room One, County Offices, Newland, Lincoln Lincs LN1 1YL. View directions

Contact: Catherine Wilman  Democratic Services Officer

Items
No. Item

24.

Apologies for Absence

Minutes:

Apologies were received from Councillors Mrs S Rawlins and Co-opted Member Mr J Grant.

25.

Declarations of Members' Interests

Minutes:

Mr A N Antcliff declared an interest as an employee of Lincolnshire County Council and a contributing member of the Pension Fund.     

26.

Minutes of previous meetings of the Pensions Committee held on 21 September 2017 pdf icon PDF 65 KB

Minutes:

RESOLVED

 

That the minutes be approved and signed by the Chairman as a correct record.

27.

Independent Investment Advisor's Report pdf icon PDF 85 KB

(A report by Peter Jones, the Committee's Independent Investment Advisor, which provides details on the current state of the global investment markets)

Minutes:

The Committee considered a report by its Independent Financial Advisor, Peter Jones, which provided a market commentary on the current state of the global investment markets.

 

There was discussion about the forthcoming possibility of an interest rate rise, which had already begun in the US, where the economy was already increasing by 3-4% per annum.

 

RESOLVED

 

That the update be noted.

28.

Pensions Administration Report pdf icon PDF 399 KB

(A report by YunusGajra, (Business Development Manager, WYPF), in connection with current administration issues)

Additional documents:

Minutes:

Consideration was given to a report by Yunus Gajra, Pensions Administrator from West Yorkshire Pension Fund which provided a quarterly update on current administration issues.

 

It was reported that the targets for most of the KPIs for the period 1 June to 31 August 2017 had been met, with notable exceptions as follows:

 

·         Deferred benefits set up on leaving – this had not been met due to the target having a lower priority.  Deferred benefits did not require immediate payment;

·         Death on deferred benefits – this had not been met due to a particular member having multiple records which took a while to unpick;

·         Monthly posting – not meeting this target was mainly due to data from some employers not being of very good quality.

 

The Committee was made aware of a backlog of information, from Lincolnshire County Council, relating to leavers from the Fund.  The employer's payroll provider had been asked to produce an improvement plan to alleviate the issue, and the Committee and the Pensions Board would be kept updated.  If the situation continued to decline, Lincolnshire Pension Fund (LPF) may have no choice but to report the issue to The Pensions Regulator.

 

A Committee member asked what impact this issue was having on members and Officers clarified that without the leavers information, West Yorkshire Pension Fund did not know what benefits the leavers in question were entitled to. 

 

It was reported that as at 31 August 2017, 98% of LPF members' Annual Benefit Statements had been printed and despatched.  This was an improvement on last year's production, and showed the good work that WYPF had done.

 

The shared service pension admin cost per member had been £13.85 in 2016/17 and had been generously forecast at £15.05 for 2017/18.  Following a question, it was explained £13.85 was a considerable reduction from the £19 per member that LPF was paying before the shared service agreement. 

 

RESOLVED

 

That the report be noted.

 

 

29.

Pensions Administration Strategy pdf icon PDF 454 KB

(A report by Yunus Gajra, (Business Development Manager, WYPF) in connection with the content of the Pensions Administration Strategy)

Minutes:

The Committee considered a report which presented the WYPF/LPF Pensions Administration Strategy. 

 

The Strategy outlined the processes and procedures that allowed WYPF and employers to work together in a cost effective way, in order to administer the LGPS whilst maintaining an excellent level of service to members.  It recognised that working cooperatively and collaboratively would be the key to achieving these aims.

 

The Strategy also set out the policy and guidelines for employers to use and refer to.

 

Following a question, it was clarified that the LPF organised the annual employers' meeting, rather than WYPF and was usually held at Lincolnshire County Council offices.

 

RESOLVED

 

That the report be noted.

30.

Pension Fund Update Report pdf icon PDF 264 KB

(A report by Jo Ray, (Pension Fund Manager), in connection with Fund matters over the quarter ending 30 June 2017 and any current issues)

Additional documents:

Minutes:

Consideration was given to a report which provided an update to the Committee on Fund matters over the quarter ending 30 June 2017 and any current issues.

 

The Pension Fund Manager highlighted to Members that they needed to complete the TPR Toolkit and send their certificates through to her to enable the Fund to report that all members had fulfilled the requirement.

 

TPR Checklist Dashboard

The TPR Checklist Dashboard was considered and the main points raised were that 98% of Annual Benefit Statements had been issued by the deadline.  This area had now been changed to green from amber.

 

Also, 99.6% of deferred benefit statements had been produced, which met the TPR's requirements.

 

There was a question regarding H5 – Maintaining Contributions – has an annual benefit statement been provided to all members with Additional Voluntary Contributions (AVCs) within the required timescales.  This service was provided directly by Prudential, with no Pension Fund involvement.  It was explained that Prudential held the majority of LGPS contracts for AVCs.  It was agreed that a representative from Prudential come to a future meeting to brief the Committee on their role within the Fund.

 

Risk Register

The Committee received its quarterly update on the Risk Register.  Two new risks had been added to the register:

 

Risk 27 – Failure to meet requirements as a responsible investor across all ESG risks.  This was a low risk and as such was green.

 

Risk 28 – Failure to be opted up to professional investor status following the implementation of MIFID II.  This had entered the register as a red risk as the consequences would be the potential fire sale of assets and inability to implement the investment strategy.

 

Risk 22 – LCC Team Workloads and Resources.  This existing risk had been raised to red due to a reduction in staff in the Pension Fund Manager's team.  It was reported that interviews would be taking place shortly to fill one of the vacancies. 

 

Asset Pooling Update

The Pension Fund Manager announced that the newly appointed CEO of the Border to Coast Pension Partnership (BCPP) was Rachel Elwell who  would join the Partnership from Royal London Asset Management

 

As there were three LGPS funds who had not yet fully aligned themselves with a pool, the Department for Communities and Local Government had sent a generic letter to all funds (shown at Appendix F to the report) requesting a progress update on their pooling arrangements.  The BCPP pooling arrangements were going well with a view to being fully operable by 6 June 2018.  Lincolnshire County Council had no concerns with the pooling arrangements, and all was going well.

 

Committee Training

Certain members of the Committee had recently attended a training session in York and spoke highly of it. 

 

The Committee was reminded that the three-day LGA Fundamentals course was very useful for those new to local government pensions.  The three days were held separately over three months, but did not all have to be taken in  ...  view the full minutes text for item 30.

31.

Investment Management Report pdf icon PDF 730 KB

(A report by Jo Ray, (Pension Fund Manager), in connection with the management of the Lincolnshire Pension Fund assets over the period from 1 April to 30 June 2017)

Minutes:

The Committee considered a report which provided an update on the management of the Lincolnshire Pension Fund assets over the period from 1 April to 30 June 2017.

 

The Pension Fund Manager reported that it had been a very good quarter and the Fund's Investment Consultant, Hymans Robertson had no concerns with any of the Fund's managers.

 

From the report, the Pension Fund Manager highlighted that £15m was to be committed to Infracapital Greenfield Partners I (IGP I) in order to increase the Fund's strategic allocation to infrastructure.  IGP I would target the Fund's capital at creating a diversified portfolio of European greenfield economic infrastructure investments.  The portfolio was likely to have a 25 year life period in order to capitalise on long term income streams.  Going forward, IGP I would be reporting on its progress to the Committee.

 

Clarification was sought from members on the meaning of the word 'greenfield'.  Officers explained that this was an investment term and different from the definition of greenfield in planning law.  In terms of investment, it was a type of venture where finances were employed to create a new physical facility for a business in a location where no existing facilities were present.

 

RESOLVED

 

That the report be noted.

32.

Performance Measurement Annual Report pdf icon PDF 128 KB

(A report by Jo Ray, (Pension Fund Manager), in connection with the Pension Fund's longer term investment performance, for the period ending 31st March 2017)

Minutes:

The Committee considered a report which set out the Pension Fund's longer term investment performance for the period ending 31 March 2017.

 

It was noted that the Fund's asset allocation would stay with the Committee and Manager selection would be made within BCPP once the pool was operating. 

 

The Pension Fund Manager highlighted the change in supplier of the Local Authority Universe in April 2016 from the WM Company to PIRC.  Officers did not feel that the LA Universe was a particularly useful tool as funds had different asset allocation from each other, which made comparisons unhelpful.

 

RESOLVED

 

That the report be noted.

33.

Border to Coast Pensions Partnership (BCPP) Responsible Investment Policy and Corporate Governance Voting Guidelines pdf icon PDF 137 KB

(A report by Jo Ray, (Pension Fund Manager), which enables the Committee to consider the Border to Coast Pension Partnership's (BCPP) Responsible Investment Policy and Corporate Governance Voting Guidelines)

 

 

 

Additional documents:

Minutes:

Consideration was given to a report which presented the proposed Border to Coast Pension Partnership (BCPP) Responsible Investment Policy and Corporate Governance Voting Guidelines for approval.

 

During discussion regarding the Responsible Investment Policy, Members were reminded that Fund managers would follow ESG (Environmental, Social and Governance) guidelines when selecting stock, however this did not necessarily include ethical choices.  Ethics would be considered where there was the scope to do so, but not if the ethical choice was detrimental to the long term financial performance of the Fund.

 

In relation to that, Officers were asked if companies that produced arms were considered ethical and it was explained that many of those companies also produced other goods, for example Rolls Royce.

 

The BCPP Voting Guidelines were discussed and Officers reported that they were very similar to the current voting template already used by the Fund that the Committee had approved.

 

Issues were raised regarding members' ability to vote against multi-national companies.  Officers confirmed that there was the ability to vote away from the BCPP template if required, however this was expected to be the exception rather than the norm.

 

As the Chairman was a member of BCPP's Joint Committee, he welcomed any concerns or questions members of the Committee may have and would be happy to report back to the Joint Committee if necessary.

 

RESOLVED

 

1.    That the proposed BCPP Responsible Investment Policy and Corporate Governance Voting Guidelines be approved;

 

2.    That the creation and alignment to BCPP's policies of a Lincolnshire RI Policy and Voting Guidelines be agreed;

 

3.    That the report be noted.

34.

Pension Fund External Audit Completion Report pdf icon PDF 138 KB

(A report by Jo Ray, (Pension Fund Manager), in connection with the Audit Completion Report, submitted by the external auditors for the Council, KPMG)

Additional documents:

Minutes:

The Committee considered a report which presented the Audit Completion Report, submitted by the external auditors for the Council, KPMG.

 

The Audit Completion Report had already been received by the Council's Audit Committee at its meeting on 25 September 2017 and had since been signed off on 29 September 2017 for the final Audit Opinion.

 

The document had been published and was available to view on the Fund's shared website with WYPF.

 

Officers reported that KPMG would be replaced by Mazars in 2019 for providing an external auditing service to the Council.

 

RESOLVED

 

That the report be noted.

 

 

 

 
 
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