Agenda and minutes

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Contact: Rachel Wilson  Democratic Services Officer

Media

Items
No. Item

93.

Apologies for Absence

Minutes:

Apologies for absence were received from Councillor R Waller (District Council Representative).

94.

Declarations of Members' Interests

Minutes:

Steve Larter declared that he was a deferred and inactive member of the Pension Fund.

 

Councillor P E Coupland declared an interest as Chairman of the Public Sector Partnership Services Ltd Board, which is an employer within the Lincolnshire Pension Fund.

 

Councillor P M Key declared an interest as an active member of the Pension Fund.

 

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

95.

Minutes of the previous meeting held on 16 July 2020 pdf icon PDF 236 KB

Minutes:

RESOLVED:

 

          That the minutes of the meeting held on 16 July 2020 be approved as a correct record and signed by Chairman.

96.

Independent Advisor's Report pdf icon PDF 270 KB

(To receive a report from Peter Jones, Independent Advisor, which provides a market commentary on the current state of global investment markets)

Minutes:

Consideration was given to a report by the Committee's Independent Advisor on the current state of global investment markets.

 

The update focused on the continued impacts of Covid-19 on the global economy, it was also expected that the upcoming US election would have an effect.

 

It was reported that in August, the economy only grew by 2% and it was expected that Quarter 3 in the UK would be disappointing.  A similar situation was expected in parts of Europe.  It was highlighted that Germany's economy was beginning to show signs of trouble, even though it was considered that their handling of Covid-19 had been textbook.

 

The view was that the western world was going to have a very difficult economic winter and output would fall from Q3 into Q4 of 2020.  A consequence of this would be a rise in unemployment, and it was believed that this would mainly be focused on young people.  China seemed to have mostly got over the virus, and whilst their economy was not quite as strong as it was in 2019, improvements were being seen, with journeys via public transport almost back to normal levels.

 

With the US election imminent, the Independent Advisor advised he had not commented on this in his report as the outcome was hard to anticipate at the time the report was written.  The US stock markets were close to an all-time high (both the NASDAQ and the S&P500), partly due to the swing in the opinion polls.  Also, unemployment was starting to rise quite quickly, and the economy was starting to falter.  Congress was gridlocked and so the stimulus that was required was being blocked.  Anticipation of the outcome of the election and the potential for a stimulus package in January had buoyed stock markets.  It was also highlighted that as tech stocks were doing well, there was concern from some that this would not continue, however, it was suggested that one of the few 'winners' from Covid-19 were the tech companies as many people were now reliant on these products for day to day life and work.

 

Fundamentals were deteriorating, however, what was considered more important was the amount of liquidity coming from all the global central banks, and in the view of the Independent Advisor, it was unlikely that this would be taken away.

 

RESOLVED

 

            That the update be noted.

 

97.

Report by the Independent Chair of the Lincolnshire Local Pension Board pdf icon PDF 274 KB

(To receive a report by Roger Buttery, Independent Chair of the Local Pension Board, which updates the Committee on the work of the Pensions Board during the last few months)

Minutes:

Consideration was given to a report by the Independent Chairman of the Lincolnshire Local Pension Board which updated the Pensions Committee on the work of the Pensions Board during the last few months.

 

It was highlighted that five main issues had been identified by the Board and these were set out at the end of the report and included:

·         Concerns about the quality of the external audit of a complex pension scheme and the process which had driven fees to such low levels that audit firms were withdrawing from the market;

·         The Pension Board recommended two additional items for inclusion in the Risk Register;

·         The vast majority of employers were paying their contributions on time and submitting the required documentation;

·         Some concerns about The Pension Regulator (TPR) data scores and the Pension Board could not provide full assurance on this aspect; and

·         The Board raised some concerns about the controls of the Suspense Account for unpaid pension benefits and the length of time that it took to locate "missing" members.

 

It was commented that the Pension Board thought that the WYPF team had transitioned successfully and seamlessly to working from home.

 

It was confirmed that the two additional risks for the risk register suggested by the Pensions Board would be considered as part of the next item.

 

RESOLVED

 

            That the report be noted.

 

 

98.

Pension Fund Update Report pdf icon PDF 680 KB

(To receive a report by Jo Ray, Head of Pensions, which updates the Committee on Fund matters for the quarter ending 30 June 2020 and any other current issues)

Additional documents:

Minutes:

Consideration was given to a report by the Head of Pensions which updated the Committee on Fund matters for the quarter ending 30 June 2020.  The report covered a funding level update; responsible investments; TPR Checklist Dashboard; Breaches Register Update; Risk Register Update; Asset Pooling Update; FSS Update and Exit Credit Policy; and Conference and Training Attendance.

 

Members were advised that page 24 of the agenda pack set out two suggested additions to the risk register which had been put forward by the Pensions Board and it was suggested that they were added to the register as green risks.

 

Members were guided through the report, and reference was made to the exit credit policy and how the amended regulations (the Local Government Pension Scheme Regulations 2013) could affect pension funds.  The regulations could require that any surplus had to be paid back to the employer when they left the Scheme.  The draft policy which set out the general guidelines that Lincolnshire Pension Fund would follow when determining the amount of exit credit payable was attached at appendix E to the report.

 

In relation to attendance at conferences and training events, it was noted that officers had not attended anything in person since before March 2020, but they had attended many webinars.  These included discussion on the impacts of Covid-19 and how pension funds were coping.  It was reported that a number of Committee members had attended the Border to Coast Annual Conference on 2 October 2020.

 

One member commented that they had attended the virtual Border to Coast Conference and had found it to be very well organised. 

 

RESOLVED

 

1.    That the report be noted;

2.    That the additions to the risk register as suggested by the Pension Board be approved;

3.    That the Exit Credit Policy and the amendments to the Funding Strategy Statements be approved.

99.

Pensions Administration Update Report pdf icon PDF 907 KB

(To receive a report by Yunus Gajra, Business Development Manager - West Yorkshire Pension Fund, which provides the Committee with an update on current administration issues)

Additional documents:

Minutes:

Consideration was given to the quarterly report by the Fund's pension administrator, West Yorkshire Pension Fund.  The Committee was updated on current administration issues.

 

Members of the Committee were guided through the report and were provided with the opportunity to ask questions to the officers present in relation to the information contained within the report and some of the points raised included the following:

·         It was encouraging to see that the performance against the KPI's continued to be good.

·         It was noted that the target for Transfer Out Quotes had not been met, but it was commented that this was understandable due to the extra requirements from the TPR to highlight pension scams to members, and was not a matter of concern to the Committee.

·         It was queried whether there was a plan in place to manage the additional workload following the McCloud Review.  It was reported that the West Yorkshire Pension Fund was in the early stages of devising a strategy, and a project team had been set up.  A small admin team would also be established which would deal specifically with work following the McCloud review and also other specific projects.

·         Reference was made to the Shared Service Budget which was set out on page 110 of the agenda pack.  It was highlighted that the number of members for 2019/20 and 2020/21 were the same, and the 2019/20 outturn and 2020/21 forecast were also the same, and queried whether this was correct.  The Business Development Manager advised that he would need to double check these figures and would report back to the Committee via the Head of Pensions and the Accounting, Governance and Investment Manager.

 

RESOLVED

 

            That the report be noted.

 

100.

Employer Monthly Submissions Update pdf icon PDF 269 KB

(To receive a report by Claire Machej, Accounting, Governance and Investment Manager, which provides the Committee with up to date information on Employer Monthly Submissions for the first quarter of the financial year 2020/21)

Additional documents:

Minutes:

Consideration was given to a report which provided the Committee with up to date information on Employer Monthly Submissions for the first quarter of the financial year 2020/21 (April to June 2020).

 

Members were guided through the report and it was highlighted that the late contributions and data submissions to June 2020 were set out on page 124 of the agenda pack.

 

RESOLVED

 

            That the report be noted.

101.

Investment Management Report pdf icon PDF 586 KB

(To receive a report by Claire Machej, Accounting, Investment and Governance Manager, which covers the management of the Lincolnshire Pension Fund assets over the period from 1 April 2020 to 30 June 2020)

Additional documents:

Minutes:

Consideration was given to a report that covered the management of the Lincolnshire Pension Fund assets over the period from 1 April 2020 to 30 June 2020.  The report covered the Fund Summary – Asset Allocation and Performance; Individual Investment Manager Updates; and Hymans Robertson Manager Assessments.

 

It was reported that the over this quarter, the Fund had produced a positive return of 10.53% which was only slightly below the benchmark.  Details of individual manager performance was set out in Appendix B to the report.

 

The Fund's Investment Consultant provided the Committee with an assessment of the performance of the Fund's investment managers and portfolios.  This focused primarily on the quarter to June 2020.  It was highlighted that Invesco had continued to underperform both in rising and falling markets.

 

RESOLVED

 

            That the report be noted.

102.

Performance Measurement Annual Report pdf icon PDF 593 KB

(To receive a report by Jo Ray, Head of Pensions, which sets out the Pension Fund's longer term investment performance for the period ending 31 March 2020)

Minutes:

Consideration was given to a report which set out the Pension Fund's longer term investment performance for the period ending 31 March 2020.

 

Members were guided through the report and it was highlighted that Table 2.2 showed the performance of the fund over 1 year, 3 year, 5 year and 10 year periods.  The Committee was advised that the performance at 10 years was in excess of the long term return required to meet the Fund's liabilities, even though it was slightly behind the Fund's benchmark, and was ahead of both inflation and average earnings.

 

It was reported that the previous year had been difficult for the Fund with the underperformance of Invesco being a contributing factor.

 

RESOLVED

 

            That the report be noted.

 

 

103.

Pension Fund External Audit Report 2019/20 pdf icon PDF 318 KB

(To receive a report by Claire Machej, Accounting, Investment and Governance Manager, which summarises the findings from the work undertaken by the Council's External Auditors, Mazars, in giving their opinion on the Pension Fund Accounts and Annual Report)

Additional documents:

Minutes:

Consideration was given to a report which summarised the findings from the work undertaken by the Council's External Auditors, Mazars, in giving their opinion on the Pension Fund Accounts and Annual Report.  Their findings were initially reported to the Council's Audit Committee in their Audit Completion Report in September 2020 and was summarised to the Pensions Committee.

 

It was reported that the changes expected to the draft accounts which were highlighted to the Committee at the July meeting had been incorporated into the accounts.  Full details of the changes made were set out in the report at paragraphs 4 to 6.

 

Members were advised that the external auditor expected to give an unqualified opinion on the Pension Fund accounts by the end of October, but that the opinion contained an 'emphasis of matter' relating to the 'material valuation uncertainty' given by valuers of Property Unit Trust Funds.  This would not affect the unqualified opinion, but did draw the reader of the accounts to the disclosure made on these matters in the financial statements.

 

RESOLVED

 

            That the covering report and the Audit Completion Report prepared by the Council's External Auditors, Mazars, be noted.

104.

CONSIDERATION OF EXEMPT INFORMATION

Minutes:

RESOLVED

 

            That in accordance with Section 100A of the Local Government Act 1972, the press and public be excluded from the meeting for the following items of business on the grounds that if they were present they could be a disclosure of exempt information as defined in paragraph 3 of Part 1 of Section 12A of the Local Government Act 1972, as amended.

 

105.

Investment Strategy Considerations

(To receive an exempt report by Jo Ray, Head of Pensions, which provides the Committee with the opportunity to consider the investment strategy)

Additional documents:

Minutes:

Consideration was given to an report by the Head of Pensions in relation to Investment Strategy Considerations.

 

A number of questions from members were asked and answered.

 

RESOLVED

 

            That the recommendations as set out in the exempt report be noted.

106.

Actuarial Tender and Appointment Recommendation

(To receive an exempt report by Jo Ray, Head of Pensions, which provides the Committee with information in relation to the Actuarial Tender and Appointment recommendation)

Additional documents:

Minutes:

Consideration was given to a report by the Head of Pensions which set out the Actuarial Tender and Appointment Recommendation.

 

A number of questions by members were asked and answered.

 

RESOLVED

 

            That the recommendations as set out in the exempt report be noted.

 

 
 
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