Agenda item

(To receive a report by Jo Ray, Pension Fund Manager, which provides an update on Pension Fund matters including any current issues)

Consideration was given to a report from Jo Ray (Pension Fund Manager) which provided the Board with an update on Pension Fund matters including all current issues.

This type of report was received by the Pensions Committee on a quarterly basis and it was suggested that this format would also be beneficial to the Board in order to keep them up-to-date with the current issues of the Pension Fund.

It was reported that Nick Rouse (Investment Manager) had left the employment of Lincolnshire County Council and that the Pension Fund Manager was also undertaking this role until a replacement was appointed.  This had provided an opportunity to rewrite the Job Description to give the role the wider remit of an Accounting, Investment and Governance Manager which would also include overall responsibility for the LGPS Pension Board.  This would need to go through the Job Evaluation process before an advert could be placed which would delay the appointment.

As a result of this vacancy, the Board was advised that the Annual Report had not been completed although the annual accounts had now been closed.  It was, however, noted that the Annual Report must approved by the Pensions Committee in September and would be presented to the Board at its meeting in October 2017.

As per the Terms of Reference, the Executive Director of Finance and Public Protection had granted the reappointment of Councillor M A Whittington to the Board for a further four years. 

In relation to the appointment of the Scheme Member Representative, Mr D Vickers, the Executive Director of Finance and Public Protection had agreed an extension to this appointment with the approval of the Board.  This was unanimously agreed by those present.

The Board was asked to note that Councillor E W Strengiel, Chairman of the Pensions Committee, would represent the Committee on the Local Authority Pension Fund Forum (LAPFF).  Councillor Strengiel was also a member of the Joint Committee of the Border to Coast Pensions Partnership (BCPP), therefore it was felt this role would provide consistency in the provision of feedback to both the Pensions Committee and LGPS Pension Board.

The highlights of the latest LAPFF engagement report, a copy of which could be found on the website at www.lapfforum.org, were presented to the Board:-

·       A response to the Department for Business, Energy & Industrial Strategy's Green paper on Corporate Governance Reform had been submitted by the LAPFF which focused on ensuring that executive pay was properly aligned to long-term performance in addition to giving greater voice to employees and consumers in the boardroom;

·       An Executive member of the LAPFF had attended the EasyJet Annual General Meeting and spoke to the Chairman and Senior Independent Director;

·       The Forum supported the recommendations of the Financial Stability Board's Taskforce on Climate Disclosure;

·       A member of the LAPFF Executive, and Chairman of Rio Tinto, joined other investors in a small coalition which had met with the company since 2013 in its endeavours to improve its response to the anticipated low-carbon transition;

·       LAPFF also responded to the government-backed Parker Review on Ethnic Diversity of UK Boards consultation report 'Beyond One by 21'.  The response of the Forum set out its position on diversity and recommended that the final report may be strengthened by reiterating the role that investors should play; and

·       The Forum met with HSBC to discuss the company's sparse human capital management reporting and financial regulation, including US reports which suggested that financial regulations implemented after the financial crisis were likely to be rolled back.

The Pension Fund Manager continued by referring to the TPR Checklist Dashboard and, in particular, drew the Board's attention to B12 – Knowledge and Understanding.  As previously mentioned, all but two of the Board had completed the Pension Regulators Toolkit which was the reason this indicator remained 'amber'.  The Board also noted that members of the Pensions Committee were also required to complete this toolkit.

In relation to K7 – Scheme Advisory Board Guidance – the Board confirmed that they preferred a collective approach to Board training assessments rather than individual training plans.

Members were invited to ask questions, during which the following points were noted:-

·       Despite the requirement for the Border to Coast Pensions Partnership Ltd to be created and operational by the end of April 2018, it was confirmed that a delayed response from Government meant this would now be June 2018;

·       It was explained that West Yorkshire Pension Fund and Manchester were pooling the management of their assets but not pooling their actual assets;

·       Should any employer within the Pension Fund continually make late payments, even where maximum penalties had been issued, they would reported to The Pension Regulator; and

·       The Board was assured that the recent data breach was due to human error at the outsourced printing company and affected only a small number of Annual Benefit Statements.  However, this breach did highlight that there was a need to inform the Pension Fund Manager of any, and all, breaches to enable a decision to be made whether the Information Governance Officers within both LCC and WYPF needed to be aware also.

The Board were encouraged to attend the two-day training session in York on 11^th and 12^th September 2017 which had been arranged for members of the Pensions Committees and Pension Boards which formed part of the BCPP.  Councillor M A Whittington confirmed that he would be attending both days and the Chair advised he had confirmed attendance on day two of the training.  As noted within the report, members were asked to contact Jon Haw to ensure a place could be secured.

RESOLVED

1.    That the extension of the term of office for the Scheme Member Representative be agreed; and

2.    That the report be noted.