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 by Jo Ray (Pension Fund Manager) which provided an update on Pension Fund matters and included current issues.

The latest engagement report of the Local Authority Pension Fund Forum (LAPFF) could be round on their website at www.lapfforum.org, highlights of which were noted:-

·       Voting alerts in relation to executive pay had been issued to LAPFF members with binding pay policies at Carillion, Smith & Nephew, GlaxoSmithKline, BP, Shell, Babcock and WPP;

·       A number of voting alerts had also been issued which recommended that members back shareholder resolutions on climate change disclosure at US energy firms PPL, Chevron and Exxon Mobil.  These resolutions were in line with the policies of the LAPFF;

·       An announcement was made that the LAPFF was to partner with the 50/50 Climate Project which was expected to enhance the Forum's actions to promote climate competent boards and enhance collective investor action;

·       The LAPFF submitted a response to the consultation of the Green Paper, relating to Corporate Governance, which recommended that the problems with the FRC were so deep rooted that the FRC be disbanded and that a proper competent authority be set up in its place;

·       An Executive Member of the LAPFF met with the Chairman of BT to discuss a number of issues including Brexit, the British economy and the recent accounting scandal and cybersecurity of BT; and

·       An Executive Member of the LAPFF met with the Chairmen of Aberdeen Asset Management and Standard Life to discuss the imminent merger of the two companies

·       BCPP had drawn up a responsible investment policy which had gone out to all underlying funds for comment with a request to align their own policies to the BCPP policy.  The Board was assured that LPF would use the BCPP policy to create their policy and that the BCPP policy and guidelines were to be presented  to the Joint Committee on 20 October 2017 for approval;

·       The Board was advised that a letter had been received from a scheme member in relation to responsible investments and their dissatisfaction in the investment in a tobacco company.  A joint response had been drafted which would be shared with the Board.  The issue had also been discussed at the Pensions Committee including the moral issue of other investment areas such as armaments, alcohol and fossil fuel, etc.  It was confirmed that the Government could not direct investment and that the investment in the tobacco company (BAT) had returned 210% over the last seven years, compared to 80% for the FTSE 100 index, which the fund had greatly benefitted from.

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, requesting that the last remaining member of the Board complete the Pension Regulators Toolkit. 

F1 – Maintaining Accurate Member Data – The Lincolnshire Employers Administration Forum (LEAF) met on 17 October 2017 where a presentation on TPR requirements was given.  The Board noted that the largest area of concern was in relation to academies with outsourced payroll functions.  The importance of data cleansing was reiterated to all present.

H5 & H6 – Maintaining Contributions – a request had been made at the Pensions Committee that the Prudential be invited to attend a future meeting.

H1 – Maintaining Contributions – the Board was advised that the figure had further increased since the report was published and that 98% of Statements had now been issued.

In relation to the Risk Register, the Board noted that Risk 24 – UK Leaving the EU – remained red due to the uncertainty surrounding Brexit.  Risk 22 – Team Workloads – unfortunately the recruitment process to appoint an Accounting, Investment and Governance Manager had been unsuccessful.  It was reported that the Person Specification had been adjusted slightly in order to attract more applicants and made clear in the advertisement that a qualified accountant was required.  The closing date for applications was 5 November 2017.

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

·       It was confirmed that late contributions had increased since April but that extenuating circumstances were considered before implementing fines.  Some employers were, however, repeat offenders but since fines were issue, the situation had improved.  The Board noted that this issue was not unique to Lincolnshire but that it was more prevalent due to monthly posting;

·       HR colleagues had met with Serco colleagues to discuss leaver information and how to relay that information to WYPF more efficiently.  Following discussion, it was suggested and agreed to arrange a meeting between the Pension Fund Manager, WYPF, Serco and HR to find a solution.  It was also agreed to add this to the agenda for the next meeting of the Board and invite those involved to attend also;

·       The Pension Fund Manager reported that following the appointment of the Chairman and Chief Executive of BCPP, an announcement was imminent to report the appointment of the Chief Operating Officer and two Non-Executive Directors;

·       Councillor Whittington reported that the quality of presentations at the York event had been exceptional and hoped that this quality would continue for future events;

·       The Chairman, attended the PLSA event in September, the theme of which was "Pension Boards Two Years on", and concern was noted that there were only twelve attendees from across the country.  The event had highlighted that those Board representatives in attendance appeared to be working in the same way.

RESOLVED

1.    That the Pension Fund Update report be noted.

2.    That LCC Leaver Information be added to the agenda for the next meeting of the Board and to invite representatives from WYPF, Serco and HR to attend.