Agenda and minutes

Apologies for absence were received from Cllr Basu, Cllr Butcher and Roger Melling.

The Chair will consider the admission of any late items of urgent business. Late items will be considered under the agenda item where they appear. New items will be considered under agenda item 8.

RESOLVED

That the late reports Governance Options Regarding Monitoring of Fund Managers and Business Continuity Arrangements (open report and exempt appendix) be admitted for consideration.

A member with a personal interest in a matter who attends a meeting of the authority at which the matter is considered must disclose to that meeting the existence and nature of that interest at the commencement of that consideration, or whenever the interest becomes apparent.

A member with a personal interest in a matter also has a prejudicial interest in that matter if the interest is one which a member of the public with knowledge of the relevant facts would reasonably regard as so significant that it is likely to prejudice the member’s judgement of the public interest and if this interest affects their financial position or the financial position of a person or body as described in paragraph 8 of the Code of Conduct and/or if it relates to the determining of any approval, consent, license, permission or registration in relation tot hem or any person or body described in paragraph 8 of the Code of Conduct.

Cllr Wilson declared a personal interest in respect of his employment by the Association of British Insurers.

Cllr Adje declared a personal interest as a contributing member to the Haringey Pension Scheme.

Cllr Rahman Khan declared a personal interest in respect of his membership of the Haringey Pension Scheme. He also declared a personal interest in respect of his attendance at training events and conferences, to which some of the Fund Managers may have directly contributed.

Cllr Thompson declared a personal interest in respect of his membership of the Haringey Pension Scheme. He also declared a personal interest in respect of his attendance at training events and conferences, to which some of the Fund Managers may have directly contributed.

To confirm and sign the minutes of the Pensions Committee held on 18 September 2008.

The minutes of the meeting held on 18 September were agreed and signed by the Chair.

Report of the Chief Finanical Officer to present the statutory Annual Governance Report of Grant Thornton that reports on their annual audit of the Pension Fund.

The Chief Financial Officer introduced the Annual Governance Report of Grant Thornton, the Council’s appointed auditor of the Pension Fund. From the next financial year a separate audit of Pension Fund accounts would be a statutory requirement and, in advance of this requirement coming into force, this was the first separate audit of Haringey’s Pension Fund accounts, which had previously been included within the overall audit of the Council’s accounts. 

The Chair welcomed the report and the separate audit of the Pension Fund accounts, which provided Trustees with a further insight into the Pension Fund.

Grant Thornton presented the various sections of the report, which covered the approach to the work, audit findings, review of the accounts and audit adjustments. Grant Thornton also discussed the changes to the SORP which would be coming into effect from next financial year, and the impact these would have on the 2008/09 accounts.

In response to questions from members regarding the use of shared bank accounts, as outlined in the audit results, Grant Thornton reported that shared accounts were common in Local Authorities. In response to the question of whether the Council would implement the auditors’ recommendation that the Council consider the use of separate bank accounts, the Chief Financial Officer reported that a full review of the options would be carried out, assessing the relative impact of the options on workload and cost, and that a decision on how to proceed would be made on this basis. The Chair requested that this review be carried out by the end of the financial year. The Chief Financial Officer emphasised to members that under no circumstances would the holdings of the Pension Fund ever be used to supplement Council funds. Grant Thornton confirmed that no Pension Fund money was invested in Icelandic accounts. For information, the Chief Financial Officer tabled details of Pension Fund deposits as at October 2008, and reported that accounts were chosen on the basis of advice from rating agencies and treasury management advisors.

Grant Thornton confirmed that the contributions received late, as outlined in the audit results, related only to the smaller scheduled and admitted bodies, and it was suggested that ways of addressing this issue with the individual bodies concerned be explored. The Chair requested that officers investigate any instances of late payment in order to ensure that procedures were compliant with all relevant regulations and best practice.

In response to questions regarding the issue of members with more than one record and the risk that these might be double-counted by the actuary in their valuation of the Fund, Grant Thornton confirmed that this was an issue that the actuary was aware of and would take into account, but that it had been raised in the report to highlight the issue. The Chief Financial Officer confirmed that duplicate records would be identified as part of a data validation exercise with the actuary to ensure that no double-counting occurred.

Members asked about the accounting standards and what impact changes to the  ...  view the full minutes text for item 45.

Report of the Chief Financial Officer to present governance options regarding the monitoring of Fund Managers.

TO FOLLOW

The Chief Financial Officer, Gerald Almeroth, introduced this report on the governance options regarding monitoring of Fund Managers and the report of Hewitt Associates Limited on best practice options for governance arrangements. The Committee noted that it was important to balance the time spent speaking to Fund Managers with the time spent on reviewing the investment strategy and asset allocation, and noted that the new investment strategy would add a further two Fund Managers.

Further to the review by Hewitts, the report set out three best practice options of which ‘refocus of the current structure’ had been identified as the preferred course of action. Under this option, the Committee would continue to hold six meetings a year, but with three dedicated to Fund Manager monitoring and three dedicated to a business agenda focussed on the Fund’s investment strategy and monitoring at a Fund level. The Chief Financial Officer reported that, while it was hoped that the Committee could move towards this option in the future, the current financial climate meant that it was not an opportune moment to change current arrangements and it was suggested that this issue be brought back for further consideration by the Committee at a future date.

Members agreed that the recommended refocus of the current structure of Committee meetings would be desirable in future, but also agreed that no action should be taken in the present economic situation. It was also noted that the next full review of investment strategy was due in eighteen months time. In the interim, the Chair suggested that time be allocated at each Pensions Committee meeting to monitor the investment strategy during this period of market volatility. Members emphasised that it was important for sufficient time to be allocated for any consideration of the investment strategy, given its importance.

RESOLVED

i)                    That no changes to arrangements be implemented at the present time, although option 1 has been identified as the preffered way forward under the present arrangement of six meetings per year.

ii)                  That, when advised by the Chief Financial Officer that it was an appropriate time to make changes to the governance arrangements, the implementation of option 1 be discussed further.

iii)                That, in view of current market turmoil, the investment strategy be reviewed in brief on a quarterly basis, pending a full review as planned at the appropriate time.

Report of the Chief Financial Officer to consider the ownership of our current Fund Managers and business continuity arrangements in the event of a Fund Manager ceasing to trade.

TO FOLLOW

The Chief Financial Officer, Gerald Almeroth, introduced the report to consider the ownership risks of the current Fund Managers and the business continuity arrangements in the event of a Fund Manager ceasing to trade. The report presented an assessment of Fund Manager ownership, and proposals for contingency options in the event of a Fund Manager ceasing to trade. Members were reassured that there would be no loss of funds if a Fund Manager were to cease to trade, as assets were held either in the name of the Fund’s custodian, Northern Trust, or of the Council and not the name of the Fund Manager.

The Committee discussed the recommendation that an Index Tracker Fund Manager be appointed to a framework agreement, and discussed other possible options to mitigate the risk of assets not being managed on an interim basis. It was noted that payment would only be made to any appointed Index Tracker Fund manager in the event that they were needed because of an existing Fund Manager ceasing to trade.

In response to questions from members, it was reported that any interim measure taken would not affect the fund’s wider investment strategy in the long term. Hewitts clarified the position of Northern Trust as custodian for the Pension Fund, meaning that assets were held in their name but were not owned by them. As such, there was no risk to the fund’s assets if Northern Trust were to cease to trade.

RESOLVED

i)                    That the ownership risks of the fund’s Fund Managers be noted.

ii)                  That authority be delegated to the Chief Financial Officer to appoint an Index Tracker Fund Manager to a framework agreement for a four year contract period, involving at each stage the Council’s Corporate Procurement Unit and Legal Services and ensuring full compliance wuth EU regulations and all other appropriate UK regulations.

iii)                That the performance of the Index Tracker be reviewed periodically by the Pensions Committee.

To consider any new items of urgent business admitted under agenda item 2 above.

There were no new items of urgent business.

The following item is likely to be the subject of a motion to exclude the public and press from the meeting as it contains ‘exempt’ information as defined in Section 100A of the Local Government Act 1972, namely that it contains information relating to the business or financial affairs of any particular person (including the Authority holding that information).

Note from the Head of Local Democracy and Member Services

The following item allows for consideration of exempt information (if required) in relation to item 7 which appears earlier on this agenda.

RESOLVED

That the press and public be excluded from the meeting.

Report of the Chief Financial Officer to consider the ownership of our current Fund Managers and business continuity arrangements in the event of a Fund Manager ceasing to trade.

TO FOLLOW

NOTED

Financial information relating to the appointment of an Index Tracker Fund Manager, as contained in appendix A of the report under exempt information.

The meeting concluded at 8.45pm.