Agenda and minutes

Please note this meeting may be filmed or recorded by the Council for live or subsequent broadcast via the Council’s internet site or by anyone attending the meeting using any communication method.  Although we ask members of the public recording, filming or reporting on the meeting not to include the public seating areas, members of the public attending the meeting should be aware that we cannot guarantee that they will not be filmed or recorded by others attending the meeting.  Members of the public participating in the meeting (e.g. making deputations, asking questions, making oral protests) should be aware that they are likely to be filmed, recorded or reported on.  By entering the meeting room and using the public seating area, you are consenting to being filmed and to the possible use of those images and sound recordings.

The Chair of the meeting has the discretion to terminate or suspend filming or recording, if in his or her opinion continuation of the filming, recording or reporting would disrupt or prejudice the proceedings, infringe the rights of any individual, or may lead to the breach of a legal obligation by the Council.

The Chair referred Members present to item 1 as shown on the agenda in respect of filming at this meeting and Members noted the information contained therein. 

To receive any apologies for absence.

Apologies for absence were received from Roger Melling. Apologies for lateness were received from Cllr Peacock.

The Chair will consider the admission of any late items of Urgent Business. (Late items of Urgent Business will be considered under the agenda item where they appear. New items of Urgent Business will be dealt with under item 12 below. New items of exempt business will be dealt with at item 18 below).

There were no items of urgent business.

A member with a disclosable pecuniary interest or a prejudicial interest in a matter who attends a meeting of the authority at which the matter is considered:

(i) must disclose the interest at the start of the meeting or when the interest becomes apparent, and

(ii) may not participate in any discussion or vote on the matter and must withdraw from the meeting room.

A member who discloses at a meeting a disclosable pecuniary interest which is not registered in the Register of Members’ Interests or the subject of a pending notification must notify the Monitoring Officer of the interest within 28 days of the disclosure.

Disclosable pecuniary interests, personal interests and prejudicial interests are defined at Paragraphs 5-7 and Appendix A of the Members’ Code of Conduct.

There were no declarations of interest.

To confirm and sign the unrestricted minutes of the meeting held on 24 March 2015 as a correct record.

In response to a question from the Committee regarding the minute number LC58 and the Guaranteed Minimum Pensions (GMP), Janet Richards, Pensions Manager, advised that this related to scheme members with service between 1978 and 1997. It was reported that from 2018 HMRC would cease to provide information to employers on GMPs, and employers would be responsible for ensuring that their own data on the GMPs for which they were liable was correct from this time. It was noted that this was a significant exercise.

Further to minute LC59 and the request for a briefing note on the possible use of the Pension Fund to contribute to the building of housing in the borough, George Bruce, Head of Finance – Pensions and Treasury, advised that he had been in contact with housing services regarding this possibility. It was reported that this was not a funding source that was being considered at present, but that if this were to change then officers would report back to the Committee.

RESOLVED

That the minutes of the Pensions Committee meeting held on 24 March 2015 be approved as a correct record and signed by the Chair.

Report of the Assistant Director, Finance, to advise the Committee that WM Performance Services will be attending the meeting to discuss the fund’s investment returns compared with their local government universe and providing general insight into the returns from the asset classes’ use by Local Government Pension Funds.

Lynn Coventry, State Street, gave a presentation to the Committee on the Fund’s investment returns compared with other Local Government funds, and returns from the asset classes used by Local Government Pension Funds in general.

In response to a question from the Committee regarding the top-performing funds, and whether they shared any particular characteristics, Ms Coventry advised that these tended to be those funds with a heavier weighting in equities, as these had performed strongly over the past year, but with a lower weighting in UK equities, which had yielded smaller returns compared with other regions.

The Committee noted the value added to the Fund from transactions and asked about transactions more generally, in particular the cost to the Fund. Steve Turner, Mercer, advised that the cost from transactions in relation to Haringey’s Fund was low as it was largely passively managed. It was noted that passive fund managers could only rebalance their portfolios in line with their mandate, and therefore there was not an issue of large numbers of transactions taking place at a cost to the Fund.

The Committee noted that it was most important to compare the Pension Fund’s returns against its own liabilities, rather than against other funds, as meeting its liabilities was the critical issue for the Fund.

NOTED that the Haringey fund has out-performed the Local Government universe over the last 1, 3 and 5 years.

Report of the Assistant Director, Human Resources and Shared Services Centre for the Committee to consider the purchase of a specialist dedicated local government pension scheme website which will keep local government pension scheme members informed of news and legislation changes.

The Committee considered a report on the request to approve via a waiver a hosted pension website produced by Hymans Robertson, as presented by Janet Richards.

The Committee asked about the ‘significant savings’ referred to in the procurement comments of the report, and Ms Richards advised that this was compared with the cost of pensions staff administering the current web pages in-house. It was confirmed that the quality of the service would be reviewed after the initial 3-year period, and a decision taken at that time as to whether to continue with this site or seek an alternative solution.

In response to a question from the Committee, Ms Richards advised that it was intended that the website would include a member self-service facility.

The Chair moved the recommendation of the report and on a unanimous vote in favour it was

RESOLVED

To waive the Contract Standing Orders in accordance with paragraph 10.01 of the Contract Standing Orders of the Constitution on the basis that it is in the Council’s overall interest to do so and approve the purchase of The Hymans Robertson Off the Shelf Website for a period of three years for the set up cost of £4,000 plus £2,000 per annum. The total cost is £10,000.

Report of the Assistant Director, Finance, to report the following in respect of the three months to 31^st March 2015:

·         Investment asset allocation

·         Investment performance

·         Responsible investment activity

·         Budget management

·         Late payment of contributions

·         Communications

·         Funding level update

The Committee considered the report on the Pension Fund Quarterly Update, as presented by George Bruce. The Committee noted the value of the Fund as £1,044,064,000 at 30 April 2015, and performance for the quarter up to 31 March 2015. In respect of the current asset allocations and those areas that were currently underweight compared with the strategy, it was noted that private equity and infrastructure allocations took time to draw down but would align with the strategic position over time.

The Committee noted that the European holdings that had suffered significant capital loss dated from 2007 and had been made by the previous property manager; it was noted that this was an issue that had affected many funds and was not specific to Haringey. In response to a question from the Committee, it was reported that no further European property investments had been made and that there were no current plans to do so. Any such investment would require the approval of the Committee.

The Committee also noted the resignation of the property portfolio manager from CBRE, and the interim management arrangements for this portfolio. Officers would meet with CBRE in due course to meet the new manager and provide the Committee with an update.

The Committee asked about the property portfolio, and why investment was in funds of funds rather than individual property holdings, as this involved an additional layer of fees. It was reported that this approach had been agreed by the Committee previously as it enabled greater diversity and a consequent reduction in volatility and risk. The Committee asked about the increase in investment management expenses as set out in the report, and it was advised that this was largely due to the increase in the value of the assets, as fees were charged as a percentage rather than a flat rate. Steve Turner advised that investment costs for the Haringey Fund were relatively low due to the high proportion of assets managed passively.

RESOLVED

That the information provided in respect of the activity in the three months to 31^st March 2015 be noted.

Report of the Assistant Director, Finance, to update the Committee on the position of the Council’s application to operate a combined Pensions Committee and Pension Board (joint Board), the actions taken in establishing a stand alone Pensions Board and seeking a decision whether or not the Committee still wish to pursue the option of having a joint Board.

The Committee considered the report on the position of the Council’s application to operate a joint Pensions Committee and Pension Board and the actions taken in establishing a standalone Pensions Board, as presented by George Bruce. The Committee was asked to consider whether they still wished to pursue the option of having a joint Board.

In considering the background as set out in the report, the Committee were advised of the concerns raised by the Assistant Director of Corporate Governance with regards to the difficulties of a combined Pensions Committee and Board effectively scrutinising itself and the possible conflict of interest and that the preferred option would be to keep the Committee and Board separate. It was noted that, were the application for a joint Committee and Board to proceed and be granted by the Secretary of State, then such difficulties would need to be addressed. In terms of practical arrangements, it was noted that a combined Committee and Board would entail non-Councillors gaining voting rights on the joint body, and would mean more meetings of the joint body than the current number of Committee meetings per year. John Raisin, Independent Advisor to the Board advised that Members of a joint Committee and Board would be subject to the Pensions Regulator’s requirements in respect of compulsory ongoing training and would be subject to inspection by the Regulator.

Mr Raisin advised that the purpose of the Pension Boards was to assist Pensions Committees; all decision-making would remain with the Committee and the Board would have no authority to challenge any decision of the Committee. The intention behind the introduction of the Pension Boards was to give employers and employees a greater role in their Pension Funds. 

It was reported that there were pros and cons for both maintaining separate Pensions Committees and Boards and for the combined approach. It was noted that most Funds were operating with a separate Pension Board.

In response to a question from the Committee as to whether the function of the Pension Board could be fulfilled by Scrutiny, it was reported that this was something that had been looked into, but the Council’s Scrutiny arrangements did not meet the requirements of the legislation in respect of Pension Boards.

In response to a question from the Committee, it was reported that if a combined Pensions Committee and Board were formed, this would be a single body, with the same members fulfilling both roles at the same meeting – it would not meet separately as the ‘Committee’ or the ‘Board’. All members of the combined Committee and Board, Councillors and non-councillors, would have a vote at these Board meetings.

Cllr Bevan indicated that he was in favour of a combined Committee and Board, and noted that when this issue had been discussed previously, it had been indicated that the requirement to have a Pensions Board was particularly aimed at unfunded schemes where there were currently no committee structures in place, although it was noted that requirement did extend  ...  view the full minutes text for item 74.

Report of the Assistant Director, Finance, to identify topics that will come to the attention of the Committee in the next twelve months and to seek Members’ input into future agendas.

The Committee considered the report on the work plan for the Pensions Committee for the next twelve months, as presented by George Bruce.

The Committee considered the issue of training, particularly as this would become increasingly important in light of the application to the Secretary of State for the approval of a joint Pensions Committee and Pension Board. It was suggested that training sessions should continue to be held in advance of scheduled meetings, and that some standalone training sessions would also be required. It was noted that attending training sessions by external providers would count towards the compulsory training for Pension Board members. It was suggested that the training attended by members between meetings be recorded in the minutes of the next meeting.

It was agreed that details of training courses available on pensions matters be circulated to the Committee.

In terms of future agenda items for the Committee, it was agreed that a standing report be produced on the number of people transferring out of the Haringey Pension Scheme. The Committee also requested a future report on ethical investment.

RESOLVED  

That the approaches identified above in terms of training and items for future Committee agendas be agreed.

Report of the Assistant Director, Finance, to provide the Committee with a quarterly update on the Fund’s investment strategy.

The Committee considered the quarterly report on the Fund’s investment strategy, as presented by Steve Turner, Mercer.

RESOLVED

i)             That officers and advisers review the diversification of assets and, if considered appropriate, bring back proposals to reduce the equity allocation to the next meeting of the Committee.

ii)            That the equity allocations be rebalanced as part of the consolidation of the two passive mandates, which will reduce the North American weighting, as set out in paragraph 5.4 of the report.

To consider any items admitted at item 2 above.

There were no new items of urgent business.

Thursday, 10 September 2015, 7pm.

10 September 2015, 7.30pm.

The following items are likely to be the subject of a motion to exclude the press and public from the meeting as they contain exempt information as defined in Section 12A of the Local Government Act 1972, paragraph 3; namely information relating to the financial or business affairs of any particular person (including the authority holding the information).

RESOLVED

That the press and public be excluded from the meeting for the following items as they contain exempt information as detailed in Section 100a of the Local Government Act 1972, Paragraph 3; information relating to the business or financial affairs of any particular person (including the Authority holding that information).

To confirm and sign as a correct record the exempt minutes of the meeting of the Committee held on 24 March 2015.

RESOLVED

That the exempt minutes of the meeting of the Pensions Committee held on 24 March 2015 be approved as a correct record and signed by the Chair.

To consider exempt information relating to agenda item 11.

The Committee considered the exempt information pertaining to agenda item 11.

Report of the Assistant Director, Finance, for the Committee to review the passive investment manager structure.

The Committee agreed the recommendation of the report.

There were no items of exempt urgent business.

The meeting closed at 21.05 hrs.