Agenda and draft 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.  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’, 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 to the notice of filming at meetings and this information was noted.

To receive any apologies for absence.

Apologies had been received from Councillor Matt White, Councillor Nick da Costa and Ishmael Owarish 

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 15 below).

There were none.

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

The Public Service Pensions Act 2013 defines a conflict of interest as a financial or other interest which is likely to prejudice a person’s exercise of functions. Therefore, a conflict of interest may arise when an individual:

i)             Has a responsibility or duty in relation to the management of, or provision of advice to, the LBHPF, and

ii)            At the same time, has:

-       a separate personal interest (financial or otherwise) or

-       another responsibility in relation to that matter,

giving rise to a possible conflict with their first responsibility. An interest could also arise due to a family member or close colleague having a specific responsibility or interest in a matter.

At the commencement of the meeting, the Chair will ask all Members of the Committee and Board to declare any new potential conflicts and these will be recorded in the minutes of the meeting and the Fund’s Register of Conflicts of Interest. Any individual who considers that they or another individual has a potential or actual conflict of interest which relates to an item of business at a meeting must advise the Chair prior to the meeting, where possible, or state this clearly at the meeting at the earliest possible opportunity.

There were no declarations of interest.

To consider any requests received in accordance with Part 4, Section B, paragraph 29 of the Council’s constitution.

There were none.

Note from the Head of Legal and Governance (Monitoring Officer)

When considering the items below, the Committee will be operating in its capacity as ‘Administering Authority’. When the Committee is operating in its capacity as an Administering Authority, Members must have due regard to their duty as quasi-trustees to act in the best interest of the Pension Fund above all other considerations.

Councillor Bevan had reported his training to Democratic Services.

To confirm and sign the minutes of the Pensions Committee and Board meeting held on 13^th July 2023 as a correct record.

To follow.

The minutes of the 13 July 2023 meeting would be submitted to the next scheduled meeting.

This report provides the Pensions Committee and Board (PCB) with the following updates regarding Pension Fund’s administration activities:

a.       Pension Fund membership update

b.       Online Member Self Service portal update

c.       Update on McCloud project

d.       Update on Annual Benefit Statements

Mr Jamie Abbott, Pensions Manager, introduced the item.

The Committee and Board were informed that the most significant

impact of this impending change in regulations would be on operational

activity due to increased workload requirements of the pensions

administration team. It was further noted that a variety of employment

activity data would be required from scheme employers to assess the

impact on individual member pension benefits. The Committee and

Board were informed that the government planned to issue its final

guidance on 1 October 2023. It was expected that this guidance would

provide direction on the treatment of cases were data from employers

could not be sourced. The Head of Pensions noted that the government

was aware of this issue and highlighted the difficulties associated with

receiving this information from employers.

The meeting heard:

- In response to a query regarding what impact the McCloud Project would

have on the Pensions Fund, the meeting heard that not many members

were likely to be affected by the McCloud remedy. This was partly

because where the care scheme being 1/49th was a better factor

compared to 1/60th, the member would have had significant pay rises in

the last 2-3 years to be eligible for the underpin protection. There were

not many members that fell into that category.

- The data that was requested from the employers was the hours, pay and

any breaks in service. This was because under the pre 14 regulations, the

pension was calculated by the service of the member’s multiplied by

their final pay, multiplied by 1/60th as a factor. This changed from 1 April

2014 to a care scheme where the calculation was the member’s earning

for that year multiplied by 1/49th, multiplied by the revaluation factor

(normally the CPI factor), so the service would no longer form part of the

equation. From 1 April 2014, schemes stopped collecting that data due

to this change. However, the data was now needed to make the

comparison between the two pension schemes.

- Regarding the 40% of employers who had not responded, the guidance recommended that the Council perform an educated assumption. For example, if it could be determined that a member had earned £10,000 for one financial year, but had a full time equivalent of £20,000, it would be safe to assume that the individual had worked half of the allocated hours. However, the final guidance had not been issued yet. The government planned on the final guidance being implemented from 1 October 2023. Between this meeting and 1 October 2023, it was expected that there would be a clear guidance which would then be implemented. The government had already recognised non-responses from employers being an issue and Haringey was quite advanced in terms of getting the information. Some employers would have left the scheme many years ago, so it was very difficult to get a 100% return on responses. There was still time, however, to increase the response rate of 60%.

- In relation to a query  ...  view the full minutes text for item 8.

This report provides the Pensions Committee and Board (PCB) with the following updates on the Pension Fund’s performance for the quarter ended 30 June 2023:

a.       Independent advisor’s market commentary

b.       Investment performance

c.       Investment asset allocation

d.       London Collective Investment Vehicle (LCIV) update

e.       Funding position update

Mr Tim Mpofu, Head of Finance (Pensions & Treasury) and Mr John  Raisin, Independent Advisor, presented the item.

- A query was raised regarding the Fund’s funding position (143% as at 30 June 2023) and whether it was possible to reduce the amount of employee contributions given the cost-of-living crisis. In response, the Head of Pensions informed the Committee and Board that the employee contribution rates were set by the government and the recent estimate in funding level would have no impact on these rates. It was highlighted

to members that the primary driver behind the improvement in the funding level was the discount rate assumed by the Fund Actuary which had increase since the 2022 valuation. This had reduced the present value of the Fund’s liabilities, although asset values had remained relatively flat over the same period. The PCB was informed that actuarial

valuations took place once every three years and that is when employer contributions could be reviewed. It was further noted that the funding position update report was intended to assist the PCB in monitoring how the Fund’s investment portfolio was performing relative to its liabilities in-between valuation years.

- Concerns were raised regarding the lack of review of the investment strategy in recent years. It was noted that there had been some dramatic movements in the financial markets, particularly, related to the relative valuation of US markets and other global markets that had not been properly discussed by the Committee and Board. The concern was further expanded on to include a discussion regarding the investment approach of global indexes as well as the merits of passive versus active investment approaches. It was suggested that the Fund’s current investment governance process needed to be reviewed at some point in the near future. In response to the question, the Head of Pensions acknowledged the concern and suggested that a review of the Fund’s investment governance process could be included as a future agenda item. It was suggested that the Investment & Governance Working Group could discuss this process in detail to better inform the preparation and recommendations from officers and advisors. Fixed income was highlighted as an asset class that was attractively valued at

the time and was suggested as a notable consideration for the PCB’s strategic asset allocation decision. However, it was explained that this assessment would require a detailed review session. The item was later considered as part of the exempt agenda item 19.

RESOLVED:

That the Pensions Committee and Board note the information provided in section 6 of the report regarding the Pension Fund investment performance and activity for the quarter ending 30 June 2023.

This report presents the Haringey Pension Fund Annual Report and unaudited accounts for 2022/23 to the Pensions Committee and Board (PCB) for approval, subject to the successful completion of the external audit exercise.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), introduced the item.

The Head of Pensions noted that the Haringey Pension Fund’s annual report had been prepared by the pensions accounting team in accordance with the CIPFA guidance. It was further noted that the Pension Fund was required to publish its audited annual report by 1 December each year. The Council’s external auditor, BDO, was responsible for completing the audit of the annual report on time and provide assurance on the preparation of the annual report. It was explained that this assurance would be in the form of an audit opinion which would be issued alongside the audit opinion of the Council’s

Statement of Account.

- A query was raised regarding the governance process which provided

assurance to the Committee and Board that the annual report has been

prepared in accordance with guidance and the appropriate accounting

standards. In response, the Head of Pensions confirmed that as part of

the process, the external auditor would present their audit plan in

advance of each audit exercise to the Committee and Board and would

regularly provide subsequent updates on the progress made.

- A query was raised relating to the internal process for ensuring that the

annual report has been prepared in accordance with the appropriate

accounting standards. The Head of Pensions informed the Committee

and Board that report went through various checks consistent with the

finance team structure. Typically, the report was drafted by a senior

accountant and checked by senior fund officers which included the Head

of Pensions and the Assistant Director of Finance. The chief accountant’s

team would then conduct a further check before the Pension Fund Accounts were published.

- Further concerns were raised regarding the delay in the completion of

the external audit exercise since the financial year 20/21. Members of

the Committee and Board considered this current situation untenable

and requested that an official complaint be raised with the appropriate

authorities. It was further suggested that the officers should explore

alternative plans for ensuring assurance over the Fund’s financial

operations. It was further noted that this was a national issue and not

unique to Haringey. As such, the government was consulting on a

framework to address the backlog in local government audits. The

Committee and Board would be updated on this once it became clear

what the next steps were.

The Committee and Board commented that:

 As the audit profession was regulated, local authorities or the GLA should be making an official complaint that the industry was not upholding its duties. A ‘plan B’ was required as auditing and the

asset management industry were large operations. It should be

possible to commission an exam, test or review of whatever

particular element the Committee thought was most vulnerable to

give in order to provide comfort that accurate financial statements

were being reported whilst the industry was undergoing reform. In

response, the meeting heard that the issue had been escalated by

the Society of the London Treasurers. The  ...  view the full minutes text for item 10.

This report provides the Pensions Committee and Board (PCB) with an overview of the government’s consultation on Local Government Pension Scheme (LGPS): Next steps on investments, (“the Consultation”) which waspublished by the Department for Levelling Up, Housing and Communities (DLUHC) on 11 July 2023.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), introduced the

item.

The Head of Pensions informed the Committee and Board of the contents of the government’s open consultation on the Next Steps on Investments in the LGPS. Members were invited to commented on the draft response and a timeline for further comments was outlined. It was noted that the submission deadline would be 2 October 2023, and the Head of Pensions would submit the response on behalf of the Haringey Pension Fund before the deadline passed.

A query was raised on whether there would be a collective response from the London Borough. The Head of Pensions informed the Committee and Board that a several discussions had taken place with various stakeholders in the LGPS which had to some degree informed the preparation of the draft response. It was further noted that the London asset pool, the London CIV, would be submitting their own response

separately.

RESOLVED:

1. That the summary of the policy proposals included in the Consultation

included in section 6 of the report be noted and to provide any initial

comments and feedback to assist officers in drafting a response to the

Consultation.

2. That authority be delegated to the Head of Pensions and Treasury to

draft and submit the Consultation response on behalf of the Haringey

Pension Fund, in consultation with the Independent Advisor and the

Chair of the Pensions Committee and Board. A copy of the final

response would be circulated to members before it was submitted to

the DLUHC.

This paper has been prepared to update the Pensions Committee and Board on the Pension Fund’s risk register and provide an opportunity for the Pension Committee and Board to further review the risk score allocation.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), presented the item.

RESOLVED: That the Pensions Fund’s risk register be noted.

This paper provides an update on the Local Authority Pension Fund Forum’s (LAPFF) engagement and voting activities on behalf of the Pension Fund. The Pension Fund is a member of LAPFF, and the Pensions Committee and Board has previously agreed that the Pension Fund’s investment managers should cast its votes at investor meetings in line with the LAPFF voting recommendations.

Mr Tim Mpofu, Head of Finance (Pensions & Treasury), introduced the

item.

A query was raised regarding how it could be determined that Haringey

Pension Fund was a responsible investor in relation to carbon and

climate change. In response, the Head of Pensions highlighted the key

aspects of the investment portfolio that were considered responsible

investments. It was further noted that the pension fund had collaborated

with asset managers to become seed investors in several funds including

the RAFI Multi-Factor Climate Transition Fund and the LCIV Renewable

Infrastructure Fund.

Further comments were made in relation to how the Fund, through

LAPFF engaged with companies and requested that all its appointed

investment managers vote in line with LAPFF’s recommendations.

It was further noted that the responsible investment criteria would be a

key consideration as part of the ongoing strategy review work.

Feedback from members was welcome as to when this should happen,

but the plan was to do it around October 2023.

This paper has been prepared to identify and agree upon the key priorities for the Pensions Committee and Board over the upcoming months, as well as seek members’ input into future agendas.An overview of the planned investment strategy review work that follows the completion of the actuarial valuation exercise has also been included for members’ consideration.

Mr Tim Mpofu presented the item.

RESOLVED:

1.   That the progress made towards the agreed key priorities outlined in section 6 of the report be noted, specifically in relation to the investment strategy review work.

2.   That any additional matters and training requirements for inclusion within the Pensions Committee and Board’s forward plan be identified. 

There were none.      

To note the dates of future meetings:

4th December 2023

30th January 2024

5th March 2024

The next meeting would be held on 4 December 2023.

Items 18-20 are likely to be subject to a motion to exclude the press and public from the meeting as they contain exempt information as defined in Section 100a of the Local Government Act 1972 (as amended by Section 12A of the Local Government Act 1985); para 3 – namely information relating to the financial or business affairs of any particular person (including the authority holding that information) and para 5 – information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

Items 18-20 were subject to a motion to exclude the press and public from the meeting as they contained exempt information as defined in Section 100a of the Local Government Act 1972 (as amended by Section 12A of the Local Government Act 1985); para 3 – namely information relating to the financial or business affairs of any particular person (including the authority holding that information) and paragraph 5 –

information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

To confirm and sign the exempt minutes of the Pensions Committee and Board meeting on 13th July 2023 as a correct record.

To follow.

The minutes of the 13 July 2023 meeting would be submitted to the next scheduled meeting.

The Committee and Board considered the exempt information as per item 9.

There were none.