Agenda and minutes

Contact: Glenn Barnfield, Principal Committee Co-ordinator 

Items
No. Item

348.

FILMING AT MEETINGS

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.

Minutes:

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

349.

Apologies for absence

Minutes:

Apologies for absence were received from Councillor Dennison.

350.

Urgent Business

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).

Minutes:

A deputation had been received from Tottenham and Wood Green Friends of the Earth.

 

The deputation started by recognising the efforts taken by Haringey to be a pioneer amongst funds in divestment from fossil fuels by moving investments to low carbon funds. However, they stated the climate situation had progressively worsened since those actions were taken and felt the PCB owed it to its residents to now fully commit to 100% divestment from fossil fuels.

 

The Chair thanked the Friends of the Earth for their deputation and delivered the following response on behalf of the Fund.

 

“We share the concerns of Friends of the Earth regarding the damaging effects of fossil fuels on the environment, and thank them for their engagement with the Fund.  Haringey has previously sought to seek to reduce fossil fuel exposure via using low carbon options for equity investments, where this is possible and where this is consistent with our overriding fiduciary duty, and the majority of the fund’s equity holdings are now invested in low carbon funds. The Fund will discuss in its meeting on 5 March the possibility of moving the remainder of its equity portfolio into a low carbon fund – this is subject to due diligence, and will be followed by formal decision making at a later meeting, once all costs and implementation considerations are available. 

 

The fund’s use of low carbon funds is not the only strand to the fund’s ESG (environmental social and corporate governance) policy however. We have committed to invest c. £70m in renewable energy infrastructure, which the fund believes will deliver the required returns for the fund, but will also make a meaningful and impactful contribution to positive environmental practices. The level of the fund’s investments in renewable energy also remain under regular review. The fund takes its stewardship duties extremely seriously, and is a tier 1 signatory to the Financial Reporting Council UK Stewardship Code.

 

The fund firmly believes that engagement with companies who display undesirable characteristics or behaviours is the best way to effect change, and is therefore a member of the Local Authority Pension Fund Forum, (LAPFF), who carry out engagement activities on behalf of local government pension funds.  The LAPFF is one of the largest collaborative engagement groups, with 79 member funds, who hold around £230bn in funds under management.  They engage regularly with a variety of companies, including work to encourage companies to align their business models with a 2°C scenario and for an orderly transition to a low-carbon economy.  The LAPFF believes in engagement activities as opposed to divestment, as divestment could lead to investors having no leverage to influence and encourage positive behaviours. The Fund would draw a parallel between this type of activity and the engagement that the Fund and Friends of the Earth have had in recent years.”

 

Friends of the Earth confirmed they would look in greater detail at the position of the Fund, as outlined by the Chair. 

 

In response to a question by Friends of  ...  view the full minutes text for item 350.

351.

Declarations of interest and conflicts of interest

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.

 

Minutes:

In relation to Item 7, Councillor Ross declared an interest that he was a Member of Muswell Hill Sustainability Group.

352.

Record of training undertaken since last meeting

Note from the Assistant Director of Corporate Governance and 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.

Minutes:

Cllr White, Cllr Ross, Cllr Bevan, Cllr Chiriyankandath. Cllr Tucker, Randy Plowright, Keith Brown and Ishmael Owarish attended a training session delivered by the Head of Pensions, Thomas Skeen – 05/03/2020.

 

Further notification of training received prior to the meeting had been submitted as

follows:

 

Cllr Bevan

·         Local Authority Pensions Fund Forum - 29/01

·         DG PUBLISHING Local Authority Pension Fund Strategic Investment Forum - 06/02

·         SPS Investment Strategies for Pension Funds - 13/02

·         LBH Pensions training - 28/02

·         LBH Pensions trading - 05/03

353.

Minutes pdf icon PDF 189 KB

To agree the minutes of the Pensions Committee and Board meeting held on the 20th January 2020.

Minutes:

RESOLVED

 

That the minutes of the Pensions Committee and Board meeting held on 20th January 2020 be approved as a correct record.

354.

Investment Strategy Review pdf icon PDF 159 KB

This report presents the Fund’s investment strategy for the Pensions Committee and Board to review.

Minutes:

The Head of Pensions, Thomas Skeen, introduced this report which presented the Fund’s investment strategy for the Pensions Committee and Board to review. The Pensions Committee and Board (PCB) were taken through the report, as set out at pages 7 to 11.

 

The PCB next discussed the exempt appendices in private, as per Item 17.

 

Following the exempt discussion, the Chair invited the Tottenham and Wood Green Friends of the Earth to inform them that the Fund had agreed to make the in principle decision to utilise RAFI’s low carbon index when it was launched, subject to necessary due diligence, which would mean that all of the Fund’s equity portfolio would be invested in low carbon strategies. This would result in decreasing the carbon intensity footprint of these investments by 50%.

                             

RESOLVED

 

1.    That the PCB note the Investment Strategy Review appended as Confidential Appendix 1.

 

2.    That the PCB agree the following in principle decisions:

·         A further review exploring the alternative allocations and options for the Fund's index linked gilts.

·         Utilising RAFI’s low carbon index when this was launched, subject to necessary due diligence, which would mean that all of the Fund’s equity portfolio would be invested in low carbon strategies.

 

3.    The PCB agree to a top up of the Aviva long lease property investment of £25m, to bring this in line with the Fund’s Investment Strategy Statement allocation to the asset class.

 

4.    The PCB agree to amend the London CIV - CQS mandate so that income is drawn from this portfolio.

 

5.    The PCB agree to a further report specifically focussing on the Fund’s private equity, renewable energy and property investments, including implementation options to maintain the current allocation being presented at the July PCB meeting.

355.

Pensions Administration Report pdf icon PDF 250 KB

This report provides updates regarding: the amount of visits made to the Haringey pension fund website; the report reviews; and updates on the Pension Administration Strategy that has been sent to employers for comment

Additional documents:

Minutes:

The Pensions Manager, Janet Richards, introduced this report which provided updates on: the amount of visits made to the Haringey pension fund website; the report reviews; and updates on the Pension Administration Strategy that had been sent to employers for comment.

 

In response to questions on the report, the following information was provided:

·         Regarding the option to charge employers ‘additional recharges for poor performance’ listed on page 45, these had yet to be used by the Fund as employers would usually pay when they were warned they could be charged.

·         The Pension Administration Strategy would refer to committee ‘and board’ throughout the document for clarity.

·         ‘GAD’ referred to Government Actuary Department and would be clarified in the document.

·         Page 52 would be corrected to read ‘…April 2019 was £7026’.

 

RESOLVED

 

1.    To note that the breakdown of the number of visits made to the Haringey pension fund website.

 

2.    To note and approve the Pensions Administration Strategy Statement.

356.

Pension Fund Audit Plan - year to 31 March 2020 pdf icon PDF 124 KB

This report presents the audit plan prepared by the external auditors, BDO, for the audit of the Pension Fund accounts 2019/20 for the Committee and Board’s consideration.

Additional documents:

Minutes:

The Head of Pensions introduced this report which presented the audit plan prepared by the external auditors, BDO, for the audit of the Pension Fund accounts 2019/20 for the PCB’s consideration.

 

The external auditors took the PCB through the 2019/20 Audit Plan (appendix 1), as set out at pages 59 to 87.

 

In response to a question on the Audit Plan, it was noted that the management risk was a mandated audit risk. As management were in a unique position to influence the financial statement, it was necessary to investigate beyond their words and the auditor had to be able to conclude that there had been no undue influence by management.

 

RESOLVED

 

That the 2019/20 Audit Plan prepared by BDO be agreed.

357.

2019 Pension Fund Valuation pdf icon PDF 127 KB

This report seeks the Committee and Board to note the final actuarial valuation report as at 31st March 2019, and to note and agree the final version of the Funding Strategy Statement, which has been updated, to take account of all developments during the 2019 triennial valuation

Additional documents:

Minutes:

The Head of Pensions introduced this report which sought the Committee and Board to note the final actuarial valuation report as at 31st March 2019, and to note and agree the final version of the Funding Strategy Statement, which had been updated, to take account of all developments during the 2019 triennial valuation.

 

It was noted there was an accidental omission on page 114, with Fortismere School having not being included. The document would be updated with the school’s inclusion and republished on the website. The school’s contribution rate would be 17.7% for the next three years.

 

RESOLVED

 

1.    That the Committee note the final results of the triennial valuation of the Fund, as attached in the report at Appendix 1.

 

2.    That the Committee approves the Funding Strategy Statement as attached at Appendix 2.

358.

Forward Plan pdf icon PDF 74 KB

This report identifies topics that will come to the attention of the Committee and Board in the next twelve months and seeks Members input into future agendas. Suggestions on future training are also requested.

Additional documents:

Minutes:

The Head of Pensions invited the PCB to note this report on the Forward Plan, which detailed the topics that would be brought to the attention of the PCB through to March 2020. The report also sought Members’ input into future agenda items.

 

RESOLVED

 

1.    That the Committee and Board note and approve the forward plan and budgetary estimates attached at Appendices 1 and 2.

 

2.    That the Committee and Board note the update on member training attached at Appendices 3 and 4.

359.

Risk Register - Review/Update pdf icon PDF 123 KB

This report provides an update on the Fund’s risk register and an opportunity for the Committee and Board to further review the risk score allocation.

Additional documents:

Minutes:

The Head of Pensions introduced this report on the Risk Register. This was a standard item on the agenda and the PCB had a legal duty to review internal controls and the management of risks. The PCB were informed of the changes to the Risk Register, as shown in Appendix 1.

 

RESOLVED

 

1.    That the Committee and Board note the risk register.

 

2.    That the Committee and Board note the area of focus for review at the meeting is ‘Administration’ and ‘Communication’ risks.

360.

Pension Fund Quarterly Update pdf icon PDF 265 KB

To report the following in respect of the three months to 31 December 2019: Investment asset allocation; Independent Advisor’s Market Commentary; Funding Level Update; and Investment Performance.

Additional documents:

Minutes:

The Fund’s Independent Advisor, John Raisin, referred to his Market Background report covering October to December 2019 on pages 193 to 196 of the Agenda papers. The final Quarter of 2019 had been clearly positive for equity markets across the world.

 

Turning to 2020, the Independent Advisor commented that the resolution of some of the trade tensions between the United States and China in late 2019 and the further loosening of monetary policy by the US Federal Reserve and European Central Bank in the second half of 2019 had led to a general view that global stocks would likely continue their long upward trend through 2020. Indeed on 19 February 2020 the US S&P 500 Index reached a new record closing high of 3,386 almost 5% above the 31 December 2019 closing figure of 3,231. On 24 February 2019, however, equities across the globe began to rapidly fall following the decision of Italy to quarantine 10 towns in response to coronavirus. By the end of February the S&P 500 index had fallen 13% from its 19 February high.

 

On 3 March 2020, the world’s most important Central Bank, the United States Federal Reserve, reduced the target range for  federal funds rate (its main interest rate) by ½%, to 1 to 1 ¼%. John Raisin indicated however that action by the major central banks though of assistance to the economy, in the present circumstances, could not nearly in itself counter the potential economic impact of coronavirus. There had already been much commentary on measures which might mitigate the economic effects of coronavirus but the Independent Advisor said this had, he thought, been very well summarised by Jay Powell the Chair of the US Federal Reserve who at the press conference following the rate cut on 3 March had indicated that while the US Federal Reserve had eased monetary policy to “provide a meaningful boost to the economy” also stated that “The virus outbreak is something that will require a multi-faceted response. And that response will come in the first instance from healthcare professionals and health policy experts. It will also come from fiscal authorities, should they determine that a response is appropriate. It will come from many other public and private sector actors, businesses, schools, state and local governments.”

 

RESOLVED

 

That the information provided in respect of the activity in the three months to 31 December 2019 is noted.

361.

Local Authority Pension Fund Forum (LAPFF) Voting Update pdf icon PDF 293 KB

This report provides an update on voting activities on behalf of the Fund.

Minutes:

The Head of Pensions invited the PCB to note this report which provided an update on voting activities at the LAPFF on behalf of the Fund.

 

Following a question from the member of the public, the Chair informed that by having shares in organisations such as British Petroleum and Shell, it was possible to influence their behaviour and encourage greater ethical investment. The Chair noted that LAPFF worked to collectively influence organisations for the betterment of environmental and social impact.

 

RESOLVED

 

That the Committee and Board note this report.

362.

New items of urgent business

To consider any items admitted at Item 3 above.

Minutes:

There were no new items of urgent business.

363.

Exclusion of the Press and Public

To resolve

 

That the press and public be excluded from the meeting for consideration of item 15 and 16 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).

Minutes:

RESOLVED

 

That the press and public be excluded from the meeting for consideration of item 17 as it contains 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).

364.

Investment Strategy Review

As per item 7.

Minutes:

As per item 354.

365.

Pension Fund Quarterly Update

As per item 13.

Minutes:

As per item 360.

 

366.

Exempt Minutes

To agree the exempt minutes of the Pensions Committee and Board meeting held on the 20th January 2020.

Minutes:

RESOLVED

 

That the exempt minutes of the meeting held on the 19th November 2019 be

approved as a correct record of the meeting.