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Agenda and minutes

Venue: MS Teams

Contact: Felicity Foley, Acting Committees Manager 

Note: To watch the meeting, click the link on the agenda frontsheet or paste the following into your browser - https://teams.microsoft.com/l/meetup-join/19%3ameeting_OWUzNzk1YWQtODcwZS00OWUwLThiOGUtNDZiMjRlYWI4M2Ji%40thread.v2/0?context=%7b%22Tid%22%3a%226ddfa760-8cd5-44a8-8e48-d8ca487731c3%22%2c%22Oid%22%3a%2202aebd75-93bf-41ed-8a06-f0d41259aac0%22%2c%22IsBroadcastMeeting%22%3atrue%7d 

Items
No. Item

367.

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.

368.

Apologies for absence

Minutes:

None.

369.

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 items 16 & 22 below).

Minutes:

None.

370.

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:

None.

371.

DEPUTATIONS / PETITIONS / PRESENTATIONS / QUESTIONS

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

Minutes:

None.

372.

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:

Councillor John Bevan – Webinar 3 June 2020 -

LGPS Local Government Pension Schemes. Investment costs transparency and Navigating the Pandemic – implications for the management of  investment risk.

 

All Members attended LBH Pension training prior to the meeting 7 July 2020.

373.

Minutes pdf icon PDF 524 KB

To approve the minutes of the meeting held on 5 March 2020.

Minutes:

RESOLVED

 

That the minutes of the Pensions Committee and Board meeting held on 5 March 2020 be approved as a correct record.

374.

Pensions Administration Report pdf icon PDF 448 KB

The report provides an update regarding:

·                The amount of visits made to the Haringey pension fund website.

·                This report presents details of new admissions to the pension fund.

·                An update in light of the current Coronavirus pandemic and how this has impacted the Fund’s pensions administration.

Minutes:

The Pensions Manager, Janet Richards, introduced this report which provided updates on: the amount of visits made to the Haringey pension fund website; new admissions to the pension fund and an update in light of the current Coronavirus pandemic and how this has impacted the Fund’s pensions administration.

 

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

1.         Recipients of the annual benefit statements would be notified of the change to online publication only of their statements via the member self-service portal.

2.         The increase in deaths in the last quarter is an increase of over 61% and it could not be determined what proportion of this could be attributed to the pandemic. Further details to be provided.

 

RESOLVED

 

1.         To approve the admission of Hertfordshire Catering Ltd as a new employer to the Pension Fund in respect of the following catering contracts:

·      St Martin of Porres School;

·      St John Vianney School;

·      St Pauls Catholic School; and

subject to Hertfordshire Catering Ltd securing a bond or a guarantee from a third

party in line with the LGPS regulations, to indemnify the pension fund against any

future potential liabilities that could arise or paying an increase contribution rate in

lieu of a bond.

 

2.         To approve the admission of Caterlink Ltd as a new employer to the Pension Fund, in respect of a catering contract with Stroud Green Primary School, subject to their securing a bond or a guarantee from a third party in line with the LGPS regulations, to indemnify the pension fund against any future potential liabilities that could arise or paying an increase contribution rate in lieu of a bond.

375.

Pension Fund Quarterly Update and Investments Update pdf icon PDF 518 KB

To report the following in respect of the three months to 31 March 2020:

·                Investment asset allocation

·                Independent Advisor’s Market Commentary

·                Funding Level Update

·                Investment Performance

 

This report also provides members with various updates regarding on how the Coronavirus pandemic has impacted upon the fund’s investments, and annual report and accounts.

Additional documents:

Minutes:

The Head of Pensions introduced this report which sought to provide members of the committee with various updates regarding how the Coronavirus pandemic has impacted upon the fund’s investments, and annual report and accounts for the previous quarter to 31 March 2020. The report included information relating to investment asset allocation, independent Advisor’s Market commentary, funding level update and investment performance.

 

The following points were noted:

1.         Approval for the fund’s accounts and annual report for 2019/20 are expected to be approved by 30 November in line with the delayed deadline issued by the Government this is due to delays in receiving valuation information for some of the fund’s assets as well as notification that the funds auditors, BDO, would not begin audit work until August 2020.

2.         At the most recent valuation 31 March 2020, the Fund had a funding position of 100.4% which corresponds to a net surplus of £6m, which has decreased to an indicative deficit of £102m as at 31 March 2020.

3.         Value of the fund decreased by £145.2m between December 2019 and March 2020, however, much of that decrease was regained within the months of April and May, with the fund increasing by an indicative £113.3m by the end of May.

4.         Concern was raised respecting the coronavirus pandemic and the potential impact it would have on financial markets.

 

The Fund’s Independent Advisor, John Raisin, referred to his Market Background report covering January to March 2020 on pages 27 to 30 of the agenda papers providing detailed information for the members of the committee. It was noted that 2020 began positively for both financial markets and the global economy. However, the realisation of the health and economic implications of Coronavirus during late February and March 2020 resulted in both a huge worldwide equity market sell off and a closedown of large parts of the world economy. A financial market collapse was only avoided due to huge economic and monetary policy intervention, and in particular the intervention of the US Federal Reserve. It was noted that the downturn would be far more difficult to resolve than that of 2008 due to the fact that this crisis was a result of a deadly disease which  is affecting all economic sectors while the previous one was a financially originated and focussed crisis.

 

RESOLVED

 

1.    That the information provided in respect of the activity in the three months to 31 March 2020 is noted.

2.    That the information provided in respect how Coronavirus has impacted on the fund is noted.

376.

Investment Strategy Review pdf icon PDF 236 KB

In March 2020, The Pensions Committee and Board (PCB) considered a report on the Fund’s investment strategy review.  A number of decisions were made in the March 2020 meeting (some in principle), and this report follows on from the last paper with options and a recommendation as to changes to be made to the fund’s investment strategy.

 

Minutes:

The Head of Pensions, Thomas Skeen, introduced this report which presented a review of the Fund’s investment strategy that was considered at the previous meeting of the PCB in March 2020. The report follows on from the last paper with options and a recommendation as to changes to be made to the fund’s investment strategy. The Pensions Committee and Board (PCB) were taken through the report, as set out at pages 31 to 36.

 

The PCB noted that the decision to switch to fixed gilts in early 2020 had benefited the fund by approximately £10.7m.

 

The PCB discussed the exempt appendices in private, as per Item 20.

 

RESOLVED

 

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

 

2.         That the Committee approves a change to the fund’s target investment strategy to implement the ‘strawman portfolio 1’ as shown in Confidential Appendix 1, namely to:

·      Increase the allocation to equity by 2.5%

·      Increase the allocation to multi-asset credit by 3.0%

·      Reduce the allocation to infrastructure debt by 0.5%

·      Reduce the allocation to gilts by 5.0%

 

Alternatively, the Committee and Board could choose to implement ‘strawman portfolio 2’ as detailed in the Mercer paper in Confidential Appendix 1.

 

3.         That the PCB delegate authority to the Assistant Director of Finance to implement the above changes (if approved), on the advice of Mercer, and in conjunction with the Chair of the PCB and Independent Advisor.

 

4.         That the PCB delegate authority to the Assistant Director of Finance to update and republish the fund’s Investment Strategy Statement consistent with decisions made above.

 

377.

Pensions Actuary Contract pdf icon PDF 204 KB

In order for Haringey (the Council) to carry out its functions as an Administering Authority under the Local Government Pension Scheme (LGPS), the Council must appoint a fund actuary for the pension fund.  The fund’s actuary provides a number of key technical services for the fund, including the valuation of the fund’s liabilities and calculation of employer contribution rates.

 

The current contract for actuarial services with Hymans Robertson LLP will expire on 31 July 2020, this contract was let from 1 August 2017 for an initial 3 year period, with an option to extend for a further 3 years from 1 August 2020.  The contract was let following a procurement exercise carried out by officers, using the National LGPS Framework which is hosted by Norfolk County Council.  The Framework Agreement is fully compliant with EU procurement processes.  This report seeks the approval of the pensions Committee and Board to undertake this extension.

 

Minutes:

The Head of Pensions introduced this report which sought approval from the Committee for a contract extension of the current actuarial services by Hymans Robertson LLP.

 

It was noted that the contract was due to expire on 31 July 2020 following an initial contract period of 3 years and that having a fund actuary appointed at all times was a requirement if the LGPS regulations. The PCB acknowledged that the relationship between the Council and Hymans Robertson had been successful over the course of the contract and noted that their performance had delivered value for the pension fund and its employers.

 

The PCB were advised that all costs of the contract would be met fully by the pension fund, meaning there would be no direct cost implications for the Council.

 

RESOLVED

 

That the Pensions Committee and Board approve an extension of the current contract with Hymans Robertson LLP for actuarial services as allowed under the contract for the period 1 August 2020 – 31 July 2023 in accordance with CSOs 3.03 and 10.02.1 at an estimated value of £239k.

 

378.

Local Government Pension Scheme Governance Update from Independent Advisor pdf icon PDF 205 KB

The purpose of the paper is to provide information to members of the Pensions Committee and Board regarding various changes underway within the Local Government Pension Scheme (LGPS).

 

Additional documents:

Minutes:

 

The Fund’s Independent Advisor, John Raisin, provided an update by way of his LGPS report providing information to members of the Pensions Committee and Board regarding various changes underway within the Local Government Pension Scheme (LGPS).

 

The committee noted the information contained therein the report regarding good governance in the LGPS project and the outcome of a legal case relating to the LGPS in respect of which the Supreme Court delivered its judgement on 29 April 2020.

 

The following 3 points were highlighted to the PCB:

 

  1. The Judgement issued by the Supreme Court on 29 April 2020 determined that the Secretary of State exceeded his powers,
  2. The Judgement did not in any way suggest that Administering Authorities, such as the London Borough of Haringey, were not completely responsible for investment decisions relating to their LGPS Fund,
  3. The Judgement did not undermine the overriding duty of the Administering Authority, in the words of the 2016 Statutory Guidance on Preparing and Maintaining an Investment Strategy Statement, that “…schemes should make the pursuit of a financial return their predominant concern…”

 

It was agreed for the Palestine Solidarity Campaign to be contacted regarding their offer to supply names of companies in contravention of international law. Enquiries to be made with fund managers to establish the types of companies invested in and whether a list existed similar to the Sullivan Principles in relation to disinvestment from Israel.

 

RESOLVED

 

That the Committee and Board note the contents of this report, and any other verbal updates provided by officers and the fund’s Independent Advisor in the meeting.

 

 

379.

Forward Plan pdf icon PDF 91 KB

The purpose of the paper is to identify topics that will come to the attention of the Committee and Board in the next twelve months and to seek 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 in the next twelve months. It was noted that due to the current Chair stepping down there would be a need to agree agenda items for this extended period as a new chair would not be appointed until the next Full Council meeting. The report sought Members’ input into future agenda items as listed on page 45 of the agenda pack.

 

It was agreed that if changes are to be made then this could be done by PCB members via email in the absence of a chair.

 

It was agreed that once a response was received from Palestine Solidarity Campaign then this would be considered under the Governance Report item of the agenda for a future meeting.

 

RESOLVED

 

1.    That the Committee and Board note and approve the forward plan.

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

 

380.

Risk Register - Review/Update pdf icon PDF 527 KB

This paper 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.

 

The PCB noted all new COVID-19 risks added to the register as set out at pages 50 to 51 of the report.

 

An error was noted under paragraph 6.5 of the report which stated “that none of the above risks have been flagged as ‘red’ risks to date” as risk INV12 had been rated red.

 

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.

 

 

381.

Local Authority Pension Fund Forum (LAPFF) Voting Update pdf icon PDF 212 KB

The Fund is a member of the LAPFF and the Committee and Board has previously agreed that the Fund should cast its votes at investor meetings in line with LAPFF voting recommendations. 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.

 

RESOLVED

 

That the Committee and Board note this report.

382.

New items of urgent business

Minutes:

None.

383.

Dates of future meetings

To note the dates of future meetings:

10 September 2020

17 November 2020

21 January 2021

4 March 2021

 

Minutes:

20 October 2020

 

The PCB gave thanks to Cllr White for his work on behalf of the Committee as Chair and Thomas Skeen in his role as Head of Pensions.

384.

Exclusion of the Press and Public

Items 19-22 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).

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).

 

385.

Pension Fund Quarterly Update and Investments Update

To consider exempt information pertaining to item 9.

Additional documents:

Minutes:

The Committee considered the exempt report.

386.

Investment Strategy Review

To consider exempt information pertaining to item 10.

Minutes:

The Committee considered the exempt report.

387.

Exempt minutes

To approve the exempt minutes of the meeting held on 5 March 2020.

Minutes:

RESOLVED that the exempt minutes of the meeting held on 5 March 2020 be approved as a correct record.

388.

New items of exempt urgent business

Minutes:

None.