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.  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.

Apologies for lateness were received from 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 16 below).

There was no 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

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 no deputations, petitions, presentations, or questions.

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.

The Chair noted that various, free training opportunities were available online. He encouraged members to undertake training, to keep a record, and to submit it so that it could be recorded. The Head of Pensions and Treasury noted that he would be circulating The Pensions Regulator’s tool kit analysis to members to identify and organise any required training.

It was noted that the Chair had undertaken the following training: Local Authority Pension Fund Forum AGM (July 2020), North London Pension Funds Chairs Forum (July 2020), Local Government Pension Scheme Management During Covid-19 (August 2020), LGPS Live: Local Government Pension Scheme issues briefing (September 2020), North London Pension Funds Chairs Forum (September 2020), Pension Investment Academy Fees, Cost and Transparency – Latest Developments (September 2020), Local Authority Pension Fund Forum (October 2020), LGPS Live: Local Government Pension Scheme, the administration challenge for 2021 (October 2020).

To agree the minutes of the Pensions Committee and Board meeting held on 7 July 2020.

Cllr Tucker noted that it had been agreed at the last meeting that the Palestine Solidarity Campaign would be contacted in relation to their offer to provide a list of pension fund investment companies which they considered to be in contravention of international law. It was explained that a response had been received and an update was requested. 

The Head of Pensions and Treasury noted that the response was being reviewed and officers had asked the fund manager for the equities portfolio to look into their investments; it was anticipated that an update would be available for the next meeting. The Chair added that the response from the Palestine Solidarity Campaign stated that they could not currently identify any investments in violation of international law. Cllr Tucker noted that they had offered to look at the pension fund’s investments in detail and asked that officers consulted with fund managers to obtain a full list of investments and shared this with the Palestine Solidarity Campaign. The Legal Advisor noted that the Pension Committee and Board had a fiduciary duty to invest funds in accordance with the Investment Strategy and should take advice from appropriate advisors.

The Chair confirmed that officers would investigate these issues and would provide an update at the next meeting. It was noted that the letter from the Palestinian Solidarity Campaign had only been received recently but that a copy would be circulated to members.

RESOLVED

That the minutes of the Pensions Committee and Board meeting held on 7 July 2020 be confirmed and signed as a correct record.

This report provides updates regarding:

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

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

·         This report details employers leaving the pension fund.

·         An update in relation to the current Coronavirus pandemic.

The Pensions Manager introduced the report which provided an update on pension administration matters and sought approval for the admission of Lunchtime Company Limited as a new admission body.

It was highlighted that Lunchtime had originally wanted to leave the pension fund but, after further communications, had decided to remain in the pension fund. The Pensions Manager explained that there would be an update at the next meeting to confirm that the individual schools would be remaining in the pension fund with Lunchtime.

In response to a question about Pabulum’s departure from the pension fund; it was confirmed that staff would be transferred (TUPEd) into a new company and would be joining the scheme in due course.

RESOLVED

1.    To note paragraphs 6.1 to 6.8 of the report which gave a breakdown of the amount of visits made to the Haringey Pension Fund website and an update regarding pension administration matters.

2.    To approve the admission of Lunchtime Company Limited as a new admission body to the Pension Fund for the reasons set out in paragraph 4 of the report, subject to their securing a bond or a guarantee from a third party in line with the Local Government Pension Scheme (LGPS) regulations, to indemnify the pension fund against any future potential liabilities that could arise or paying an increased contribution rate in lieu of a bond.

3.    To note the following admitted bodies will have left or will shortly be leaving the scheme as employers in the scheme. These are: Lunchtime Bounds Green, Lunchtime Devonshire Hill, Lunchtime Earlsmead, Lunchtime Welbourne School, Pabulum St John Vianney, Pabulum St Martin of Porres, Pabulum St Peter in Chains, The Octagon.

This report provides information to members of the Pensions Committee and Board regarding the government consultation to address age discrimination relating to protections introduced when the Local Government Pension Scheme was reformed in 2014, commonly referred to as ‘McCloud’.

The Head of Pensions and Treasury introduced the report which provided an update on the government consultation to address age discrimination relating to protections introduced when the Local Government Pension Scheme (LGPS) was reformed in 2014, commonly referred to as ‘McCloud’.

The independent advisor, John Raisin, noted that the consultation proposed a solution and amendments to the LGPS Regulations to extend protections to those who were not old enough to receive them originally. It was explained that this would only apply to active members between 1 April 2014 and 31 March 2022 but, as the final salary for comparison purposes was the salary when the member ceased being an active member or reached the age of 65, this could mean that calculations would need to be undertaken into the 2050s. As this could involve obtaining new data from employers, this could result in substantial additional work for the pensions administration team. It was added that there would need to be training and a project plan. It was also noted that, although the remedies would not have a significant financial impact on the fund as a whole, there could be significant variations between employers and, particularly for smaller employers, there could be material financial consequences.

Cllr Dennison noted that there would likely be a small impact on the pension fund as a whole but a larger impact on individuals and smaller employers; he enquired how the complexities of this issue would be investigated with employers and explained to employees. The independent advisor noted that every employer would be impacted and that, although few people were likely to benefit from this, all data for employees would need to be checked. It was explained that there would be significant communication with employers. The Pensions Manager noted that this issue would be a long term exercise and that Regulations were currently awaited; as such, there were no timescales at present. However, it was explained that the relevant data from employers in previous years had already been obtained and discussions were underway to discuss a programme to identify affected individuals. 

RESOLVED

To note the contents of this report and the verbal updates provided by officers and the fund’s Independent Advisor.

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 for future training are also requested.

In response to a question about the McCloud Remedy (age discrimination), it was confirmed that McCloud was on the risk register and a quarterly report was normally provided to the Pensions Committee and Board. It was explained that McCloud was included as a specific agenda item at this meeting and was therefore not in the quarterly report.

It was confirmed that no additional issues and training would be included in the work plan at present.

RESOLVED

To note the work plan, the training programme, and the update on member training, attached as Appendices 1-3 of the report.

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.

Cllr Chiriyankandath asked for more information about the three high risk areas identified in the risk register, items 22, 58, and 59; it was also enquired whether the Covid-19 pandemic impacted upon these risks. The Head of Pensions and Treasury explained that all red rated risks were monitored as regularly as possible. It was noted that, although there were moderate risk levels associated with administering pension benefits during the pandemic, the fund had been able to fulfil all of its obligations. The Pensions Manager noted that the pensions administration team had been working remotely and that the transition to remote working had worked well.

RESOLVED

1.    To note the risk register.

2.    To note the area of focus for review at the meeting was ‘Funding/ Liability’ risks.

The Fund is a member of the Local Authority Pension Fund Forum (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.

The Chair noted that the Local Authority Pension Fund Forum (LAPFF) made a number of recommendations for voting and enquired whether officers passed on these recommendations to investment managers. The Head of Pensions and Treasury confirmed that the recommendations were passed on; it was added that the recommendations and the outcomes of the votes were also circulated to Pension Committee and Board members.

The Head of Pensions and Treasury noted that the LAPFF voting recommendations and the outcomes of the votes were stated in the report. It was explained that there had been 14 votes and that the fund’s equity manager, Legal and General Investment Management, had broadly followed the LAPFF recommendations for voting at various Annual General Meetings (AGMs). However, the various AGMs had voted contrary to all of the LAPFF recommendations.

RESOLVED

To note the report.

This report provides updates on the following matters in respect of the three months to 30 June 2020:

·         Investment asset allocation

·         Independent Advisor’s Market Commentary

·         Funding Level Update

·         Investment Performance

·         London Collective Investment Vehicle (LCIV) Update

The Head of Pensions and Treasury introduced the report which provided a quarterly update on the pension fund. It was noted that the value of the fund had increased by approximately £128 million between March and June 2020.

In relation to the London Collective Investment Vehicle (LCIV), it was noted that representatives from the LCIV would be providing an update under item 15, specifically on the issue of appointing a second multi asset credit (MAC) manager. It was also noted that the Pensions Committee and Board had agreed in principle to move to a low carbon strategy; a RAFI Multi Factor Climate Transition Strategy had been created, was ready to launch, and a report would be presented to the next meeting.

Cllr Ross enquired why the appointment of a second MAC manager by the LCIV was considered to be a dangerous precedent, as set out in the report. The Head of Pensions and Treasury explained that the LCIV could appoint a second manager but it was considered that their proposal to mandate how the pension fund split its funding between the two managers might be overstepping into the role of the Pensions Committee and Board.

Randy Plowright enquired whether the appointment of a second MAC manager would have any cost implications for the fund. It was confirmed that the pension fund would not have to pay for the second manager unless the Pensions Committee and Board decided to allocate additional funds to that manager.

Cllr Ross noted that the independent advisor’s report noted that there was a possibility of negative interest rates and enquired how this would affect the pension fund. The independent advisor, John Raisin, explained that negative interest rates effectively meant that banks were charged for depositing in the Central Bank, which drove down yields and suppressed interest rates to support the economy. He commented that he did not believe this would have a significant effect as interest rates were already very low.

RESOLVED

To note the information provided in respect of the activity in the three months to 30 June 2020.

In July 2020, The Pensions Committee and Board considered a report on the Fund’s review of its investment strategy. The proposed changes in this report will allow the Fund to achieve and maintain 5% allocations to renewable energy and private equity in line with the Fund’s revised investment strategy. 

The Head of Pensions and Treasury introduced the report which sought approval to commit funding to maintain the commitment for 5% of the fund to be invested in private equity and in renewable energy. This would be achieved by committing £20 million to private equity through Pantheon and £65 million to the London Collective Investment Vehicle renewable energy strategy, subject to due diligence. The report also sought delegated authority for officers to implement these changes.

Following consideration of the exempt information,

RESOLVED

1.    To note the renewable energy and private equity commitment planning paper, appended as Confidential Appendix 1.

2.    That, so the Fund can achieve and maintain its commitment to 5% allocation to renewable energy and private equity, to approve the proposals set out in Confidential Appendix 1, namely to:

(i)         Commit £20 million to private equity via Pantheon (split £15 million into the Global Select 2019 Fund and £5 million into the Global Co-Investment V Fund);

(ii)        Commit £65 million to London Collective Investment Vehicle (LCIV) renewable energy strategy, subject to investment due diligence, once the LCIV strategy is in a position to launch; and

(iii)       Fund (i) and (ii) above from available cash holding and, where there are insufficient cash holdings, to fund from other liquid assets including: equity, bonds, multi asset absolute return and multi asset credit.

3.    To delegate authority to the Assistant Director of Finance to implement the above changes (if approved), on the advice of the Fund’s investment consultant, and after consultation with the Chair of the Pensions Committee and Board and Independent Advisor.

A verbal update will be provided in relation to the London Collective Investment Vehicle.

The Chair invited representatives from the London Collective Investment Vehicle (LCIV), Silvia Knott-Martin, Client Relations Manager, and Rob Hall, Deputy Chief Investment Officer, to provide an update.

Rob Hall explained that the pension fund was invested in the absolute return fund and the multi asset credit (MAC) fund. It was noted that the absolute return fund had performed well despite the volatile market but the MAC fund had not fared as well. It was explained that the MAC fund had quite a narrow portfolio and been under enhanced monitoring for over nine months; the LCIV had wanted this fund to have a wider portfolio and was now looking to appoint a second fund manager to access the full range of options, particularly given the existing market volatility and the need to adapt investments. Silvia Knott-Martin added that the LCIV was not changing the investment objective of fund and it was still aimed to achieve a return of 4-5%. The appointment of a second manager was aimed to complement the existing fund manager and to provide a more robust profile in the long term.

Steve Turner, Mercers, noted that the pension fund had appointed the fund manager, CQS, in 2014 explicitly as a MAC manager with a bias to high yield risk. It was explained that, when the LCIV had appointed CQS, it was decided to join the LCIV as it was a way to access the same manager for lower fees. It was added that there was no objection to the principle of manager diversification but that, in Haringey, the Pensions Committee and Board would need to undertake an extra layer of investigation to consider whether they were comfortable with the changes. Rob Hall acknowledged this position and noted that appointing a second manager was intended to provide a better risk return profile, accessing other parts of the credit spectrum, and react to struggling or changing markets.

The Assistant Director of Finance noted that, ultimately, the Pensions Committee and Board would need to take advice on the investments and, if the appointment of a second manager did not meet the fund’s objectives, there would be an issue. The points about multi manager funds were noted but it was enquired why the LCIV was only introducing this to the MAC fund; it was added that clearer articulation on the progression of multi manager funds would be required. Silvia Knott-Martin stated that she did not see the LCIV moving towards multi manager models for other funds in the short to medium term. In the case of the MAC fund, it was proposed to introduce a second manager to maximise investment opportunities. It was added that there would be a group discussion with investors on 11 November 2020 to address questions about strategy and for the LCIV to listen to investors.

The Head of Pensions and Treasury noted that CQS had not changed its investment approach and enquired what had happened to prompt the addition of a fund manager. Silvia Knott-Martin stated that  ...  view the full minutes text for item 15.

There were no new items of urgent business.

To note the dates of future meetings:

21 January 2021

4 March 2021

It was noted that the future Pensions Committee and Board meetings were scheduled for:

17 November 2020

21 January 2021

4 March 202

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).

It was noted that items 19-22 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).

RESOLVED

That the press and public be excluded from the meeting for consideration of items 19-22 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).

As per item 13.

The Committee considered the exempt information.

As per item 14.

The Committee considered the exempt information.

To agree the exempt minutes of the Pensions Committee and Board meeting held on 7 July 2020.

RESOLVED

That the exempt minutes of the Pensions Committee and Board meeting held on 7 July 2020 be approved as a correct record.

There were no new items of exempt urgent business.