Agenda and draft minutes

Pensions Committee and Board
Wednesday, 15th September, 2021 7.00 pm

Venue: 40 Cumberland Road, London, N22 7SG

Contact: Fiona Rae, Principal Committee Co-ordinator  3541 Email: fiona.rae@haringey.gov.uk

Note: To watch this meeting, use the link on the agenda frontsheet 

Items
No. Item

1.

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.  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.

Minutes:

The Chair referred to the notice of filming at meetings and this information was noted.

2.

APOLOGIES

To receive any apologies for absence.

Minutes:

Apologies for absence were received from John Raisin (Independent Advisor), Keith Brown, and Craig Pattinson.

3.

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:

There were no items of urgent business.

4.

DECLARATIONS 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:

There were no declarations of interest.

5.

DEPUTATIONS / PETITIONS / PRESENTATIONS / QUESTIONS

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

Minutes:

There were no deputations, petitions, presentations, or questions.

6.

RECORD OF TRAINING UNDERTAKEN SINCE LAST MEETING

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.

Minutes:

It was noted that there had been a training session on 21 July 2021 for new members which had covered introductory information relating to the Local Government Pension Scheme. This was attended by Councillor Yvonne Say (Chair), Councillor Eldridge Culverwell (Vice-Chair), Councillor Patrick Berryman, Councillor Sarah James, Ishmael Owarish, and Craig Pattinson.

 

Councillor Yvonne Say (Chair), Councillor Eldridge Culverwell (Vice-Chair), Councillor Paul Dennison, Councillor Viv Ross, Ishmael Owarish, Craig Pattinson, and Randy Plowright had attended a training session on 15 September 2021 entitled: Multi Asset Credit.

 

The Chair reminded members to inform the Pensions Committee and Board officers whenever they had attended training so that this could be recorded.

7.

MEMBERSHIP

To confirm one employer member for a four year term of office.

Minutes:

It was noted that there had been a vacancy for one employer member for some time and that, following some suggestions for contacting employers that were made by the Pensions Committee and Board, some applications for employer members had been received. The Head of Pensions and Treasury noted that three applications were received and that, in accordance with the constitution, a panel consisting of the Chair of the Pensions Committee and Board and the Assistant Director of Finance (Deputy s151 Officer) selected the representative to be appointed. It was confirmed that, following this process, Craig Pattinson had been nominated as an employer member.

 

RESOLVED

 

To confirm Craig Pattinson as an employer member on the Pensions Committee and Board for a four year term of office.

8.

MINUTES pdf icon PDF 249 KB

To confirm and sign the minutes of the Pensions Committee and Board meeting held on 4 March 2021as a correct record.

Minutes:

In response to a question about the annual accounts, it was confirmed that the previous financial year accounts had been signed off and published. It was anticipated that there would be some delays in signing off the accounts for this financial year, due to the ongoing effects of the Covid-19 pandemic, but the process was expected to conclude in March 2022. It was added that this was a national issue and that no major issues were anticipated in the content of the accounts.

 

RESOLVED

 

That the minutes of the Pensions Committee and Board meeting held on 4 March 2021 be confirmed and signed as a correct record.

9.

PENSION ADMINISTRATION REPORT pdf icon PDF 217 KB

This report provides updates regarding:

 

·         Resourcing of the pensions administration team

·         Details of an employer joining the pension fund

·         Details of the intention to accept the pension scheme assets and liabilities of Clerkenwell Parochial School into the pension fund

Minutes:

The Interim Pensions Manager introduced the report which provided an update on the resourcing of the Pensions Administration Team, details of an employer joining the Pension Fund, and details of the intention to accept the pension scheme assets and liabilities of Clerkenwell Parochial School into the Pension Fund.

 

It was explained that there were still plans to recruit an apprentice in the Pensions Administration Team and that this was crucial for the long term stability of the team. It was commented that the apprentice role would require significant face to face training which would be difficult to deliver remotely and that a plan for reintroducing the team to the office would need to be put in place before an apprentice was appointed. It was explained that this was part of the wider programme for staff returning to the office, which was an evolving and ongoing conversation, and it was anticipated that the recruitment process would commence shortly. Following a question from the Committee, it was clarified that there would be one apprenticeship position, at least initially, as the Pensions Administration Team was small in size and had approximately 10 people.

 

The Interim Pensions Manager highlighted that the report sought approval for the admission of Lunchtime Catering Company (Devonshire Hill Nursery and Primary School) as a new employer to the Pension Fund. It was explained that this company employed a number of existing Pension Fund members and the admission would enable their continued membership.

 

It was also noted that the LDBS Academy Trust had recently approached the Pension Fund as their last active member at Clerkenwell Parochial School had ceased or was due to cease and, as a result, the school was facing a large cessation payment to the Islington Pension Fund for outstanding liabilities. It was explained that the Local Government Pension Scheme (LGPS) rules required a scheme to be closed as soon as there were no more active or contributing members. Following a conversation with the actuary and officers, it was proposed that the most effective way to manage the risk faced by the school having to make a large payment for pensions rather than focusing on education would be for the Haringey Pension Fund to absorb the school, subject to the school obtaining a direction from the Secretary of State and confirmation of the numbers with the actuary. It was clarified that, although the school in question was based in Islington, LDBS had a number of schools in Haringey which could be affected by the requirement to make a large cessation payment.

 

The Committee noted that the academy had been paying a larger contribution rate and deficit recovery contributions and it was enquired whether the Pension Fund should be absorbing this. The Assistant Director of Finance explained that academies often had smaller numbers of staff which could lead to statistically random funding positions. It was also noted that the position would be assessed by the actuary at the next Pension Fund valuation and that, if there was an  ...  view the full minutes text for item 9.

10.

PENSION FUND QUARTERLY UPDATE AND INVESTMENTS UPDATE pdf icon PDF 340 KB

This report provides updates on the Pension Fund’s performance for the quarter ended 30 June 2021:

 

·         Independent advisor’s market commentary

·         Investment asset allocation

·         Investment performance

·         Funding position update

·         London Collective Investment Vehicle (LCIV) Update

·         Update on the Fund’s accounts and annual report

Additional documents:

Minutes:

The Head of Pensions and Treasury introduced the report which provided an update on the Pension Fund and performance for the quarter. It was noted that the report included market commentary from the independent advisor and the annual report and statement of accounts.

 

It was explained that the Pension Fund’s investment assets currently had a market value of approximately £1.7 billion which was an increase of 4.72% since March 2021. This was likely due to the reopening of economies, after the most severe periods of the Covid-19 pandemic, which had a positive impact on financial markets. It was added that this was the highest value since the Covid-19 pandemic began. It was noted that the funding position for the Pension Fund was approximately 110% but that this might be subject to change following the full actuarial assessment in 2022.

 

It was noted that the Pension Fund allocation to equities had been increased several years’ ago and it was enquired when the strategic allocations would be reviewed, particularly in case of any inflation over the next year. Alex Goddard, Mercer, noted that inflation was a known risk which had been factored into some recent discussions, such as retaining the allocation to index linked gilts at 7% within the portfolio and allocating to the London Fund, property, and renewable energy to provide some resilience to and protection against the impact of inflation. It was highlighted that the Pension Fund was a long term investor and was therefore likely to make fewer tactical calls in the shorter term but that the allocation could be considered and rebalanced where necessary. It was acknowledged that the allocation to equities was currently overweight and that this could be considered for rebalancing; this was agreed by the Committee.

 

It was enquired how quickly the Pension Fund could change its allocations if required. Alex Goddard, Mercer, explained that, if there was a serious market event, it would be possible to raise this with officers and the Pensions Committee and Board at an urgent meeting which provided more immediate protection for the Pension Fund. This was consistent with the experience during the Covid-19 pandemic, when Mercer held calls with officers to discuss whether any changes should be made.

 

Cllr Dennison noted that the governance section of the annual report, which stated that no members of the Pensions Committee and Board were members of the Pension Fund, would need to be updated to reflect the fact that he was a deferred member of the Pension Fund.

 

The Committee enquired whether it would be possible to include the net asset value as at the last valuation by investment manager and asset class as part of the quarterly report so that this could be compared against the most recent quarterly valuations. The Head of Pensions and Treasury noted that this could be considered.

 

RESOLVED

 

1.    To note the information provided in respect of the activity for the quarter ended 30 June 2021.

 

2.    To review and rebalance the allocation to equities and  ...  view the full minutes text for item 10.

11.

LOCAL GOVERNMENT PENSION SCHEME UPDATE pdf icon PDF 318 KB

This paper provides updates on several developments relating to the Local Government Pension Scheme (LGPS). The issues covered are:

 

·         Awaited LGPS investment related consultations

·         Age Discrimination in the LGPS (commonly referred to as “McCloud”)

·         The Pensions Regulators (TPR) Consultation on the new Code of Practice

·         Increase in the Normal Minimum Pension Age from 6 April 2028

Additional documents:

Minutes:

The Head of Pensions and Treasury introduced the item which provided an update on several developments relating to the Local Government Pension Scheme (LGPS). It was noted that a number of consultations relating to the LGPS were awaited. This included a consultation on the implementation of a strengthened framework for LGPS investment and pooling. It was explained that there were eight asset pools across the country, which were quite different in their structures and approaches, and it was expected that the government would be consulting on a more defined framework to streamline the asset pools.

 

It was reported that a consultation on TCFD (Task Force on Climate-related Financial Disclosures) reporting was expected in October 2021. It was noted that Regulations had been issued by the Department for Work and Pensions (DWP) for private sector pension schemes and that, although these did not apply to the LGPS, the Ministry of Housing, Communities, and Local Government (MHCLG) was looking to similarly amend the LGPS Regulations. The Head of Pensions and Treasury explained that it was aimed to include any relevant considerations in the forward plan, provide training, and put an action plan in place to ensure that the Pension Fund could meet the requirements for TCFD reporting and explore any potential investment opportunities related to the implementation of TCFD.

 

In relation to age discrimination in the LGPS, commonly referred to as McCloud, it was explained that the LGPS Regulations had changed the scheme in 2014 from a final salary to a career average scheme and those who had been within 10 years of retiring raised claims of age discrimination against the government. The claims of age discrimination were upheld by the Supreme Court and it had been confirmed that a Bill would be introduced to rectify any issues. The Head of Pensions and Treasury noted that the impact on the Haringey Pension Fund was currently unknown but work was underway to ascertain this and it would continue to be considered by the Pensions Committee and Board.

 

The Committee noted that the McCloud case had been ongoing for several years and it was enquired why the liabilities for the Pension Fund had not been ascertained. The Assistant Director of Finance explained that the decision would be more significant in terms of the administrative work required than the monetary impact. It was noted that the Bill would set out the requirements for Pension Funds in more detail. The Interim Pensions Manager commented that the legislation would aim to ensure that the issue was rectified by 2024. It was added that the Haringey Pension Fund had commissioned a pensions administration supplier to start collecting data for the affected individuals and that this work would start imminently. It was explained that, when the scheme had become a career average scheme in 2014, the Pension Fund was no longer required to collect certain data but that the McCloud ruling would require the retroactivecollection of data which would be challenging with a number of ceased employers and  ...  view the full minutes text for item 11.

12.

LOCAL AUTHORITY PENSION FUND FORUM (LAPFF) VOTING UPDATE pdf icon PDF 210 KB

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.

Minutes:

The Head of Pensions and Treasury introduced the report which provided an update on the Local Authority Pension Fund Forum’s (LAPFF) voting activities on behalf of the Pension Fund. It was explained that the report provided a summary of the key resolutions, the LAPFF recommendations, and details of how the Pension Fund’s equity manager, Legal and General Investment Management (LGIM), had voted.

 

RESOLVED

 

To note the report.

13.

RISK REGISTER pdf icon PDF 192 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 and Treasury introduced the item and explained that the area of focus for review at this meeting was Investments.

 

The Committee noted that the risk of Brexit had been downgraded. The Head of Pensions and Treasury explained that the Pension Fund asset allocation was largely based overseas and would be subject to fewer direct risks relating to Brexit. It was added that, since the Brexit agreement had been finalised, it was easier to identify and assess the relevant risks.

 

In relation to investment risk INV06, it was enquired whether cash flow was regularly reviewed and whether the Pensions Committee and Board could be provided with further information on a regular basis. The Assistant Director of Finance explained that the Investment Strategy was reviewed after the last valuation in 2019 and this had included a consideration of cash flow (including taking income where possible from the assets to help meet pension payments). It was suggested that a high level report on cash flow could be provided to the Committee. The Head of Pensions and Treasury commented that there was also information in the annual accounts, in particular page 32 of the agenda pack; it was added that this was not considered to be an area of concern.

 

In relation to a question about the mismatching of assets and liabilities, the Assistant Director of Finance explained that it was difficult to assess the Pension Fund’s overall position accurately on a quarterly basis and that this was generally undertaken as part of the three year valuation process. It was added that the Fund would rely on Mercer to provide advice if there was a short term market event that impacted this. Steve Turner, Mercer, noted that the Pension Fund’s actuarial valuation would be undertaken in 2022 and that this was typically followed by an Investment Strategy review.

 

RESOLVED

 

1.    To note the Pension Fund’s risk register.

 

2.    To note that the area of focus for review at the meeting was Investments.

14.

FORWARD PLAN pdf icon PDF 193 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 for future training are also requested.

Additional documents:

Minutes:

The Head of Pensions and Treasury introduced the report which identified items for future meetings and sought members’ input. It was highlighted that members were required to complete The Pension Regulator’s toolkit and the training needs assessment. It was also requested that members updated officers whenever they attended relevant training so that this could be included in members’ training records.

 

In relation to the Task Force on Climate related Financial Disclosures (TCFD), it was confirmed that training would be provided before the Pensions Committee and Board meeting in December 2021. It was noted that there had been some progress in terms of the expected format and the government consultation.

 

It was commented that there had been some recent turnover in the Pensions Committee and Board membership. It was noted that the political parties had previously agreed to have minimal changes in membership due to the knowledge and training requirements; it was suggested that the Committee should raise this with the Whips.

 

RESOLVED

 

1.    To identify additional issues and training for inclusion within the work plan and to note the update on member training attached at Appendix 3 to the report.

 

2.    To complete the Pensions Regulator’s public sector toolkit and training needs assessment.

15.

NEW ITEMS OF URGENT BUSINESS

Minutes:

There were no items of urgent business.

16.

DATES OF FUTURE MEETINGS

To note the dates of future meetings:

 

2 December 2021

24 January 2022

15 March 2022

Minutes:

It was noted that the dates of future meetings were:

 

2 December 2021

24 January 2022

15 March 2022

17.

LONDON COLLECTIVE INVESTMENT VEHICLE MULTI ASSET CREDIT REVIEW pdf icon PDF 308 KB

This report provides an assessment of the suitability of the newly proposed London Collective Investment Vehicle 50/50 solution and outlines the considerations for the Pension Fund to remain invested in the updated strategy or opt for sole exposure to current manager.

Minutes:

Following consideration of the exempt information,

 

RESOLVED

 

1.    To note Mercer’s London Collective Investment Vehicle Multi Asset Credit Review Paper, appended as Confidential Appendix 1, and the advice contain therein.

 

2.    To agree to remain invested in the London Collective Investment Vehicle Multi Asset Credit Fund as this transitioned to the new 50/50 weighted strategy.

 

3.    To delegate to the Assistant Director of Finance (Deputy S151 Officer) to update and republish the Fund’s Investment Strategy Statement (ISS) to be consistent with this change.

18.

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 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).

19.

LONDON COLLECTIVE INVESTMENT VEHICLE MULTI ASSET CREDIT REVIEW

As per item 17.

Minutes:

The Pensions Committee and Board considered the exempt information.

20.

PENSION FUND QUARTERLY UPDATE AND INVESTMENTS UPDATE

As per item 10.

Minutes:

The Pensions Committee and Board considered the exempt information.

21.

EXEMPT MINUTES

To confirm and sign the exempt minutes of the Pensions Committee and Board meeting on 4 March 2021as a correct record.

Minutes:

RESOLVED

 

That the exempt minutes of the Pensions Committee and Board meeting held on 4 March 2021 be confirmed and signed as a correct record.

22.

NEW ITEMS OF EXEMPT URGENT BUSINESS

Minutes:

There were no new items of exempt urgent business.