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.

To receive any apologies for absence.

Apologies for absence were received from Councillor Patrick Berryman, Councillor Paul Dennison, and Randy Plowright. Apologies were also received from Councillor Eldridge Culverwell, Ishmael Owarish, and Craig Pattinson who were unable to join in person but joined the meeting virtually.

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 15below).

There were no items of 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 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 Yvonne Say (Chair), Councillor Dana Carlin, Councillor Viv Ross, and Craig Pattinson had attended a training session on 15 March 2022 entitled: Property Allocation. This session was also recorded and circulated to members who were not present.

Keith Brown noted that he had recently attended ‘Beyond the Obvious’, a Global Asset Management investment conference.

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

To confirm and sign the minutes of the Pensions Committee and Board meeting held on 2 December 2021 as a correct record.

There were no comments on the minutes of the Pensions Committee and Board meeting held on 2 December 2021.

This report provides updates regarding:

·         Membership update

·         Resourcing of the pensions administration team

·         Pensions administration software procurement

·         Pensions administration service performance in 2021

·         Update on McCloud remedy activities

The Interim Pensions Manager introduced the report which provided updates on the Pension Fund’s administrative activities. It was noted that the report included a statement on fund membership. It was also highlighted that, following some retirements, a new staff structure had been agreed for the Pensions Administration Team. It was noted that recruitment was underway to fill vacancies in the team and it was anticipated that interviews would take place in April 2022. In relation to a question about the recruitment, it was confirmed that the vacancies were for: a manager, two officers, a senior officer, and a pensions payroll officer. It was added that there were still plans to recruit an apprentice but that this would be undertaken when there were sufficient staff in the office to provide appropriate training and support.

The Committee was informed that the current contract for the provision of Haringey Pension Fund’s pensions administration software services was due to expire shortly and that an update on the contract award would be presented to a future meeting.

In relation to the McCloud remedy (an age discrimination case), it was noted that data was being gathered from employers to verify any gaps in information. It was highlighted that the remedies would be implemented once they were confirmed in legislation and any relevant guidance.

The Pensions Committee and Board noted the report and the information provided regarding the Pension Fund’s administration activities.

This report provides the following updates for the quarter ended 31 December 2021:

·         Independent advisor’s market commentary

·         Investment asset allocation

·         Investment performance

·         Funding position update

·         London Collective Investment Vehicle (LCIV) update

·         External audit update

The Head of Pensions and Treasury introduced the report which provided an update on the Pension Fund performance for the quarter ended 31 December 2021.

It was noted that, in the quarter, the market value of the Pension Fund’s investment assets was £1.818 billion, which represented an increase of 5.62%. The total funding level as at 15 March 2022 was at 110%. It was noted that the next valuation exercise was due to be undertaken in March 2022 and new contribution rates would apply from 1 April 2023.

In relation to the London Collective Investment Vehicle (LCIV), it was confirmed that, as at 28 February 2022, 30 of the 32 London Boroughs had agreed to amendments which were intended to resolve a technical issue regarding the accounting classification of the LCIV’s regulatory capital and had signed the written resolution to effect the change. The LCIV was engaging with the two remaining boroughs and the Financial Conduct Authority (FCA) had been informed of the current position.

Some members noted that the recent geopolitical issues in Russia and Ukraine would likely have a significant, long term effect on markets such as commodities and suggested that it would be appropriate to re-examine the Pension Fund’s investment strategy. The Head of Pensions and Treasury explained that the upcoming actuarial valuation of the Pension Fund’s liabilities would inform the investment strategy. The Independent Advisor noted that the use of more active managers had been considered by the Pensions Committee and Board in the past and could be revisited.

An update on the external audit was provided by David Eagles, BDO. It was noted that the audit had been expected to conclude in advance of the Pensions Committee and Board meeting in March 2022 but that some evidence and explanations were awaited, a number of which related to investments (which was a key area), bank reconciliations, and some benefits work. It was noted that there had been some delays in the benefits work due to software access issues. It was stated that all parties were working to complete the work as soon as possible and it was aimed to present the finalised audit to the Pensions Committee and Board in July 2022. It was added that it was not possible to sign off the Pension Fund accounts until the main Council accounts were finalised and that the main Council audit was subject to a national issue on the accounting treatment of infrastructure assets which would require additional time to resolve.

Some members enquired whether anything could be done to assist with the delays in obtaining information for the audit. The Head of Pensions and Treasury explained that one of the key issues was the type of query and whether it relied on third party input as this would inevitably take longer. In addition, it was noted that all of the outstanding queries were subject to further requests for information from the external auditors until satisfactory assurance had been obtained. It was added that officers were doing  ...  view the full minutes text for item 9.

To receive an update on CIPFA pensions knowledge and skills, to adopt the CIPFA 2021 Code of Practice on Local Government Pension Scheme (LGPS) Knowledge and Skills, and to approve the Training Policy.

The Head of Pensions and Treasury introduced the report which provided an update regarding the revised CIPFA guidance on Pensions Knowledge and Skills issued in June 2021. Taking this guidance into account, the report recommended the approval of a Training Policy for the Pensions Committee and Board members and senior fund officers. It was noted that the report contained two appendices for consideration: Appendix 1 was a paper by the Independent Advisor which outlined the recommended approach for the Pensions Committee and Board to adopt regarding training in the context of the new CIPFA guidance and Appendix 2 was the proposed Training Policy.

The Independent Advisor noted that the Haringey Pension Fund had a good approach to training and that the Training Policy had been updated when the Pensions Committee and Board had been formed in 2016. It was explained that the updated CIPFA guidance reflected a number of significant changes that affected the Local Government Pension Scheme (LGPS). For example, following MiFID II (Markets in Financial Instruments Directive), there needed to be assurance that members could make investment decisions and understand the relevant risks to retain the Pension Fund’s status as a professional investor.

It was highlighted that, in section 6.4 of the proposed Training Policy, Pensions Committee and Board members would be required to complete all modules of the Hymans Robertson LGPS online training within six months of appointment. The Independent Advisor noted that members did not need previous knowledge but were required to undertake the relevant training. In response to a query about the Hymans Robertson training, the Independent Advisor stated that this was a reasonably new training programme but that it was well regarded as introductory training. It was added that additional and specific training would also be provided for members.

The Pensions Committee and Board had no detailed comments in relation to the Training Policy but noted that sections 1.1 and 6.3 should say ‘senior officers’ rather than ‘senior officer’.

Members also noted that the membership of the Pensions Committee and Board included elected councillors. It was considered that, because of the knowledge and training requirements, it was important to retain the same councillors for the four year council term as much as possible. It was acknowledged that this was not always possible but that it would be helpful to raise this with councillors. It was agreed that the Pensions Committee and Board would write to the Whips after the election to request that those appointed to the Pensions Committee and Board were willing to commit to the four year term.

The Pensions Committee and Board noted the report.

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 Head of Pensions and Treasury introduced the report which provided an update on the Local Authority Pension Fund Forum’s (LAPFF) engagement and voting activities on behalf of the Pension Fund. It was noted that the LAPFF did not issue any voting alerts in the quarter but had focused on engagement. LAPFF had over 400 engagements, primarily to press for an annual ‘Say on Climate’ vote whereby companies and boards set out their strategy for transitioning to a net zero emissions business.

Some members noted that there was a LAPFF quarterly email update that was useful. The Head of Pensions and Treasury noted that he would request that all Pensions Committee and Board members were added to this mailing list.

The Pensions Committee and Board noted 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.

The Head of Pensions and Treasury introduced the item and explained that the area of focus for review at this meeting was Investments. It was noted that the red/ high risk scoring range set out in section 6.4 of the report should include any risks rated 16-25 (rather than 15-25). It was clarified that risks were scored as follows: green/ low risk was less than 10, the amber/ medium risk was 10-15, and the red/ high risk was 16-25.

It was highlighted that the report set out some key risks in the short to medium term. It was noted that the invasion of Ukraine by Russia was a key issue and had been rated as a red/ high risk as several countries had announced sanctions against Russian companies and Russia had banned foreign entities from liquidating their assets. However, the Fund had a very small exposure of approximately 0.9% of total fund assets to Russian companies through its investment in an emerging markets index tracker fund. It was explained that this had resulted in the Fund experiencing a very small, negative impact on performance in the immediate term but that, if the situation changed, more guidance on the treatment of these investments would be issued. It was added that this might have further implications on the markets generally and this would be continually monitored.

It was also noted that high inflation had been identified as an amber/ medium risk as Consumer Price Index (CPI) inflation in January 2022 was 5.5% and the Bank of England expected this to peak at 7.25% in spring 2022. It was explained that the Fund’s investment portfolio provided some degree of protection through its investments in various inflation linked strategies. It was added that officers, in consultation with the Fund’s investment consultants and independent advisor, would continue to monitor the impact of sustained high inflation on the Fund’s investment portfolio.

Steve Turner, Mercer, noted that a watching brief would be maintained in relation to the geopolitical event in Russia and Ukraine. It was added that the relevant assets had been written down to 0. It was also recommended that a scenario analysis was undertaken, as part of the upcoming Investment Strategy review, to test how the strategy would perform in different environments. It was noted that the risk of a stagflationary environment, where there would be slow or negative economic growth, had increased fairly significantly.

Some members queried the actuarial calculations and suggested that a rise in inflation rates may result in an increased surplus. It was also noted that the report referred to CPI but that many people considered that both CPI and Retail Price Index (RPI) figures did not reflect the impact on the average person. It was enquired whether there were any plans for the government to use a more realistic measure of inflation. The Head of Pensions and Treasury noted that CPI was linked to pensions liabilities and confirmed that he was not aware of any planned changes.

The Pensions Committee  ...  view the full minutes text for item 12.

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.

The Head of Pensions and Treasury introduced the report which identified items for future meetings and sought members’ input.

In response to a question about the proposed, new requirement for Hymans Robertson online training, the Head of Pensions and Treasury confirmed that this was due to be undertaken from July 2022.

It was added that the next actuarial valuation would be carried out in 2022-23; it was anticipated that the Pensions Committee and Board members would receive training from the Fund’s actuaries in mid-late 2022 and that the results would be available in late 2022 or early 2023.

The Pensions Committee and Board noted the report.

This report provides the Pensions Committee and Board (PCB) with a review of the Pension Fund’s property portfolio and outlines the options to address the investment portfolio’s current underweight position to property.

The Head of Pensions and Treasury introduced the report which provided a review of the Pension Fund’s property portfolio and outlined the options to address the investment portfolio’s current underweight position to property.

Following consideration of the exempt information, the Pensions Committee and Board noted the report.

There were no items of urgent business.

To note the (provisional) dates of future meetings:

11 July 2022

12 September 2022

22 November 2022

23 January 2023

21 March 2023

It was noted that the (provisional) dates of future meetings were:

11 July 2022

12 September 2022

22 November 2022

23 January 2023

21 March 2023

Items 18-21 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).

RESOLVED

That the press and public be excluded from the meeting for consideration of items 18-21 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); paras 3 and 5; namely information relating to the financial or business affairs of any particular person (including the authority holding that information) and information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

As per item 9.

The Pensions Committee and Board considered the exempt information.

As per item 14.

The Pensions Committee and Board considered the exempt information.

To confirm and sign the exempt minutes of the Pensions Committee and Board meeting on 2 December 2021 as a correct record.

There were no comments on the exempt minutes of the Pensions Committee and Board meeting held on 2 December 2021.

There were no new items of exempt urgent business.