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. 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.

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.

Apologies for absence were received from Cllr’s Blake & Tucker.

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 unrestricted Urgent Business will be dealt

with under item 18 below, new items of exempt urgent business will be dealt

with under agenda item 24 below).

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.

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.

Cllr Bull, Cllr Bevan, Cllr Ross, Cllr McShane, Keith Brown, Randy Plowright and Ishmael Owarish had attended a training session on Local Government Pension Scheme (LGPS) Legislation, Governance, Roles & Responsibilities in advance of the meeting.

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

Cllr C Bull: Schroders Pension Trustee Training 21/4/2017

Cllr Bevan: Barnett Waddington, Today’s Trustee 28/03/17

AON Factor Investing and Private Markets 29/03/17

STOXX Innovate2invest 2017 Conference 30/03/2017

Local Authority Pension Fund Forum 11/04/2017

London CIV Sectoral Joint Committee 12/04/2017

SCS Investing for Pension Funds 20/04/2017

Schroders Pension Trustee Training 21/04/2017

P&LSA Integrating Pensions and Lifetimes savings 26/04/2017

PIA Cash Flow Challenges for Pension Funds 26/04/17

Robeco, Explore Factor Investing 09/05/2017

SPS Value for Money and Low Cost Investing Strategies for Pension Funds 11/05/2017

AON Fixed Income and Hedge Funds 23/05/2017

IPE Beyond Factor Investing 06/06/2017

Transition Pathway Initiative, Low Carbon Economy and Pension Fund 07/06/2017

SPS LDI Strategies & Risk Management Developments for Pension Funds 08/06/2017

P&LSA The Future of Pension Scheme Funding 13/06/2017

CIPFA The Local Government Pension Scheme, An Introduction to Pensions and Pooling 20/06/2017

IPE Pensions Risk & Asset Allocation 22/06/2017

LAPFF Business Meeting 27/06/2017

Sustainable Investing Briefing 07/07/2017   

To consider the minutes of the meeting of the Committee and Board held on 27 March 2017 and confirm these as a correct record.

RESOLVED

That the minutes of the meeting held on 27 March be approved as an accurate record.

Report of the Interim Deputy Chief Executive & Chief Financial Officer to

update the Committee and Board on Pensions administration matters.

The Committee received a report on administrative issues related to the Haringey Pension Scheme, details of four new admissions to the pension fund and notification of the potential merger of the College of Haringey, Enfield and North East London with the Capital City College Group.

The Committee sought clarification on a point relating to the new admission body to the fund, specifically that as the agreements were closed and new members could not be admitted whether that applied to new employees and if so what options would there be for them. The officer advised that the new provider would have to allow any new employees to join their own company pension scheme as according to regulations each employer is required to provide a pension scheme. The Committee were also advised that there is no time limit for employees who were included in the closed admission agreement from joining the scheme.

RESOLVED

That the Committee approve:

·         the admission of Hillcrest Cleaning Ltd as a new employer to the Pension Fund, 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.

·         the admission of Pabulum as a new employer to the Pension Fund, 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.

·         the admission of Hertfordshire Catering Ltd as a new employer to the Pension Fund, 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.

·         the admission of ISS World Ltd as a new employer to the Pension Fund, 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

That the Committee note:

·         the potential merger of the College of Haringey, Enfield and North East London with the Capital City College Group with a potential transfer date of 1 November 2017.The CONEL board decided, as part of the proposed merger, to transfer its Local Government Pension Scheme pensions funds from the London Borough of Haringey scheme into the London Pension Funds Authority. All assets and liabilities will transfer with the college if the transfer takes place, so Haringey Pension Fund will not be disadvantaged or left with a historic deficit from the college.

Report of the Interim Deputy Chief Executive & Chief Financial Officer highlighting the rationale behind the recommendation to introduce a new multi asset absolute return investment strategy.

The Head of Pensions gave an overview of the background surrounding this report as it was a follow up from the investment strategy review conducted by Mercer which resulted in the Committee holding an interim meeting in early July comprising of training on  multi asset absolute return investment strategies and presentations from four multi asset absolute return managers appointed by the CIV. This was done in preparation for the Committee to consider and take a decision on whether it should change the fund’s investment strategy to incorporate an allocation to multi asset absolute returns.

RESOLVED

·         The Committee and Board considered the report and recommendation outlined by Mercer in Confidential Appendix 1: namely to decrease the Fund’s exposure to listed equity by 7.5%, and to introduce new allocation in the fund’s investment strategy for 7.5% to a multi asset absolute return strategy.

·         That the Committee and Board agreed to proceed with Option 2: to decrease the allocation to listed equity by 7.5%, and introduce new allocation in the fund’s investment strategy for 7.5% to a multi asset absolute return strategy, subject to the fund actuary confirming that expected returns will remain consistent with the funding plan.

As option 2 was agreed the Committee and Board also resolved to:

·         Hold a formal fund manager selection meeting with multi asset absolute return managers available on the London CIV: this meeting would be attended by members of the Committee and Board, officers, the fund’s independent advisor and investment consultant.

·         Grant delegated authority to the Chief Financial Officer to appoint a multi asset absolute return fund manager based on the outcome of the fund manager selection meeting and the recommendation of those who attend this meeting.

Report of Interim Deputy Chief Executive & Chief Financial Officerhighlighting possible changes to the fund’s investment strategy and detailing the Environmental, Social and Governance (ESG) and sustainability indices review.

Mercer gave a summary of low carbon passive equity investing and an overview analysis of past performance of the passive equity portfolio.

RESOLVED

That the Committee & Board in conjunction with further training on ESG agreed to pursue option 4: the committee agreed to increase the allocation to the low carbon mandate to 50% of developed market equities.  It was felt that the argument for the inclusion of an ESG index tracking fund is one which is compelling, therefore the Committee agreed to meet with some of the leading index providers to further their knowledge base in this area, prior to making any changes to the fund’s investment strategy.   Upon the recommendation of Mercer, the Committee also agreed to meet with RBC: who have been appointed by the London CIV to manage to sustainable equity mandate.

Report of Interim Deputy Chief Executive & Chief Financial Officerdetailing the review of social impact investing.

The Head of Pensions introduced Mercers report as an introductory overview of social impact investing.

RESOLVED

That the Committee and Board agreed:

·         To focus attention specifically on private equity and real estate as potential asset classes for social impact investment going forwards.

·         To arrange an interim half day or evening training session for members of the Committee and Board, to meet with some social impact investment fund managers, as the Committee and Board begins to build up a knowledge base in this area in order to consider investment in the future. The aim would be to hold this meeting in September or October.

·         That following this interim meeting, to agree that a further report on the social impact investing topic be presented to the November Pensions Committee and Board meeting.

Report of Interim Deputy Chief Executive & Chief Financial Officer on the draft Pension Fund Annual Report and Accounts for 2016/17

The Head of Pensions presented the Fund’s draft annual report and accounts for 2016/17 and notified the Committee that the final audited report would be included in September’s meeting. He also highlighted that the value of the funds assets had seen an increase of £261m and also that Haringey’s fund performance was the second highest in the PIRC benchmarking group.

The Committee inquired as to which fund manager had not signed up to the United National Principals of Responsible Investment and also more details were requested for the ‘other funds managed’ category in the analysis of investments table.

Actions: Head of Pensions

RESOLVED

·         The Committee noted the content of the draft annual report and accounts.

·         The Committee and Board approved the refreshed versions of the Governance and Compliance statement and Communications policy

which were included as Appendices 2 and 4 to the Annual Report.

Report of Interim Deputy Chief Executive & Chief Financial Officer seeking approval to award a new Pensions Administration System Contract

Mercer were asked to leave the meeting.

The Committee & Board considered the report on the Pensions Actuarial Systems Contract and discussed the procurement process that was conducted for a new contract as the existing one would come to an end on 31 July 2017. 

RESOLVED

That the Pensions Committee and Board grant approval, in accordance with Contract Standing Orders (CSO) 3.03 and 9.07.1(d) for the Council to enter into a contract with Hymans Robertson LLP for the provision of actuarial services for an initial 3 year term at an estimated value of £225k with an option for a further extension of three years for a further estimated value of £225k (subject to indexation).

Mercer Returned to the meeting.

Report of the of Interim Deputy Chief Executive & Chief Financial Officerto provide an update to Committee on progress toward compliance with Scheme Advisory Board key performance indicators, to highlight areas where improvement is still needed in order to achieve full compliance and to provide an update on progress toward implementing the recommendations from the Governance Review that was undertaken by the Independent Advisor to the Fund.

The Committee & Board considered the Governance report and noted that the score against the SAB’s key performance indicators had improved by two points since the last meeting due to the funds investment performance being second in its peer group.

RESOLVED

·         The Committee and Board noted progress since the last report to the

Committee and Board on performance against SAB’s key indicators and recommendations from the governance review.

·         The Committee and Board noted that Haringey will request that all managers sign up to SAB’s cost transparency code, and noted the contents of Appendix 3: a report on the new code of transparency from the Fund’s Independent Adviser John Raisin.

Report of the of Interim Deputy Chief Executive & Chief Financial Officerto identify topics that will come to the attention of the Committee in the next twelve months and to seek Members input into future agendas. 

The Committee and Board considered the quarterly report on the forward plan, as introduced by Thomas Skeen, Head of Pensions.

It was agreed that the Pension Regulator’s online toolkit would be circulated to members of the Committee.

Action: Head of Pensions

RESOLVED

The Committee noted the invitation to identify additional issues & training for inclusion within the work plan and to noted the update on member training attached at Appendix 3.

Report of the of Interim Deputy Chief Executive & Chief Financial Officerto provide an update on the Fund’s risk register and an opportunity for the Committee to further review the risk score allocation.

The Committee and Board considered the report on the Fund’s risk register, introduced by Thomas Skeen, Head of Pensions.

RESOLVED

·         That the Committee noted the risk register.

·         That the Committee noted the area of focus for this review at the meeting is ‘Funding’ and ‘Liability’ risks.

Report of the of Interim Deputy Chief Executive & Chief Financial Officerto report the following in respect of the three months to 31^st March 2017:

·         Investment asset allocation

·         Investment performance

·         Investment Update

The Committee and Board noted the quarterly Pension Fund update report, as introduced by Thomas Skeen, Head of Pensions. It was noted that a funding position update would now be included in this quarterly report.  The indicative funding position as at 31/3/17 had improved to 85% from 79% one year earlier.

RESOLVED

The Committee & Board noted the information provided in respect of the activity in the three months to 31st March 2017.

Report of the of Interim Deputy Chief Executive & Chief Financial Officer to provide an update on voting activities on behalf of the Fund.

The Committee and Board considered the quarterly LAPFF engagement report, as introduced by Thomas Skeen, Head of Pensions. It was noted that in the last quarter those occasions where LGIM had not voted in line with the LAPFF voting recommendation were generally on voting alerts for  remuneration policies for different companies.

RESOLVED

That the Committee and Board note the report.

To consider any new items of unrestricted urgent business admitted under

agenda item 3.

There were no new items of unrestricted urgent business.

The following items are likely to be the subject of a motion to exclude the

press and public from the meeting as it contains exempt information, as

defined under Paragraph 3, Part 1, Schedule 12A of the Local Government

Act 1972.

RESOLVED

That the press and public be excluded for the following items on the agenda.

To consider exempt information pertaining to agenda item 8.

The Committee and Board noted the exempt information in relation to this report.

To consider exempt information pertaining to agenda item 9.

The Committee and Board noted the exempt information in relation to this report.

To consider exempt information pertaining to agenda item 10.

 The Committee and Board noted the exempt information in relation to this report.

To consider exempt information pertaining to agenda item 12.

The Committee and Board noted the exempt information in relation to this report.

To consider any new items of exempt urgent business admitted under agenda  item 3 above.

There were no new items of exempt urgent business.

The meeting closed at 9.40pm.