Decisions

The Committee considered the report, introduced by Thomas Skeen, which provided an update on voting activities on behalf of the Fund. The Committee noted that the Fund was 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.

It was noted that the voting shareholders are encouraged to act ethically and responsibly and to vote accordingly. Whilst it is not possible to force fund managers to vote a particular way, the Fund was able to strongly advise them of the position it feels they should take. It was acknowledged that this advice is generally adhered to and voting is, more often than not, done in line with the Fund’s position.

In discussion, the question was raised about what happened when a fund manager did not vote in line with the Fund’s preferred position. In response, it was noted that, whilst the Fund is unable to force fund managers to vote a particular way, it is mandatory for fund managers to provide detailed reasoning when their vote is that against the preferred choice of the Fund. It was suggested that it might be helpful if future Pensions Committee and Board meetings were provided with an update on the rationale behind why some companies vote in a different way to how the Fund would like them to vote.

The Committee and Board questioned how effective it was to ask companies to vote a certain way, with particular reference drawn to Anadarko, which votes in compliance with the Fund’s position only 52% of the time. The Committee was assured that engagement with companies is helpful and can have a positive investment impact. It was also highlighted to the Committee that engagement with companies is important in getting them to change their behaviour.

Resolved

The Committee note this report.

The Committee and Board considered a report, introduced by Thomas Skeen, on the governance update on the London Collective Investment Vehicle (CIV) governance structure and on the terms of appointments to the Pensions Committee and Board.

The Committee noted the changes in the governance structure of CIV, notably:

·         General meetings, which all of the boroughs attend, will be held twice annually. These meetings will be in July (to approve the accounts), and in January (to approve the Medium Term Financial Strategy). These meetings will continue to be attended by either the Chair or Vice Chair of Haringey Pensions Committee and Board.

·         Shareholder Committees will meet on a quarterly basis on a consultative capacity only, with 12 Shareholders represented: four S151 Officers, and eight Pension Chairs. The Pension Chairs would be selected via the collective political processes of the London Councils, providing political, geographical and gender diversity.

It was noted that, under the old system of governance, problems arose due to the sheer number of shareholders (32) trying to make decisions. The new structure of four S151 Officers and eight Pension Chairs was expected to create more effective dialogue by streamlining the number of participants in the decision making. Haringey Council did initially challenge the selection process of the eight Pension Chairs and questioned whether this would secure the best individuals for the committee.

In discussing the selection of the eight Pensions Chairs to attend the quarterly meetings of the shareholder committees, it was noted that, contrary to the objective of selecting chairs that reflect the political balance of London, the proposed chairs do not in fact do this. It was further noted that it was important for the Chair of the Pensions Committee and Board to build effective working relationships with the other Pension Committee Chairs.

Terms of appointment for the Pension Committee and Board

The Chair gave an update on the terms of appointment to the Pensions Committee and Board. Regarding his discussion with both Chief Whips, it was acknowledged of the need for continuity to ensure that members have the necessary knowledge and training to sit on the committee. Both Chief Whips have stated that they are committed to appointing the same members onto the Pensions Committee and Board each year within the election cycle, while recognising that Groups may wish to hold elections for their nominees for the Chair and Vice Chair positions. It was suggested that this would be a better alternative to the cumbersome approach of changing the Constitution of the Council to mandate 4 year terms for members of the Pensions Committee and Board. The Chair stated that this would be reviewed in 2 years’ time to ensure that this approach is still a workable and effective one. However, it was noted in discussion that this approach only works for members of the Pensions Committee and Board who wish to remain on the committee.

Resolved

That the Committee and board:

• note the London CIV governance structure updates.
• note the verbal update given by the Chair of the Committee and Board after his conversation with both Chief Whips.

The Committee considered this report, presented by Janet Richards, which detailed potential new admissions to the pension fund. The Committee noted in the report:

·         the steady increase of users visiting Haringey Website.

·         the most recent internal audit of the pensions administration service, which showed a substantial assurance rating of the service, this is for members to note.

·         the update to the Pensions Administration Discretionary statement to make it clear that Haringey Council will exercise the discretion to abate the pensions of former employees who are retired early, if they are re-employed by any of the scheme employers in the Haringey LGPS Pension fund.

The Committee was informed that this was a regular item on the agenda and that there were certain areas that needed improving, such as employer’s provision of information to the fund.

It was drawn to the Committee’s attention that, since the publication of the report, there was a new school in Haringey that had started to make some contribution to the Fund.

It was queried why, on page 235 of the Report Pack, Standing data was ‘Amber’ and not ‘Green’ (signalling weaker effectiveness of controls). It was noted that attaining information from outside providers can be challenging, and there are various factors that impact the delay or lack of information, such as turnover of staff.

In response to a question regarding the potential admissibility of new employees of ISS Mediclean Ltd as fund members, it was noted that this admission to the fund would be on a closed basis, meaning that new members of staff not employed on the date of the admission would not be eligible to join the fund.

Resolved

That the Committee:

• approve the admission of ISS Mediclean Limited as a new employer to the Pension Fund, subject to an Admission Agreement being entered into and 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.
• approve the admission of Haringey Education Partnership as a new employer to the Pension Fund, subject to an Admission Agreement being entered into, as detailed below, and note they will be included within the Council’s pool of employers.
• approve the updated Discretionary Policy Statement.
• note that this report gives a breakdown of the amount of visits made to the Haringey pension fund website.
• note the most recent audit of the pensions administration service.

Reason for decision

New Admission Body to the Fund

ISS Mediclean Ltd

West Green School has tendered its cleaning service and the successful bidder was ISS Mediclean Limited. It is proposed that ISS Mediclean be admitted to the Haringey Pension Scheme as an Admission Body in relation to the provision of the cleaning Service for West Green School, subject to ISS Mediclean Ltd entering into an admission agreement with the Council so that those eligible employees can remain within the Haringey Pension Fund.

That an admission agreement satisfactory to the Council be entered into – in respect of the service contract and that the agreement is a closed agreement, as such that new members cannot be admitted.

The Employer contribution rate is 29% and the bond is £50,000. The staff are required to work no less than 50% of the time on their contract.

Haringey Education Partnership

Haringey Council has made a decision to commission statutory and strategic school improvement functions, and has entered into a contract with Haringey Education Partnership (HEP), under which HEP will carry out those functions for the Council.

It is proposed that HEP be admitted to the Haringey Pension Scheme as an Admission Body from 1 September 2018, subject to HEP entering into an admission agreement with the Council that is satisfactory to the Council, so that those employees designated by HEP as eligible will be entitled to be members of the Haringey Pension Fund.

Under Regulation 3(1)(iii) of the LGPS Regulation 2013, HEP has designated a class of employee eligible to join the pension scheme.

The designated eligible employees that the admission agreement will be open to are the Governor Support Officers and the Senior Governor Support Officers. The admission agreement will be closed to all other employees of HEP.

HEP will be included within the Haringey Council pool of employers, and they will pay the same employer contribution rate as Haringey Council, which is currently 24.9%.