Agenda and minutes

Pensions Committee - Friday 21st March 2014 10:00am

Venue: White Room, County Buildings, Stafford. View directions

Contact: Julie Plant  Email: julie.plant@staffordshire.gov.uk

Items
No. Item

40.

Declarations of Interest

Minutes:

Mr Dudson placed on record his membership of the UNITE and GMB Trades Unions’ Pensions Committee.

 

41.

Minutes of the meeting held on 13 December 2013 pdf icon PDF 44 KB

Minutes:

RESOLVED – That the minutes of the meeting held on 13 December 2013 be confirmed and signed by the Chairman.

 

42.

Minutes of the Pensions Panel held on 4 March 2014 pdf icon PDF 56 KB

Minutes:

RESOLVED – That the minutes of the Pensions Panel held on 4 March 2014 be noted.

 

43.

Annual Review of Statement of Investment Principles pdf icon PDF 51 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Director of Finance and Resources referred to the regulatory requirement on Funds to publish a Statement of Investment Principles (SIP) and a Funding Strategy Statement (FSS) reminding members that the latter had been approved in principle at their December 2013 meeting as part of decisions on the 2013 Triennial Valuation of the Fund and confirming that subsequent minor amendments had been approved in consultation with the Chairman.

 

The Director explained that the SIP gave details of the Strategic Asset Allocation (SAA),  including type of investments, risks and returns and various aspects of management of those investments.  Again, the SAA had been reported to the December 2013 Committee meeting with no significant changes required other than updates to the narrative.  A revised document was submitted for approval.

 

RESOLVED – That the final version of the Funding Strategy Statement (FSS) as posted on the Funds website be noted and approval be given to the revised Statement of Investment Principles as now submitted.

 

44.

Annual Audit Plan 2014/15 pdf icon PDF 52 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Director of Finance and Resources presented  the Pension Fund Audit Plan for 2013/14 as proposed by PricewaterhouseCoopers (PWC), external auditors. He particularly referred to inclusion in the plan of a review of anti fraud measures and the management of cash flows, including payments from employer members of the Fund.  The Committee discussed the processes expected to be adopted by PWC in conducting the audit.

 

Members also discussed the extent to which the Funds investments followed socially responsible principles with details given of the various undertakings required of Investment Managers and the work of the Local Authority Pension Funds Forum (LAPFF) in lobbying on issues of importance to investors.

 

RESOLVED – That the Audit Plan 2013/14 be approved and copies of the LAPFF quarterly report be forwarded to all committee members for information.

 

45.

Pension Business Plan 2014/15 pdf icon PDF 64 KB

Report of the Director of Finance and Resources

 

Additional documents:

Minutes:

The Director of Finance and Resources reported on the performance to date of the Pensions Administration team against the 2013/14 Business Plan referring in particular to the completion of the 2013 Triennial Valuation and preparations for the introduction of the new Local Government Pension Scheme from 1 April 2014.

 

Continuing the Director submitted the Business Plan for 2014/15 the main features of which were the implementation of the new scheme including interpretation and application of recently published Regulations, the integration of pensions payroll staff into the main Pensions Administration Team, updates to IT systems and the review of governance arrangements (see minute 47 below). In listing the contents of the Plan the Director referred to the possible effect of the new scheme on the ability of the Team to meet performance targets.

 

RESOLVED – That the Pensions Business Plan 2014/15 be approved and the key challenges which might affect performance be noted.

 

46.

Pension Fund Risk Register pdf icon PDF 70 KB

Report of the Director of Finance and Resources

 

Minutes:

The Director of Finance and Resources submitted the Pension Funds risk register which detailed the main risks facing the Fund, action taken to manage those risks and the alternatives available. Members discussed the key risk of dependence on the performance of equities with a detailed explanation given of the need to balance risk with reward in order to maximise the Funds ability to meet its liabilities over a long term (20 years) period. The cost implications for employers of any risk averse investment strategy were explained.

 

Responding to queries on the risk to the fund of an increasing number of admitted bodies the Director explained that all admitted bodies were required to provide either a Bond or parent company guarantee.  Specific reference was made to the changed position of Academies following an undertaking by the Department for Education to pay the pension debt of any  Academy which failed completely.

 

Concluding, the Director reported that ‘risk’ was referred to in various documents produced by the Staffordshire Fund and referred to his intention to collate all the information into one report for ease of reference in future.

 

RESOLVED – That the Pension Fund Risk Register and the key risks and planned action detailed therein be noted.

 

47.

New Local Government Pension Scheme Update/Governance Arrangements

Presentation by the Director of Finance and Resources

 

Minutes:

The committee received a presentation by the Director of Finance and Resources on the new Local Government Pension Scheme particularly the proposed new governance arrangements whereby the Scheme Manager (administrator) of a Fund would be scrutinised by an ‘independent’ Board comprising an equal number of representatives of employers and employees. He reported on the robust nature of the Staffordshire Funds existing governance arrangements explaining that if they were transferred to the new system this Committee would be the Scheme Administrator.  He suggested a number of ways in which a Board could be constituted depending on the requirements of regulations yet to be published.  The costs of any governance arrangements were charged to the Pension Fund.

 

Reporting on the new Local Government Pension Scheme the Director summarised its main features, particularly the move to a Career Average Revalued Earnings (CARE)  scheme and the increase in administrative workload it would generate.  He stressed that during the transition period and clarification of the new scheme regulations workload would be prioritised to newly eligible pension recipients.

 

RESOLVED – That the presentation be noted and the Director of Finance and Resources report on the cost to the Pension Fund of compliance with new governance arrangements.

 

48.

Exclusion of the Public

The Chairman to move:

 

‘That the public be excluded from the meeting for the following items of business which involve the likely disclosure of exempt information as defined in the paragraph of Part 1 of schedule 12A of the Local Government Act 1972 indicated below’

Minutes:

RESOLVED – That the public be excluded from the meeting for the following items of business which involve the likely disclosure of exempt information as defined in the paragraph of Part 1 of Schedule 12A of the Local Government Act 1072 as indicated.

 

49.

Exempt minutes of the meeting held on 13 December 2013 (exemption paragraph 3)

50.

Exempt minutes of the Pensions Panel held on 4 March 2014 (exemption paragraph 3)

51.

Action Taken in consultation with the Chairman - Transfer of Payroll Staff to Pensions Administration Team (exemption paragraph 3)

Douglas Green of Hymans Robertson, Actuary, left the meeting for the following item of business.

52.

Appointment Processes for Actuary and Investment Consultants (exemption paragraph 3)

Report of the Director of Finance and Resources

 

Douglas Green was re-admitted to the meeting.

53.

Debt Write-Off (exemption paragraph 3)

Report of the Director of Finance and Resources

 

54.

Admitted Bodies (exemption paragraph 3)

Report of the Director of Finance and Resources