Agenda and minutes

Pensions Committee - Friday 18th July 2014 10:00am

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

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

Items
No. Item

12.

Declarations of Interest

Minutes:

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

Mrs Shelagh McKiernan placed on record her deferred membership of the Unilever Pension Fund.

 

13.

Minutes of the meeting held on 20 June 2014 pdf icon PDF 78 KB

Minutes:

RESOLVED – That the minutes of the meeting held on 20 June 2014 be confirmed and signed by the Chairman.

 

14.

Consultation on Draft Regulations on Scheme Governance - Creation of Pensions Boards pdf icon PDF 87 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Director of Finance and Resources reported on a DCLG consultation paper on the draft regulations for the constitution and role of Pensions Boards explaining that under the Pension Services Act 2013 Pension Scheme Managers (in the case of the Staffordshire Fund, this Committee) were required to establish ‘independent’ Boards to assist the Manager in complying with statutory and regulatory requirements and ensure that the Scheme was governed and administered effectively and efficiently. He commented that the requirement to establish Boards had been introduced across all public sector pension schemes as part of the Governments pensions reform agenda, and whilst acknowledging the reasoning behind the changes he highlighted the anomaly for the Local Government Pension Scheme where governance arrangements were already in existence.

 

The core membership of Pensions Boards would comprise an equal number of representatives of employees and employers to which a lesser total number of ‘other’ members could be added.  DCLG were seeking views on whether Pensions Committees and Pensions Boards should be combined and whether the Board should be established in line with the requirements of the Local Government Act 1972. DCLG had indicated that any combined Boards and Committees would require their approval and would be subject to conditions specified by them.

 

Referring firstly to the role of the Boards the Director explained the intention for them to scrutinise the way in which this committee made decisions to ensure that due process was followed, it would not be for Boards to propose alternative courses of action.

 

The Director reported that nationally UNISON supported the proposed Boards and had been invited to give their reasons to this meeting to assist members in considering their response to the consultation paper.  On behalf of UNISON Steve Elsey, co-opted member, explained that the Trade Union welcomed the opportunity for employee representation and voting rights on bodies making decisions on the management of Funds paid by their members.  UNISON saw the creation of Boards as a move towards ‘balancing the power’ of decision making.  For Boards to be effective, UNISON felt that they should meet as frequently as the Pensions Committee. The Trade Union did not support the formation of combined Committees and Boards.

 

Continuing, the Director reported that Boards had to comprise a minimum of 2 employee and 2 employer representatives, in addition ‘other’ members could be appointed. All would have full voting rights. Reflecting the aim for Boards to be independent, the draft Regulations only permitted local councillors to be appointed under the ‘other’ category.   The Director gave a summary of some suggested options for membership of the Board in terms of numbers to be appointed and selection of employee and employer representatives explaining that more detailed consideration would be needed following publication of the final Regulations. Board members would require a similar level of knowledge and expertise to that of Committee members.

 

Referring to whether Boards should be combined with Committees or ‘stand alone’ the Director commented on the extent to which the work of the Board and  ...  view the full minutes text for item 14.

15.

Business Plan 2013/14 - Outturn pdf icon PDF 79 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Director of Finance and Resources submitted the Pensions Business Plan outturn for 2013/14 reporting that the majority of development activity and service standards contained in that Plan had been achieved with some ongoing as work continued to revise systems and processes to facilitate the new Pensions Scheme.

 

Referring to the final administration costs for the year the Director explained that the considerable increase in actuarial costs was attributable to the Triennial Review.  Responding to a query on whether future costs would return to the 2012/13 levels the Director explained that whilst a reduction was anticipated the Fund was becoming increasingly complex to administer in view of the number of employing bodies involved as a result of services transferring from in house provision.

 

The Director also reported that, as part of the last Triennial Review the Actuary had undertaken additional work to categorise employers in order to minimise the increased contributions required of them. Whilst incurring additional cost to the Fund, that work was forecast to save the employers some £7-£10million over the 2014/17 period.

 

Continuing, the Director explained that whilst the Staffordshire Funds administration costs were below the national average it was also necessary to be aware that there were variations in the standards of service provided by individual Administering Authorities, with Staffordshire being consider to provide a higher standard of service. 

 

The Committee briefly discussed the question of investment manager fees and costs, as considered in detail at the last meeting, with the Director stressing that as the majority of fees were performance related any increase was beneficial to the Fund as it reflected increased return on investment. Of note was that the results of a global benchmarking exercise in which the Staffordshire Fund had participated had been favourable to the Fund.

 

RESOLVED – That the Pension Business Plan 2013/14 Outturn be approved.

 

16.

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 Part1 of schedule 12A of the Local Government Act 1972 indicated below.

 

17.

Exempt minutes of the meeting held on 20 June 2014 (exemption paragraph 3)

18.

Admitted Bodies (exemption paragraph 3)

Report of the Director of Finance and Resources