Agenda and minutes

Pensions Committee - Friday 23rd October 2015 10:00am

Venue: Oak Room, County Buildings, Stafford

Contact: Michael Bradbury 

Items
No. Item

1.

Minutes of the meeting held on 19 June 2015 pdf icon PDF 151 KB

Minutes:

RESOLVED – That the minutes of the meeting held on 19 June 2015 be confirmed and signed by the Chairman.

2.

Minutes of the Meetings of the Pensions Panel held on 9 June, 21 July and 8 September 2015 pdf icon PDF 114 KB

Additional documents:

Minutes:

RESOLVED – That the minutes of the meetings of the Pensions Panel held on 9 June, 21 July and 8 September 2015 be noted.

3.

Pension Fund Annual Report and Accounts 2014/15 pdf icon PDF 195 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Committee were informed that under regulations, the Pension Fund had to publish an annual report which included the accounts. The external auditors were also obliged to issue a statement on the accounts.

 

The Director of Finance and Resources submitted the draft Annual Report and Accounts 2014/15 for the Staffordshire Pension Fund, explaining the need for formal approval of its contents by members prior to its publication.

 

The Director summarised the Funds accounts and made particular reference to the inclusion in the document of the independent auditors report on those accounts which stated that they were consistent with those included within Staffordshire County Council’s Statement of Accounts for the year ended 31 March 2015.

 

RESOLVED – (a) That the 2014/2015 Pension Fund Annual Report and Accounts (enclosed as Appendix 1 to the report) be approved and the external auditor’s statement on pages 64 and 65 be noted.

 

(b) That the separate report from the external auditors entitled “Staffordshire Pension Fund - Report to those charged with governance” (attached as Appendix 2 to the report), be noted.

4.

Total Performance Management - Progress Report pdf icon PDF 296 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Committee were informed that, as part of its review of risk management earlier this year, the Staffordshire Pension Fund carried out research to understand existing best practice.  It was found that the Essex Pension Fund reported its performance against a range of objectives and included risk management as part of its performance report.  Identifying more explicitly the Fund’s objectives and linking risks to those objectives appeared therefore to be best practice.

 

The Director of Finance and Resources indicated that officers had begun to develop Staffordshire’s objectives as part of the review of risk management and that further work would be needed to establish how performance could be measured against those objectives, using a set of key performance indicators (KPIs).

 

The Committee were also informed that the National Scheme Advisory Board had recently issued a range of KPIs which they had asked all 89 funds to complete.  The development of these national indicators would appear to support the Staffordshire approach to developing a more holistic Total Performance Management framework tool for the Committee.

 

The Director of Finance and Resources explained that there were four proposed key objectives covering: Governance, Investments, Funding and Administration as follows:

 

              i.        GOVERNANCE - To meet the highest standards of Governance and demonstrate key principles of accountability and transparency through clear responsibilities and reporting.

            ii.        INVESTMENT - To have an appropriate investment strategy which balances risk and reward and is consistent with the Funding Strategy Statement.

           iii.        FUNDING - To ensure sufficient funds are available to meet pension liabilities as they fall due both in the short term and in the long term.

           iv.        ADMINISTRATION – To deliver an efficient and effective financial and pensions administration service.

 

It was proposed that each of the key objectives would have a number of sub objectives –

 

i. Governance Sub Objectives

·         Structure

·         Knowledge and Skills

·         Proper Advice

·         Stewardship

·         Transparency

·         Compliance and Assurance

·         Risk Management

 

ii. Investment Sub Objectives

·         Total Fund Return (v) Actuarial Return Assumptions

·         Strategic Asset Allocation Return (v) Liabilities

·         Tactical Asset Allocation Return (v) Strategic Asset Allocation Return

·         Active Management Returns (v) Strategic Asset Allocation Benchmark Returns

·         Diversification

·         Stewardship (SRI)

·         Cost Management

 

iii. Funding Sub Objectives

·         Solvency short term and long term

·         Contribution strategy

·         Liability characteristics

·         Employers

·         Transfers

 

iv. Administration Sub Objectives

·         Deliver a consistently high level of performance and customer Service

·         Data integrity

·         Communications

·         Cost efficient administration

·         Regulatory Compliance

 

The objectives would continue to be refined over the next few months and a list of KPIs added, in order that the Committee would have a full package at its meeting in December.  The intention was then to develop a full risk register linked to the agreed objectives, for the meeting of the Committee in March 2016.

 

The Committee expressed their support for the proposals and, in response to a question from Mr Elsey, the Director indicated that the work to develop the objectives and the KPIs would be done internally.

 

RESOLVED – (a) That the progress to date on developing a Total  ...  view the full minutes text for item 4.

5.

Pensions Board Policies 2015 pdf icon PDF 216 KB

Report of the Director of Finance and Resources

Additional documents:

Minutes:

The Director of Finance and Resources informed the Committee that the Public Service Pensions Act 2013 (2013 Act) introduced the framework for the governance and administration of public service pension schemes by providing for the creation of Pension Boards and giving regulatory oversight to the Pensions Regulator.  Earlier in the year the national Shadow Scheme Advisory Board (SAB) issued “Guidance on the creation and operation of Local Pension Boards in England and Wales” to assist Administering Authorities to comply with the new legislation.  Additionally the regulator issued a number of codes of practice to provide practical guidance.

 

The Committee noted that the administering authority was required to introduce policies on Training, Conflicts and Breaches for their local pension boards. It was recommended that the policies also be adopted by Pension Committees.

 

The Director indicated that, with regard to training, the Fund had previously maintained a training plan based on the CIPFA Finance Knowledge and Skills Framework for members of the Pension Committee and Panel to ensure excellent governance of the fund. At the moment there was no legal requirement for members of the committee or panel to have knowledge and understanding of pension matters at a level that enabled them to fulfil their role. Members of new Pension Board did however have this legal responsibility.   He added that the training policy detailed:

 

·         Legislative background;

·         Key aims and objectives;

·         Areas of knowledge and understanding;

·         Degree of understanding and knowledge required and self assessment;

·         Delivery of Training

 

With regard to the Conflicts Policy, the Committee noted that Members of the Pension Committee were already governed by the County Council’s code of conduct. The Pension Board Members were also governed by the Council’s code of conduct and they had already received induction training.  The Conflicts Policy was to be regarded as complimentary to the Council’s “Codes of Conduct” rather than act as a replacement. The policy provided a guide to members and detailed the following:

 

·         Recognised Behavioural Principles;

·         Operational Procedures;

·         The requirement to maintain a personal register of interests

·         Defines a conflict with examples

 

The Committee noted that the main features of the Breaches policy were:

 

·         Clarity on who must report a breach;

·         Defines a breach;

·         Judging whether a breach would be considered material to the regulator;

·         The Process of reporting a breach to the regulator.

 

The Committee considered the draft policies and approved their adoption.

 

Mr Elsey raised an issue in relation to the Training Policy and enquired as to whether the Board would reimburse the employer where an employee who was a member of the Pensions Board was required to take time-off work to attend Pensions training organised by a Trade Union.  In response the Director indicated that where the training was organised by the Administering Authority then the Fund would reimburse the employer organisation where the employees work had to be covered.  Where the training was not organised by the Administering Authority there was no agreement in place to reimburse employers but each case would need be considered on its  ...  view the full minutes text for item 5.

6.

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 paragraphs of Part 1 of schedule 12A of the Local Government Act 1972 indicated below

 

The Committee then proceeded to consider reports on the following issues:

 

7.

Exempt minutes of the meeting held on 19 June 2015

(Exemption paragraph 3)

8.

Exempt minutes of the Meetings of the Pensions Panel held on 9 June, 21 July and 8 September 2015

(Exemption paragraph 3)

9.

Collaboration Update

(Exemption paragraph 3)

10.

Admitted Bodies

(Exemption paragraph 3)

 

Report of the Director of Finance and Resources

11.

Local Government Pension Scheme Regulations - Trent and Dove Housing Association

(Exemption paragraph 3)

 

Report of the Director of Finance and Resources

12.

The Local Government Pension Scheme Administration

(Exemption paragraph 3)

 

Report of the Director of Finance and Resources