Apologies for absence were received from Nneka Oroge (Active Fund Members' Representative) and Councillor Kyrsten Perry, Chair of the Pensions Committee.

There were no declarations of pecuniary interests made by members of the Board.

Mr John Gray proposed Mr David Stephen- Thompson for the position of the vice-chair of the Pensions Board. The nomination was seconded by Councillor Abdal Ullah and the Chair Mr John Jones.

The Pensions Board RESOLVED to:

1.    Elect Mr David Stephen-Thompson as the vice-chair of the Pensions Board for 2021-22.

Ms Farhana Zia, Democratic Services Officer presented the report, asking members to note the Pensions Board’s terms of reference, membership, quorum and dates of meeting for the municipal year 2021/22.

She informed members these had been agreed at Full Council on the 19^th May 2021.

The Pensions Board RESOLVED to:

1. Note its Terms of Reference, Quorum, Membership and Dates of future meetings as set out in Appendices 1, 2 and 3 to this report; and
2. AGREED to hold scheduled meetings of the Pensions Board at 10:00 a.m.

To confirm as a correct record of the proceedings the unrestricted minutes of the meeting of the Pensions Board held on 22^nd March 2021.

The Board agreed the unrestricted minutes from the 20^th March 2021 meeting to be an accurate record of the meeting.

To consider any written submissions from Fund Members/Stakeholders.

(Submissions must be received by the Clerk to the meeting no later than 5.00p.m. on the day before the meeting.)

There were no submissions made by fund members.

There were no submissions and or responses from the Pensions Committee.

The Chair stated he did attend the Pensions Committee meetings and would be attending the one scheduled for the 5^th July to present the written report which conveyed the view of Board Members.

Mr Mike O’Donnell, Chief Executive of London CIV, Ms Stephanie Aymes, Mr Jason Fletcher, and Ms Jacqueline Jackson, gave a presentation to the Board on the governance arrangements in place for the London CIV.

Mr O’Donnell explained the history of the organisation and how the London CIV’s governance framework and Investment strategy worked to ensure the best outcomes for Pension Funds who had invested with them via the collective investment vehicle. Mr Fletcher explained the investment lifecycle and the fund launch framework as well as the manager monitoring process. Ms Jackson provided an update on the London CIV’s responsible investment strategy and engagement with Funds and companies invested in.

The main points from the presentation to note were:

• London CIV was set up in December 2015 as the first UK LGPS company, with all London Borough Pension Funds, Royal Borough Pension Funds and City of London Corporation (known as the Client Fund) to add value by working collaborative to achieve economies of scale, drive collaboration and maximise impact through responsible investment.
• The purpose of the London CIV is to work in partnership with the ‘Client Fund’ to agree product pipeline and services to deliver the ‘client fund’ requirements. This includes resources and a timeline to a new funding model.
• The governance framework of the London CIV includes a Shareholder Committee, and a Board who oversee the products offered and investments made.
• As part of the governance framework, the London CIV Board interacts with various other Committees, such as the London CIV Investment Oversight Committee and the London CIV Compliance, Audit and Risk Committee and London CIV Executive Committee.
• The Investment Lifecycle for Responsible Investment, Risk and Cost Transparency were explained to include different stages such as Design, Selection RFP, Management and Termination.
• The Manager selection process also included at RAG status for monitoring performance, risk and compliance.
• The objectives of the Responsible Investment and Engagement Policy were explained to the Board, with an overview of how the policy had been designed to include different stages such as research and review, design, implementation and disclosure.
• Six priority areas had been identified as part of the Responsible Investment and engagement policy – climate policy, stewardship policy, product offering, capacity to deliver, culture and communication.
• A table showing the progress made against the priority areas was also provided in a RAG status, traffic light identifier.

In response to questions from members the following was noted:

• The Audit and Scrutiny function sits with the London CIV Compliance, Audit and Risk Committee. The independence comes from the non-executive members on the committee, the FCA and the Depository. However, going forward the London CIV will look at internal audit and how this fulfils the role of compliance.
• In response to what the London CIV viewed the role of the Pensions Board to be, in relation to the scrutiny of its performance, Mr Mike O’Donnell responded stating that this was the first Board meeting the London CIV had been invited to. He said the Board required a  ...  view the full minutes text for item 8.1

Ms Miriam Adams, Interim Head of Pensions and Treasury said the report provided Board members with an update on the performance of the Fund’s AVC providers Utmost and Aviva.

She said under the LGPS regulations, each fund had to provide access to an AVC arrangement where Fund members can elect to pay additional contributions in order to further boost their retirement savings and/or provide additional life assurance. She referred members to paragraph 3.7 of the report and the proposed review of the current providers as well as the table suggesting a list of objectives and outcomes

In response to comments from members the following was noted:

• Mr Gray stated this was an important topic and welcomed the review of AVC providers.
• Mr Jones concurred a review would be a sensible exercise in due diligence.

The Pensions Board RESOLVED to:

Note the recommendations being made to the Pensions Committee who were to consider this report at their meeting of 5^th July 2021:

The Pensions Committee is recommended to:

1. Note the content of the report;
2. Agree the recommendation to commission an independent review of existing AVC providers Aviva and Utmost; and
3. Agree Fund Objectives for Additional Voluntary Contributions (AVC).

Ms Miriam Adams, Interim Head of Pensions and Treasury stated the report provided the Pension’s Board and Committee members with an overview of the stewardship activity carried out by Tower Hamlets Pension Fund’s investment managers and on its behalf by the Local Authority Pension Forum (LAPFF) in quarter ending March 2021.

Ms Adams hoped Board Members had read the LAPFF business meeting papers and said these detailed the engagement that had taken place over the last few months with Fund Investment Managers. She said the issue of the Palestinian-Israeli conflict had been raised by both LAPFF and the London CIV who had lobbied companies about their position. Ms Adams said LAPFF had issued their own statement on this, as well as the London CIV.

In response to questions from members the following was noted:

• The Tower Hamlets Pensions Committee and Board had meet on the 22^nd April to review the Council’s Responsible Investment Policy, which had been updated in line with the comments received. A revised version of the policy will be presented to the Pensions Committee at their next meeting. Ms Adams said the Fund had less immediate and direct contact with investment managers now that investing in pooled funds was the norm. The LAPFF and the CIV were using their might to address the concerns relating to responsible investments and connections to the conflict.
• The Chair, Mr Jones said he had deferred the invitation to LGIM to attend this meeting until the September meeting of the Board when further discussion on the issues raised could be had.

The Pensions Board RESOLVED to:

Note the recommendations being made to the Pensions Committee who were to consider this report at their meeting of 5^th July 2021:

The Pensions Committee is recommended to:

1. Note the content of the report and appendices.

Ms Miriam Adams, Interim Head of Pensions and Treasury said the report provided members with information relating to the administration and performance of the Fund over the last quarter as well as updates on key LGPS issues and initiatives which impact the Fund.

Ms Adams referred to the table at paragraph 3.1 and the number of active and deferred members as well as paragraph 3.5 which referred to Purgo Supply Services Limited who were admitted to the scheme on the 1^st April 2021.

In response to questions from members the following was noted:

• Referring to paragraph 3.4 and the number of employers who still need to put their employee payroll data onto i-connect, Ms Adams said she was working with HR to resolve this. HR are conducting a wider health check of its systems and pensions was part of that review, so the hope is the employers will update their payroll data.
• Referring to paragraph 3.3 and the number of new tasks in relation to starters and the total number outstanding as at 31^st March 2021, Mr Stephen-Thompson asked if there was a reason for the high number. Ms Adams responded stating every new employee is added to the pensions scheme as is every employer. The issue with new starters is when the Council has re-organised services/teams. The HR payroll system accounts for them as new starters even though they are not. Each entry therefore needs to be checked to verify if they are a new starter or not. 

The Pensions Board RESOLVED to:

Note the recommendations being made to the Pensions Committee who were to consider this report at their meeting of 5^th July 2021:

The Pensions Committee is recommended to:

1. Note and comment on the contents of the report and appendix; and
2. Agree the admission of Purgo Supply Services Limited to the Scheme.

Ms Miriam Adams, Interim Head of Pensions and Treasury stated the report provided an update on the Fund’s Risk Register, which was appended to the report. She said a certain level of risk was inevitable in achieving the Fund objectives however it had to be controlled.

In response to questions from Members the following was noted:

• The Chair commented that of the 30 risks listed, 9 were green and 7 were red. He asked why this was so. Ms Adams said they were being prudent with their assessment of risks as some risks could not be eliminated. It was about managing the risks. She referred to risk G3, and said this was a high-level risk and therefore they were being extremely prudent by keeping this red. She said whilst there was a business continuity plan in place, if something was to go wrong it would have a big impact on the Fund. Hence the red rating.

• ACTION: The Pension Board would like to receive an update on staffing at every future Pension Board meeting. 

• Mr Jones stated that he’d like to see the reds moving into the ambers and ambers moving into green.
• Mr Stephen-Thompson concurred with this view and suggested the risks which were red rated, with a 24-month target date, ought to have intermediary milestones, so progress could be tracked. 

The Pensions Board RESOLVED to:

1. Note the comment on the Pension Fund Risk Register; and
2. Note the amendments to existing risks listed in section 3 of the report.

Ms Miriam Adams, Interim Head of Pensions and Treasury presented an update on the training options available, following the results of the National Knowledge Assessments conducted by Hymans Robertson LLP in July 2020. She said the assessment covered the CIPFA Knowledge Skills Framework and Pensions Regulator’s (TPR) code of Practice 14.

Ms Adams referred Board Members to paragraph 3.6 of the report and said the training would be in bitesize format with online modules for members to complete in their own time. She said there was a cost for this, which was set out in the report.

The Board RESOLVED to:

1. AGREE to the Hymans Online Academy as a training option for both the Committee and Board; and
2. Noted the associated costs for licences per Committee and Board Member.

Ms Miriam Adams, Interim Head of Pensions & Treasury said several reports which had been discussed by the Board would also be presented to the Pensions Committee. She said the agenda would be published for the Committee’s meeting of 5^th July in due course.

Board members had no questions in relation to this item.

In view of the contents of the remaining items on the agenda the Committee is

recommended to adopt the following motion: “That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded from the remainder of the meeting for the consideration of the Section Two business on the grounds that it contains information defined as Exempt in Part 1 of Schedule 12A to the Local Government Act,1972.”

EXEMPT SECTION (Pink Papers)

The exempt committee papers in the agenda will contain information, which is

commercially, legally or personally sensitive and should not be divulged to third parties. If you do not wish to retain these papers after the meeting, please post them to the Democratic Service Office, 1st Floor, Mulberry Place London E14 3BG or hold onto the papers until such time you can return to the Town Hall and dispose of the papers in the confidential bins.

The Chair MOVED and it was:

RESOLVED:

“That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded from the remainder of the meeting for the consideration of the Section Two business on the grounds that it contains information defined as Exempt in Part 1 of Schedule 12A to the Local Government Act, 1972.”

To confirm as a correct record of the proceedings the restricted minutes of the meeting of the Pensions Board held on 22nd March 2021.

The Board agreed the restricted minutes from the 20th March 2021 meeting to be an accurate record of the meeting.

Pensions Board Annual Report

The Chair reminded members comments in relation to the Chair’s annual report be submitted no later than Friday,18^th June 2021 to himself and Miriam Adams, Interim Head of Pensions & Treasury.

Governance Arrangement Review

The Board were asked if they would participate in an independent review of the governance arrangements for the Pensions Fund. Ms Adams, Interim Head of Pensions & Treasury said this would involve members of the Board and Committee being interviewed and/or being asked to complete questionnaires on the governance arrangements in place for the fund.

The Pensions Board RESOLVED:

1. This to be a good idea and AGREED to an independent review to be undertaken, subject to the views of the members of the Pensions Committee.