Apologies for absence were received from Nneka Oroge (Trade Union Representative).

John Gray (Representing Active Admitted/Statutory Bodes Fund Members) declared he was vice-chair of the Local Authority Pension Fund Forum) and a trade union member.

The Chair Mr John Jones proposed Mr David Stephen Thompson continue in his role as vice-chair of the Pensions Board. The nomination was seconded by Annette McKenna.   

The Pensions Board RESOLVED to:

1.      Elect Mr David Stephen Thompson as the vice-chair of the Pensions Board for 2023-24.

To confirm as a correct record of the proceedings the unrestricted minutes of the meeting of the Pensions Board held on 27^th February 2023.

The unrestricted minutes of 27^th February 2023 were AGREED and APPROVED as 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 from fund members.

There were no submissions/responses from the Pensions Committee.

Mr John Jones stated he had attended the last Pensions Committee of 11^th March 2023, were he presented the Board’s report, which had been well received.

Mr Colin Robertson, Independent Investment Advisor, provided the Board with training on the subjects of inflation and interest rates.

The training covered many issues including, for example:

·       Different measures of inflation and types of inflation such as consumer prices and asset price Inflation.

·       The importance of considering interest rates and gilt yields after deducting inflation and how long-term inflation can be forecast.

·       Long term interest rates / bonds and credit spreads.

·       Different types of asset classes and their characteristics including levels of liquidity.

In response to questions from members the following was noted:

·       Mr Robertson said taxation could be used to kerb inflation, as this slows the economy but as the same time could lead to higher prices.

·       The Government’s monetary and fiscal policies can impact short-term, such as a rise in interest rates or long-term where structural changes are made.

·       Supply issues have had a global effect, due to the pandemic. Higher costs lead to demand for higher wages, and this can affect inflation.

·       The Pension Fund as funds invested in diversified assets and is not significantly affected by the rise in interest rates or inflation. Mr Robertson said it was a balanced portfolio.

The Pensions Board RESOLVED to:

Thank Mr Robertson for his presentation, which they had found to be very informative.

Ms Farhana Zia, Democratic Services Officer presented the report, asking members to note the Pensions Committee’s terms of reference, membership, quorum and dates of meeting for the municipal year 2023/24.

She informed members these had been agreed at Full Council on the 17^th May 2023.

The Pensions Committee RESOLVED to:

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

Ms Miriam Adams, Interim Head of Pensions and Treasury introduced the report stating that the report outlined the Governance policy and Governance compliance statement in accordance with the Local Government Pensions Scheme Regulations.

Ms Adams referred members to the report appended at page 34 and drew attention to the aims and objectives of the governance policy and statement. She referred to the two areas of partial compliance and said the Pensions Fund was preparing to hold its first AGM with all stakeholders, in January 2024.

In response to questions and comments from members the following was noted:

·       Mr Thompson supported the suggestion of holding an AGM with stakeholders and asked if the publication of the Annual report would coincide with the AGM. Ms Adams said the 18/19 and 19/20 Annual reports were in draft but could not be consulted on until the Council’s accounts had been signed off.

·       The Chair, Mr Jones also welcomed the prospect of an AGM and asked that Pension Board members are also invited to this meeting.

The Pensions Board RESOLVED to:

Note the recommendations made to the Pensions Committee who will consider this report at its meeting of 3^rd July 2023, that:

1.    The Committee should note and approve the draft Governance Compliance Policy and Compliance Statement (Appendix 1).

Ms Miriam Adams, Interim Head of Pensions and Treasury presented the Administering Authority Discretions report. She said a full review of all the administering authority discretions and policies had been undertaken with the support of the Fund actuaries. She said the report and appendix set out the updated discretionary requirements for approval. Ms Adams referred to the Death Grant Policy on page 81 and the Children’s Pension Policy on page 85 of the agenda pack.

In response to comments and questions from members the following was noted:

·       Mr Thompson praised the report and pointed out a typo on page 83, the first two paragraphs and said this needed to be reworded.

·       Referring to page 85, Mr Thompson said under the qualifying criteria, clarity was required as to what “natural children” referred to.

o   Action: Ms Adams AGREED to look at the aforementioned and said she’d speak to the Local Government Association.

The Pensions Board RESOLVED to:

Note the recommendations made to the Pensions Committee who will consider this report at its meeting of 3rd July 2023, that:

The Pensions Committee is recommended to:

1.    Consider and approve the recommended administering authority discretions policy.

2.    Note that policies have been implemented following legal developments and recommendations from the Local Government Association:

3.    Consider and approve the Death Grant Policy.

4.    Consider and approve the Child Pension Policy and.

5.    That the Committee approve publication on the Pension Fund website.

Ms Miriam Adams, Interim Head of Pensions and Treasury presented the ESG, Voting, Engagement and Stewardship update report. She said the report provided an overview of the activities carried out by the Tower Hamlets Pension Fund’s investment managers and on its behalf by the Local Authority Penson Forum (LAPFF) in the quarter ending March 2023.

Ms Adams commented the quarter had been a quite one. She said the report was limited to the companies that the Pension Fund was invested in.

In response to comments and questions from members the following was noted:

·       Mr Gray stated LAPFF had declared an international garment workers day to improve the working conditions of workers and the supply chain.

·       Mr Thompson stated he was pleased to see there had been dialogue with Amazon. He said whilst the LAPFF initiative was good, working conditions in the UK also required improvement.

·       Ms Adams stated the LBTH Pensions Fund had been the main driver for improving relations with LCIV and voting patterns.

The Pensions Board RESOLVED to:

Note the recommendations made to the Pensions Committee who will consider this report at its meeting of 3rd July 2023, that:

The Pensions Committee is recommended to:

1.    Note content of this report and appendices.

Ms Miriam Adams, Interim Head of Pensions and Treasury introduced the Pension Board work plan for 2023/24. She said the work plan was subject to change during the year and invited comments from members.

In response to comments and questions from members the following as noted:

·       Ms Adams confirmed Budgetary control information would be presented as part of the annual report, coming to the next meeting.

·       In reference to page 133, Mr Thompson enquired if the ‘Investment strategy statement and review changes’ would be in draft format to allow comments. Ms Adams confirmed that it will be.

The Pensions Board RESOLVED to:

1.    Note the Pension Board workplan for 2323/24.

Ms Miriam Adams, Interim Head of Pensions and Treasury introduced the report stating that the report provided information on the administration and performance of the Fund over the last quarter as well as an update on the key LGPS issues and initiatives which impact the Fund.

Ms Adams said the table at 3.1, page 136 showed the membership to the fund had risen slightly. The number of tasks completed and outstanding was shown in table 3.2.

In response to comments and questions from members the following was noted:

·       Mr Jones stated performance had risen compared to performance 18 months ago. He said the number of pension staff had increased and said this was a good new story that ought to be celebrated.

·       Ms Adams confirmed this and said they were looking to recruit more staff. She said she was looking to strengthen performance with a target of 70% completed tasks. She said the next quarter report would show a dip in performance, but this had been to sickness in the team.

·       Referring to the checks and balances in place for Overseas Pensioners, paragraph 3.6, Ms Adams confirmed it was an officer decision to stop a pension after a final reminder had been sent. She said a pensioner/fund member was given three months to respond to existence checks with each case being reviewed on a case-by-case basis.

·       Referring to staff who are ‘insourcing’ paragraph 3.9, Ms Adams said her team will be working with staff to ensure they know of the benefits of the pension scheme however the onus was on the employers to promote the scheme.

·       Referring to the table at paragraph 3.2, Mr Thompson suggested the ‘other’ category be looked at and be re-defined to help understand the types of queries received.

The Pensions Board RESOLVED to:

Note the recommendations made to the Pensions Committee who will consider this report at its meeting of 3rd July 2023, that:

The Pensions Committee is recommended to:

1.    Note and comment on the contents of this report and appendix.

2.    Agree the admission of Riverside Housing Association previously known as One Housing.

3.    Note the conversion of Cannon Barnet LEA maintained school to

academy status and.

4.    Agree to extend the annual overseas existence checks to include a once every 3 years additional checks via Convera (previously known as Western Union).

Ms Miriam Adams, Interim Head of Pensions and Treasury provided a verbal update in relation to the Pension Fund accounts. She informed members the auditors had raised concerns about figures used by the Actuary in their forecasts. She said they were not satisfied with the membership numbers from the triennial valuations of 2016 and 2019. Ms Adams said there was a possibility that the accounts would be qualified for years 2018/19 and 2019/20. She said they were comparing data from 2016 and 2019 triennial spreadsheets.

In response to comments and questions the following was noted:

·       Mr Jones stated it was puzzling the auditors were questioning data from 2016 and 2019 triennial valuations and not the financial statements. He asked if this had happened in any other council and if this matter could be escalated to the LGPS and CIPFA?  Ms Adams responded stating she was unaware of this being raised as an issue in any other council and that she would relay the Board’s comments back to the Corporate Director for Resources, Ms Holland.

Mr Jones thanked Ms Adams for the update.

Ms Miriam Adams, Interim Head of Pensions and Treasury stated the report updated members of the Board and Committee, on changes to the Fund’s risk register and Risk Management Policy as at March 2023. Ms Adams provided an explanation for the risks listed at paragraph 3.3 to 3.13 and the remedial action taken. She explained the progress that had been made to the risks and referred to the table at paragraph 3.14 which summarised the total risks.

In response to comments and questions the following was noted:

·       Referring to the table at 3.10 and the risk register appended, Mr Thompson said there were 11 reds of which 9 had been converted to amber. He said most of them were showing ‘ongoing’ but did not state a deadline. He asked this to be reviewed with an indication of when they were likely to be completed.

The Pensions Board RESOLVED to:

Note the recommendations made to the Pensions Committee who will consider this report at its meeting of 3rd July 2023, that:

The Committee is recommended to:

1.    Note and comment on the detailed Risk Register (Appendix 1)

Ms Miriam Adams, Interim Head of Pensions and Treasury stated the report presented the findings of the review examining the adequacy of internal control measures in place by fund managers who hold the Fund’s assets in management. She said an independent accounting and auditing firm had been used for this purpose. Ms Adams said the review of these report and bridging letters had identified no significant changes to the internal control environment for the period of 1^st April 2022 to 31^st March 2023.

In response to comments and questions the following was noted:

·       In answer to if the team had enough resources to undertake reconciliations regularly, Ms Adams said this was a struggle at times. She said one administrative officer for reconciliations. She confirmed more information would be provided in the annual report coming back to the Board and Committee.

The Pensions Board RESOLVED to:

Note the recommendations made to the Pensions Committee who will consider this report at its meeting of 3rd July 2023, that:

The Pensions Committee is recommended to:

1.    Note the report contents; and

2.    Note that the current position for London CIV.

Ms Miriam Adams, Interim Head of Pensions and Treasury said several reports that were on the Pensions Board agenda would be presented to the Committee at its meeting of 3^rd July 2023. She said Mr Jones, would be attending the meeting to provide his regular update.

No other business was discussed by Board members.

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/Confidential (pink) papers for consideration at the meeting 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 hand them to the Democratic Services Officer present or dispose of them 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.”

The restricted minutes from the 27^th February 2023 meeting were AGREED and APPROVED by the Board.