Agenda item
SUBMISSIONS / REFERRALS FROM PENSION BOARD
Minutes:
The Committee received an update from John Jones, Chair of the Local Pensions Board (“the Board”) meeting held on the 7th of March 2019.
The Committee noted the circulated report which outlined the following:
1. The Board received a presentation from the Local Authority Pension Fund Forum (“LAPFF”) on the latest developments and recent activity. This followed on from a discussion at the previous Board meeting on how LAPFF influence company decision making and measure their effectiveness. During 2018, LAPFF issued 14 voting alerts on a range of issues covering remuneration, climate change and governance. Climate action is a high priority for 2019. LAPFF continue to engage with companies and the benefits of their approach accrue over several years. It was a very helpful presentation and reassured the Board on the work and benefits of the LAPFF;
2. The Board considered and welcomed the approach to Training and Development over the coming year, including holding further joint training sessions for both Board and Committee members. It was noted that this was a key area of interest for the Pensions Regulator in promoting effective governance and decision making;
3. The Board also agreed its work plan for the year ahead. New changes include considering the risk register every 6 months and a monitoring report annually on investment, custodian and transaction costs. These costs have been the subject of attention nationally in recent years and a new framework for analysis and reporting has now been introduced. It was also agreed that the Board should have a separate budget to cover its annual running costs;
4. A notable amendment was the need to look at the cost of investment managers and custodian transactions. There has been a lot of national publicity on these costs and a framework is being developed for LGPS funds;
5. An update had been received on the performance of the Pensions Administration Team. The Pensions Regulator has identified data quality and record keeping as a key area of performance as it can impact directly on member benefits. The current reporting arrangements covering percentage activity need further development to include data activity, information on backlogs of work and the move to paperless reporting. Data quality is something the Pensions Regulators is very keen on. With these inclusions the report would provide more robust and complete information for the Board and Committee. It is important that the administration function is properly resourced to meet service demands and this should also be reported on a regular basis;
6. Regular reports should also be submitted to the Board on any breaches that may occur in record keeping, calculating benefits, internal controls and investment related activity. Many of these may not be material but do assist in giving a complete picture of the overall management of the Fund; and
7. Finally, 2 items were raised at the meeting to be referred onto the Committee for its attention. (i) Whether there are any implications for the Fund arising from the current review of terms and conditions across service providers for Tower Hamlets Council; and (ii) concern over the potential pension liabilities arising from staff employed at the London CIV being included in the LGPS. The Committee noted that it was being asked to consider the implications of these issues.
RESOLVED
To
1. Note the report.
2. Include looking at investment and custodian transaction costs on the work plan for the Committee to review.
3. Ask that the Board reviews the investment and custodian transaction costs first and thereafter by the Committee.
- If the London CIV disappears who will be responsible for their pension’s commitments. They have not got LGPS staff and all are coming from corporate and it would be expensive for LBTH to pick up this additional cost. The London CIV is going through their LGPS pension scheme and is asking Tower Hamlets to give them unlimited guarantee. Given that Tower Hamlets does not do that for any contractors as they are not in control of their staff, giving an unlimited guarantee is not an option.
Supporting documents: