Agenda and minutes

Members are asked to declare any interest and the nature of that interest which they may have in any of the items under consideration at this meeting.

Peter Borley-Cox declared disclosable pecuniary interests as members of LGPS. Councillor Lloyd Bunday disclosed a personal interest as he and his wife are deferred members of LGPS. Councillors Phil Bignell and Graham Lawman disclosed personal interests as their wives are deferred members of LGPS.

To confirm the Minutes of the meeting of the Committee held on 11 October 2021.

The public minutes of the previous meeting held on 11 October 2021 were agreed as a true and accurate record of the meeting.

To receive communications from the Chair.

The Chair introduced the last Pensions Committee of the year, and thanked officers and members for their hard work and wished everyone a Merry Christmas.

The Chair asked members to note the action log.

RESOLVED: That the Pension Committee noted the action log.

At the Chair’s invitation, the Governance and Regulations Manager presented the report and highlighted the key points contained in section 5 of the report. She explained the key performance indicators (KPI) for the period 1 June 2021 to 30 September 2021 were contained in appendix A of the report. The KPI report showed the payment of pension benefits from deferred members had a red rag rating which the Governance and Regulations Manager explained was an ongoing issue as the volume of work in this area had increased significantly, and  with recent system outages and pressures from Covid-19 related absence and other staff absence, performance was behind target.

The Governance and Regulations Manager moved onto Appendix B which summarised the timeliness of payment of scheme employer and member pension contributions. She summarised that she had no concerns as the timeliness of payments was positive from March to August 2021.

In terms of breaches of the law, the two breaches which were reported at the last Pensions Committee had now been resolved. In addition, the internal dispute resolution procedure case displayed in section 5.4 had been resolved.

The Governance and Regulations Manager concluded the report and invited members to ask any questions.

RESOLVED: That the Pensions Committee noted the contents of the report.

At the Chair’s invitation, the Head of Pensions presented the report and summarised the salient points from the Business Plan update:

·       The procurement process for the retender of the investment advisory services contract that had been awarded to Mercer LLC had been signed and sealed, so the process had now concluded.

·       The review of the Business Continuity Plan had completed and was scrutinised by the Local Pension Board.

·       The Pensions team had recruited a full time colleague to undertake work on rectifying pension records, and the Guaranteed Minimum Pension rectification was now moving forward.

·       The McCloud age discrimination remedy was ongoing and requests for data was out with scheme employers and a software provider was on hand to input missing data, to ensure that data could be infilled within records.    

·       The Fund was currently awaiting an official response from the Local Government Association (LGA) on how to handle any complaints or issues identified as a result of the McCloud age discrimination remedy.      

·       The scope and conduct potential liability reduction exercise had been postponed as resources were being utilised elsewhere and there was a backlog of work due for statutory projects which had to take precedent.

·       In terms of the Fund’s property strategy, the review was due to be completed and a report with an action plan taken to the next Investment Sub-Committee meeting in February 2022.

·       The budgets were healthy and the WNC staff pay awards would have an adverse impact on LGPS and the report variants would show in the report for the next quarter.

The Head of Pensions concluded his report and invited members to ask any questions.

Members expressed concern regarding the employer response and the Head of Pensions assured members that it was a double checking exercise and the Fund already request data as a formal requirement. Once the McCloud remedy had been completed, any challenges received by the Fund as a result of incorrect data, would be directed to the employers. The Chair requested that an update be brought to the next Pensions Committee on the progress of employer responses.                                                                                                                                                                                                                                                                       

RESOLVED: The Pension Committee noted the Business Plan Update to 31 October 2021

At the Chair’s invitation, the Governance Officer presented the Risk Monitoring report and explained the report was a standard agenda item that was presented biannually to members. The Local Pension Board had reviewed the report and the report consolidated the risks and amendments to the risk register and details were summarised in Appendix A. There was a significant focus on cyber resilience and pension scams as an ongoing threat, and mitigations were put in place to strengthen systems and areas of the Fund to keep up to date with evolving developments to ensure robust cyber resilience. The short term and medium term risks were outlined in the report and the Governance Officer highlighted section 5.2.3 of the report and reminded members of the importance of the CIPFA training provided by Aon for members to complete to prevent loss of knowledge from the Pensions Committee.

Members discussed the report and questioned risk 14 on the register, which referred to the incorrect/poor quality of data held and the Governance Officer explained that the employer services team managed this area and incorrect data also referred to when information was submitted in the wrong format.

RESOLVED:The Pension Committee review the Risk Register and advised on no further changes.

At the Chair’s invitation, the Governance and Regulation Manager presented the report and reiterated the need for members to complete training with the schedule of training events outlined in appendix A of the report.

RESOLVED: The Pension Committee noted the contents of the report.

At the Chair’s invitation, the Governance Officer presented the report and emphasised the focus on training with the proposed Training Strategy contained in Appendix A of the report with a copy showing the tracked changes highlighted in Appendix B.

The Governance Officer explained that the Training Strategy had been updated to comply with government guidance as a result of the good governance review. The strategy had been reviewed as presented to the Pensions Committee and officers had made revisions where necessary.  

The Training strategy included some practical changes such as the credit methodology, and the training requirements for senior officers and the virtual training modules for committee members. The training modules provided by Aon were easier for members to follow and gave members the knowledge required, and competency could be demonstrated in the live sessions as members could ask questions in live time and receive answers from specialists. The Governance Officer explained that the modules provided a rounded knowledge base for councillors. Historically, external conferences were useful but tended to have some irrelevant content, whereas the Aon modules were knowledge focused and accessible for members.

The Governance Officer concluded the report and monitoring of training records for members would be ongoing and members would receive training for key events, such as valuation as an example, to assist members with dealing with upcoming matters in advance.

Members expressed their delight with the Aon training modules, and emphasised the accessibility of the training, particularly for new members.

The Chair questioned how member training would be monitored to ensure members were kept on track and the Governance officer explained that the Governance Officer would regularly liaise with Aon and receive updates on training progress, as well as informing the Chair of any members with outstanding training.

RESOLVED: The Pension Committee approved the revised Training Strategy.

At the Chair’s invitation, the Head of Pensions presented the report on behalf of the Employer Services Manager and explained that he was happy to take any questions and had nothing to add to the contents of the report.

RESOLVED: That the Pension Committee:

a) Noted the admission of the following admitted bodies to the Northamptonshire Pension Fund and approved the sealing of the following admission agreements;

• Birkin Cleaning Services Ltd

• CleanTEec Services Ltd

• Easy Clean Contractors Ltd

b) Noted the exit of the following body from the Northamptonshire Pension Fund:

• Aspens Services Ltd

The following report(s) contain exempt information as defined in the following paragraph(s) of Part 1, Schedule 12A of Local Government Act 1972.

*DELETE AS APPROPRIATE*

Paragraph 1 – Information relating to any individual.

Paragraph 2 – Information which is likely to reveal the identity of an individual.

Paragraph 3 – Information relating to the financial or business affairs of any particular person (including the authority holding that information).

Paragraph 4 – Information relating to any consultations or negotiations, or contemplated consultations or negotiations, in connection with any labour relations matter arising between the authority or a Minister of the Crown and employees of, or office holders under, the authority.

Paragraph 5 – Information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

Paragraph 6 – Information which reveals that the authority proposes;

a)    To give under any enactment a notice under or by virtue of which requirements are imposed on a person; or

b)    To make an order or direction under any enactment

Paragraph 7 – Information relating to any action taken or to be taken in connection with the prevention, investigation or prosecution of crime.

Members are reminded that whilst the following item(s) have been marked as exempt, it is for the meeting to decide whether or not to consider each of them in private or in public. In making the decision, members should balance the interests of individuals or the Council itself in having access to the information. In considering their discretion members should also be mindful of the advice of Council Officers.

Should Members decide not to make a decision in public, they are recommended to resolve as follows:

“That under Section 100A of the Local Government Act 1972, the public and press be excluded from the meeting for the following item(s) of business on the grounds that, if the public and press were present, it would be likely that exempt information falling under the provisions of Schedule 12A, Part I, Paragraph(s) XXXXX would be disclosed to them, and that in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.”

The Chair moved that the remainder of the meeting be held in private:

That under Section 100A of the Local Government Act 1972, the public and press be excluded from the meeting for the following item(s) of business on the grounds that, if the public and press were present, it would be likely that exempt information falling under the provisions of Schedule 12A, Part I, Paragraph(s) 3 would be disclosed to them, and that in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED: Members agreed that the public and press were excluded from the remainder of the meeting and the Pensions Committee moved into private session.

The private minutes of the previous meeting held on 11 October 2021 were agreed as a true and accurate record of the meeting.

At the Chair’s invitation, the Governance and Regulations Manager presented the report and updated the Pensions Committee on the progress of the Cyber Resilience Strategy. Since the strategy was approved at the last Pensions Committee on 11 October 2021, officers have reviewed the action plan and undertaken work to increase understanding of the actions required in order to comply with the Pensions Regulator.

In terms of the mapping of data and asset flows exercise, the Fund’s governance advisors Aon, had provided a template to assist with the exercise recording data and assets and identifying the security of information being transferred as well as risks from transactions. The maps had been presented to the Local Pension Board, and the Governance and Regulations Manager was happy to circulate the information outside of the meeting as it was difficult to present the maps effectively during the meeting.

The mapping exercise enabled the Fund to identify the four suppliers which presented the greatest security risk, and as a result a cyber security questionnaire had been sent to the four suppliers. The four suppliers identified were West Northamptonshire Council as the provider of pensions administration; Hymans Robertson as the actuarial services provider; Aquila Heywood as a provider of pensions and payroll hosting services; and Accurate Data as they delivered mortality screening and member address tracing services. The Governance and Regulations Manager was happy to report that the Fund had received response from all four suppliers. These responses were currently being reviewed by Aon and the Pensions Committee would receive an update at the next meeting in March 2022.

The Governance and Regulations manager continued that the Fund were currently looking into undertaking a phishing email exercise to test cyber hygiene. However, it was expected that the firewall system would prevent emails going into inboxes, and this aspect of the exercise needed to be relooked. She shared that cyber hygiene was an ongoing process and it was hard to compile guidelines that were fit for purpose as all users had different access to IT facilities, with some using personal or organisation emails. The Governance and Regulations manager concluded that cyber resilience was a developing issue and would be presented on the Business Plan in the new year.

Members felt the phishing exercise would be a great way of testing users in a safe environment and would work as a prevention measure. Members also shared that West Northamptonshire Council was currently recruiting for a Head of Cyber Security.

Members questioned how data in transit was managed and the security behind data transfers and the Governance and Regulations Manager confirmed that this question was asked to suppliers in the survey. Some suppliers had secure portals in place, and the survey would enable the Fund to have conversations with suppliers for security assurance.

Members also asked once the four main supplier risks had been analysed, if the fund would move onto those who posed a lesser security risk and the Governance and Regulations Manager confirmed this would be looked  ...  view the full minutes text for item 53.

At the Chair’s invitation, the Head of Pensions introduced the report and explained the update had been presented to the Investment Sub-Committee and detailed the proposed guidance on responsible investment and updated the Pensions Committee following the ACCESS Joint Committee meeting on 6 September 2021 which was held in Westminster.

The Head of Pensions summarised that there were concerns around the performance of the operator, Link, but following a Business as Usual evaluation the ACCESS pool was happy to continue to see the contract through. He explained there was a need for rigorous procurement as there were communication and technical issues with the current operator and this caused a delay in investing in Bluebay sub-funds.

The Head of Pensions continued that the ACCESS pool had undertaken a Responsible Investment project and the guidelines contained in the report detailed the pool’s view and standpoint as detailed on page 148 of the report. The ACCESS Pool had appointed an external consultancy, Minerva to help facilitate the development of responsible investment guidelines, which would benefit the Fund as work would be consistent as the Fund’s Independent Advisor also worked for Minerva.

The Head of Pensions concluded his report and asked the Pensions Committee to approve the guidelines in principle and provide any feedback to officers on the responsible investment guidelines.

RESOLVED: That the Pensions Committee:

·       Noted the report and;

·       Approved in principle the draft ACCESS Pool Responsible Investment Guidelines.

At the Chair’s invitation, the Head of Pensions presented the report and explained that following a significant amount of work over the past 18 months, as well as a public consultation to stakeholders, the responses to the consultation had been reviewed and the revised Investment Strategy Statement had been presented to Pensions Committee for final approval.

The Head of Pensions explained that the Responsible Investment Policy had been updated to enable the Fund to go forward with managing climate and carbon risk, and it would allow officers to decompartmentalise the portfolio and look at systemic risks that impacted the Fund’s investment such as climate change.

Members discussed the report and were pleased that the Fund was reacting to climate change as this would have an impact on investments for the future.

The Chair expressed the need for the Fund to be sympathetic to climate change, as it presented conflicting pressures and implications for investment. He explained that an action plan would be taken to the next Investment Sub-Committee to be reviewed by the committee in February. The Head of Pensions concurred with the Chair and stressed that it was important for the Fund to set out its rationale.

RESOLVED: That the Pensions Committee

·       Approved the Investment Strategy Statement for publication on the Fund’s web pages;

·       Approved the summary of feedback from the consultation that will be published on the Fund’s web pages.