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.

Rob Austin declared a disclosable pecuniary interest as a member of LGPS. John Wignall declared a personal interest as a retired member of LGPS. Councillor Graham Lawman disclosed a personal interest as his wife is a deferred member of LGPS.

To confirm the Minutes of the meeting of the Committee held on 30 March 2022.

The minutes of the previous meeting held on 30 March 2022 were agreed as a true and accurate record of the meeting subject to the admission of Councillor Graham Lawman on the list of those present.

To receive communications from the Chair.

The Chair welcomed everyone to the meeting and announced he had two important items to note. He explained at the previous meeting of the Investment Sub-Committee, poor attendance led to the meeting not being quorate meaning that no decisions could be taken at the meeting. The Chair reminded members that if they are unable to make a meeting of the Pensions Committee or Investment Sub-Committee, they are to send a substitute in their place or send apologies in advance so that the Democratic Services Officer could manage attendance and rearrange the meeting if necessary. The Chair made comment about the length of meetings and asked officers to ensure that the meetings were no longer than 2 hours to ensure members were focussed and engaged.

The Pensions Fund Committee to review the action log.

The Governance Officer presented the action log as detailed in the report.

RESOLVED: That the Pensions Fund Committee noted the action log.

At the Chair’s invitation, the Governance Officer presented the Administration Report and summarised that in terms of the Key Performance Indicators (KPIs) these were all positive with consistently good performance over the period except for 2 targets. This was detailed in section 5.1.3 of the report. In January, February and March 2022, the Governance Officer reported that 100% of payments were received on time from employers. The Governance Officer highlighted the breach in section 5.3.2 of the report, which detailed that prudential had failed to provide annual benefit statements by statutory deadline. As a result of this the deadline was extended to 30 April and this was met. The Pensions Regulator confirmed that no further action would be taken at this time.

The Governance Officer shared that a new section, material data breaches, had been added as a standing item in the report. The Governance Officer explained this was important for transparency. As detailed in section 5.4, there was a data breach involving 157 scheme members due to a printing error with double-sided printed letters with another scheme members details printed on the reverse. This was quickly identified, and West Northants Council’s breach guidelines were followed and GDPR training provided to staff. In terms of Internal Dispute Resolution Procedure cases, there was one dispute in the period 1 February to 30 April 2022 that was responded to and the monitoring officer had decided not to uphold.

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

RESOLVED: That the Pensions Fund Committee noted the report.

The Pensions Fund to note the Governance and Compliance Report.

At the Chair’s invitation, the Governance Officer presented the report and explained that there had been further work undertaken since publishing the report on pensions dashboards in section 5.1 of the report, as there had been further development from the dashboard programme. The progress report and log released covered key topics such as how to prepare for further dashboards, timeliness, and data quality. The DWP will publish its response to the consultation and produce draft standards over the summer. Since the governance and compliance progress report had been published, the Pension Regulator has published guidance stating that all schemes should be taking action and preparing in advance for future activity. The Governance Officer shared that Northamptonshire Pension Fund were undertaking background reading, attending webinars and conducting research into system requirements in preparation. The fund already used iConnect for most employers which helped record monthly data collection and ensure data quality was up to date.

The Governance Officer explained that since the last meeting, the Fund managed to secure a North Northamptonshire Council representative for the Local Pension Board. There was still a vacancy on the Pension Fund Committee and recruitment would be rescheduled to the summer.

The Governance Officer highlighted the new section in the report at 5.3 Fund Policy/Strategy Updates. This would enable officers to provide updates on immaterial changes to policies and strategies, rather than requiring the entire policy to be reviewed for small changes. Since the last meeting The Anti-Fraud and Corruption policy had been updated to add a link to the whistleblowing policy in the report. The Data Improvement Strategy was a separate agenda item in the meeting.

The Governance Officer referred to the training program detailed in Appendix A of the report and encouraged members to make contact if they were interested in any further training opportunities.

RESOLVED: That the Pensions Fund Committee noted the report.

The Employers Admissions and Cessations Manager presented the report and invited members to ask any questions.

RESOLVED: That the Pensions Fund Committee:

a) Noted the admission of the following admitted body to the Northamptonshire Pension Fund and approved the sealing of the following admission agreement:

• RM Education Limited

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

• Maid Marion Limited

• Consortium Audit

At the Chair’s invitation, the Head of Pensions presented the report and summarised that as detailed in section 4 of the report, the administering authority has discretion over the determination of the value of any exit credit that should be paid to any exiting employers. The Head of Pensions explained that the current process was that key decisions were determined by the Head of Pensions and Executive Director Finance (Section 151). The report proposed that the Employer Services Manager be named as the officer responsible for making determinations in relation to matters around exiting employers and exit credits in the first instance. The Head of Pensions explained this would enable him to be able to judicate in the case of any appeals and create a framework to be put in place.

The Chair asked if this proposal would speed up the process. The Head of Pensions explained that the framework would speed up the decision making and put logical steps in place. The Fund had been working on this for a few months and it was determined as the best way forward.

Members discussed the report and shared that they agreed with the framework but felt that the Fund’s starting position should be to pay the credit back to the employer. Members felt there should be a threshold on the amount paid back and any significant amounts should be brought to the committee to decide as credits could be quite considerable. The Chair agreed that it would be good to report from a governance perspective. The Head of Pensions responded that the law was quite clear on this as the actuary identifies the surplus and the administering authority’s role was to determine how much was to be paid. The law is clear on the multifactorial decision making which considers risks, contracts and who would pay deficit and that the monitoring officer would be responsible for handling any appeals.

The Employer Services Manager explained that the fund had tested out the framework and sought legal advice which found that the framework was robust.

Members questioned if there would be a conflict of interest with the individual dealing with appeals and determining the exit credits. The Head of Pensions shared that he was comfortable with the post holder, as any individual who would take on the role would have a role within the Pensions Fund.

RESOLVED: That the Pensions Fund Committee approved the updated proposed Administering Authority Discretions Policy provided in Appendix A of the report.

The Head of Pensions presented the report and explained that the Data Improvement Policy and Plan had been previously brought to committee. The policy had been completely rewritten to align with the Funds priorities going forward. In effect, the new plan demonstrates the in-year activities surrounding various projects and data scoring. The strategy itself gives indication on a monthly-basis on how the fund keeps high quality control of data. The Head of Pensions explained that the recommendations were seeking approval of the strategy that was regularly reviewed and concluded his report.

RESOLVED: The Pension Committee approved the revised Data Improvement Policy and Plan.

The Governance Officer presented the Northamptonshire Pension Committee Forward Agenda Plan and invited the Committee to note the report.

RESOLVED: That the Pensions Fund noted the forward plan.

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.

To confirm the Private Minutes of the meeting of the Committee held on 30 March 2022.

The private minutes of the previous meeting held on 30 March 2022 were agreed as a true and accurate record of the meeting.

At the Chair’s invitation the Employer Services and Systems Manager introduced the report and shared that the valuation work was on track and the fund were meeting key deadline dates. He explained the fund would be uploading data to actuary next week and would start working on the results and queries with a view to resolve by July to bring to the committee in October. The Employer Services and Systems Manager concluded his report and invited Robbie McInroy from Hymans Robertston so deliver the presentation on Contribution Rate Setting: Unitary and Police Authorities.

RESOLVED: That the Pensions Committee noted the valuation update and approved the process as described by the Fund Actuary in his presentation and as set out in Appendix 2, to be used for setting contribution rates for the large scheduled bodies in the Fund.

The Head of Pensions introduced the report and invited Karen McWilliam and Andreas Pafitis from Aon to deliver their presentation on Cyber Security Assessment: Executive Summary.

Members discussed the report and thanked Aon for their comprehensive presentation.

RESOLVED: That the Pensions Fund Committee:

1) Noted the progress made against the Cyber Strategy Action Plan (Appendix A)

2) Noted the cyber survey response analysis (Appendix B)

3) Noted the presentation by Aon on the cyber survey responses

At the Chair’s invitation the Governance Officer introduced the report and explained that the report detailed the continuation of the Fund’s risk journey in collaboration with the Local Pension Board who reviewed the risk at each meeting and was brought to the Pensions Fund Committee twice a year.

The Governance Officer explained that appendix 1 summarised all the work undertaken over the past 6 months and highlighted recommended changes to the risk register. She highlighted the new risk 28 as it linked with the previous presentation and explained that the fund added the new risk as they felt it was appropriate in order to monitor the possibility of a cyber attack going forward.

Highlighted risk 28 ties in with session presentation.

Since the last review, there were additional changes to the risk register. The executive summary contained a target score and a comments section to alleviate concerns, amber risks on the target score explains if the fund are content with score, as some risks were out of the control of the fund (i.e., external factors such as cyber risk). There was also an additional column in appendix B to give updates on mitigations in progress or implemented so the committee could keep reviewing the progress. The Governance Officer hoped that with the additional changes, members would find the functionality of the risk register more accessible and user friendly. She explained that in terms of the short to medium risks, the Russia invasion of Ukraine would not change until there was more certainty. The impact of the Covid-19 would no longer be recorded, and the risk register would contain the final update on this topic as it was deemed business as usual going forward. The Governance Officer drew attention to the WNC pay and grading review at 5.7.4 and concluded the report.

The Chair thanked Michelle for the accessibility of the report on behalf of members. Members discussed the report and commented that the current biggest risk to the fund was the rising inflation rates. The Governance Officer explained that the starting position on the risk register was 54 risks, but this was hard to maintain so there was an exercise to reduce risks and create overarching ones which encompassed different areas. Inflation would be in line with risk 17 but as this risk rises the fund would relook to see if they needed to change the wording or create a new risk for this area.

RESOLVED: That the Pensions Fund Committee noted the Risk Register.

The Head of Pensions presented the Access Update report and highlighted the salient points. In terms of alternative investments, real estate was approved as the first asset class to be progressed. Hampshire had offered to be the lead authority for Access with guidelines approved in principle at the meeting. The Inter Authority Agreement (IAA) would need to be updated and approved as changes around scheme member representatives and observers would need to be included in the agreement. The IAA was currently being reviewed by the monitoring officers for NNC and WNC and with the approval process the fund hoped the changes would be in effect by 12 September 2022.

RESOLVED: The Pensions Fund Committee noted the Access Update.  

The Chairman to advise whether they have agreed to any items of urgent business being admitted to the agenda.

There were no items of urgent business.