Agenda and draft minutes

Pensions Committee - Tuesday 15th June 2021 6.00 pm

Venue: Maybin & Sunflower Room, One Angel Square, Northampton, NN1 1ED

Contact: Maisie McInnes, Democratic Services 

Items
No. Item

1.

Chair's Announcements

2.

Apologies for Absence

Minutes:

Apologies were received from Janet Blunden and Peter Borley-Cox

3.

Declarations of Interest

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.

Minutes:

Rob Austin and Andy Langford declared disclosable pecuniary interests as members of LGPS. Councillor Graham Lawman declared a disclosable pecuniary interest as a deferred member of LGPS. Councillor Phil Bignell declared a personal interest as his wife is a member of LGPS as a West Northamptonshire Council employee.

4.

Minutes

To approve the Minutes of the meeting of the Pension Committee held on 26 March 2021.

Minutes:

The minutes of the previous meeting held on 26 March 2021 were agreed as a true and accurate record of the meeting.

5.

Action Log pdf icon PDF 431 KB

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Minutes:

At the Chair’s invitation, the Head of Pensions presented the report and explained that the Investment Strategy Statement had been out to consultation and was now being reviewed. The findings would be brought to a future meeting of the Investment Sub-Committee.

 

RESOLVED: That the Pension Committee noted the report.

6.

Appointment of Investment Sub-Committee Members

To appoint members to the Investment Sub-Committee

Minutes:

The Head of Pensions explained that the Investment Sub-Committee membership would consist of 7 members, the Chair and Vice-Chair of the Pensions Committee, two further member representatives of West Northamptonshire Council, an employer representative, a scheme member and a member representative from North Northamptonshire Council.

 

The Chair invited volunteers from West Northamptonshire Council and North Northamptonshire Council to be appointed to the Investment Sub-Committee.

Councillors Phil Bignell and Cathrine Russell from West Northamptonshire Council and Councillor Graham Lawman from North Northamptonshire Council come forward in the discussion.

 

Members voted on the appointment of the Investment Sub-Committee members and the vote was carried.

 

RESOLVED: That Councillors Malcolm Longley (Chair), Charles Morton (Vice-Chair), Phil Bignell, Cathrine Russell, Graham Lawman were appointed as members to the Investment Sub-Committee representing North Northamptonshire Council and West Northamptonshire Council. Rob Austin was appointed as the employer representative and Peter Borley-Cox as the scheme representative.

 

7.

Appointment of Joint Committee Representative

To appoint a representative from the Pension Committee to the Joint Committee (ACCESS Pool)

Minutes:

The Head of Pensions explained that the Pension Committee was required to appoint a member to become the Joint Committee Representative. The Joint Committee (ACCESS Pool) consisted of a number of investment managers and was run by partner funds. The Chair of each pension fund usually represented the fund on the Joint Committee.

 

Councillor Malcolm Longley as the first Chair of the West Northamptonshire Council was nominated to be appointed as the Joint Committee representative.

 

Members voted on the appointment of the Joint Committee representative and the vote was carried.

 

RESOLVED: That Councillor Malcolm Longley was appointed as the Joint Committee (ACCESS Pool) representative.

8.

Administration Performance Report pdf icon PDF 410 KB

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Additional documents:

Minutes:

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.

 

For the period 1 February 2021 to 30 April 2021 the key performance indicators (KPIs) assessed the performance of the Pensions Service processes in line with task monitoring based on industry standards to demonstrate the reporting of LGPS. The KPIs were detailed in Appendix A, and a traffic light rag rating system showed if the Pensions Service were performing to their Service Level Agreement (SLA) target. The Governance and Regulations manager explained that service issues detailed in the report related to the Covid-19 pandemic and a recent change over in staff with the move to Unitary.

 

The next area of administration performance, receipt of employee and employer contributions, detailed the record of payments made to the 19th of the month following the month of deduction. The Governance and Regulations manager stated that there were over 300 scheme employers in the fund and Appendix B detailed the percentage of payments received on time. In March it was recorded that 100% of employers paid on time.

 

The Governance and Regulations manager explained the procedure for late payments as late payments caused delay issues in the Pensions process. The Employer Services and Systems Team Manager would approach employers and consult with them to reach a resolution. The Employer Services and Systems Team Manager explained that there were private sector employers in the fund and as a result of the Covid-19 pandemic, late payments were received as a result of staff being furloughed and businesses being required to close.

 

The Governance and Regulations manager continued presenting the next part of the report, breaches of the law, which the Pensions Service were obliged to report to the Pensions Committee and keep a log of. As detailed in section 5.3.2 of the report the following breach was recorded:

 

 

The Governance and Regulations manager explained that there was a statutory 5-year period for payments to be made, which could cause issues if members changed address and contact details without notifying the Pensions Service.

 

The final section of the report, Internal Dispute Resolution Procedure (IDRP) cases, detailed complaints made by members, prospective members and beneficiaries. The Governance and Regulations manager summarised the IDRP as stage 1 complaints were passed onto the Head of Pensions to review, and if the complaint was escalated stage 2 the complaint would be reviewed by the Monitoring Officer. The Governance and Regulations manager summarised the current complaints as detailed in the table at section 5.4.2 of the report:

 

 

RESOLVED: That the Pensions Committee noted the administrative performance of the Northamptonshire Pension Fund.

9.

Northamptonshire Pension Fund Business Plan and Medium Term Strategy pdf icon PDF 403 KB

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Additional documents:

Minutes:

At the Chair’s invitation, the Head of Pensions presented the Northamptonshire Pension Fund Business Plan and Medium Term Strategy as approved by the Pensions Committee of the outgoing authority Northamptonshire County Council on 26 March 2021. He highlighted the ‘business as usual’ section on page 32 of the report and the budget as set out on page 36 of the report which is split into three budget tables detailing the cash flow projection for 2020/21 and 2023/24, management expenses and administrative and governance expenses.

 

The Head of Pensions explained that the profit and loss estimates are refined throughout the year with regular quarterly progress updates presented to the Pensions Committee with the next update at the annual meeting on 27 July 2021. He advised that work had been undertaken to re-tender the investment advisory services contract and as a result of the procurement exercise, Mercer LLC had been reappointed.

 

The Head of Pensions continued his report and explained that in terms of cyber security, page 43 of the report detailed the Pension Fund’s cyber-resilience strategy. As the Fund holds member data on a server, it is imperative that the Fund continues to put appropriate measures in place to protect assets and data. The report detailed the current work that had been undertaken to assess the Fund’s level of resilience through a specialist team at Aon, the Fund’s governance advisors.

 

He highlighted a few of the current projects that the Pensions Service will be undertaking as detailed from page 44 onwards of the report. As a result of the McCloud judgement ruling, the LGPS Funds would undertake a project to remedy any age discrimination and put protections in place for staff nearing retirement. The Pension Fund would also be preparing for the 2022 valuation of the Pension Fund, which occurred every 3 years. He explained that the fund was currently worth an estimated £3b and the Fund’s would be valuated on 31 March 2022. The Fund would also be reviewing their Responsible Investment policy as work had been undertaken to revise the policy for incorporation in the Investment Strategy Statement. He explained that it had gone out to consultation for 30 days from April to June 2021 and the feedback would be analysed and presented to Pensions Committee at a future meeting.

 

RESOLVED: The Pension Committee noted the contents of the Business Plan and Medium Term Strategy 2021/22.

 

10.

Governance and Compliance Report pdf icon PDF 421 KB

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Additional documents:

Minutes:

At the Chair’s invitation, the Governance and Regulations manager presented the report and explained that the report was a standing item which identified the issues and developments in the governance, management and administration of the Northamptonshire Local Government Pension Scheme (LGPS). She highlighted the Local Government Pension Scheme Advisory Board’s good governance review produced by the Hymans Robertson project team. In terms of governance it was found that the Fund was significantly underperforming which led to the review and recommendations, which are listed on page 52 of the report, have been made to LGPS which has led to changes in governance. The importance of training for members has been emphasised in the review and there will be a series of training modules focusing on building upon their skills and knowledge that members can access as well as a virtual training session hosted by Aon on 21 June from 10am-1pm. In addition, she explained that the Pension Regulator launched a consultation on its new code of practice which had finished on 26 May 2021. Following on from the consultation, there was now a new draft code of practice, which combined 15 codes into the one practice and the revised code of practice will be effective later in the year with the expectation that the pension schemes have 6 months to demonstrate compliance.

 

RESOLVED: That the Pensions Committee noted the report.

 

11.

Northamptonshire Pension Fund Risk Monitoring pdf icon PDF 415 KB

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Additional documents:

Minutes:

At the Chair’s invitation, the Governance and Regulations manager presented the risk register and risk strategy report. She explained that the report would be brought to the Local Pensions Board every 6 months to review and the report would be updated for the next Pensions Committee meeting on 27 July 2021.

 

The Governance and Regulations manager explained the risk register as detailed in appendix 1 of the report and stated that the register was ordered in risk level order with a rag rating system. Then from page 65 of the report, the 26 risks were explained with the controls and mitigations, as well as the investment risks.

 

RESOLVED: That the Pension Committee:

a) Reviewed the current risks facing the Northamptonshire Pension Fund.

b) Approved the risk register including the amendments made as detailed in section 5.1.

12.

Northamptonshire Pension Fund Communications Plan pdf icon PDF 399 KB

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Additional documents:

Minutes:

At the Chair’s invitation, the Employer Services and Communications Manager presented the report and explained that the Communications Plan was an annual report, which was typically presented to the Pensions Committee every March. He shared that there was a move towards digital communication, with members being able to use self-service and access their pensions account online, and the percentage of users utilising the self-service function was at 40%. The Employer Services Manager concluded his report and asked the Pensions Committee to approve the Communications plan.

 

RESOLVED: The Pension Committee approved the Communications Plan.

 

13.

Employers, Admissions and Cessations Report pdf icon PDF 521 KB

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Minutes:

The Employer Services and Communications Manager presented the report and explained it would be a standing item on the agenda for each Pensions Committee, reporting employer admissions agreements and those leaving the fund as detailed in section 5 of the report.

 

RESOLVED: The Pension Committee is asked to:

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

• Alliance in Partnership Limited

• Compass Contract Services Limited

Everyone Active (Sports and Leisure Management Limited)

• Innovate Services Limited

• Miquill (South) Limited

b) Note the admission of the following designating body to the Northamptonshire Pension Fund;

• Northampton Town Council

c) Note the exit of the following body from the Northamptonshire Pension Fund:

• Compass Contract Services Limited

14.

Urgent Business

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

Minutes:

There were no items of urgent business.