Agenda and minutes
PDF 264 KBVenue: Members Conference Room, County Hall, Kingston upon Thames, Surrey KT1 2DN
Contact: Richard Plummer Email: richard.plummer@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Minutes: Apologies were received from Ben Carasco, Margaret James and Philip Walker. |
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MINUTES OF THE PREVIOUS MEETING 29 NOVEMBER 2017
To agree the minutes as a true record of the meeting. Minutes: The Minutes were approved as an accurate record of the previous meeting. |
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DECLARATIONS OF INTEREST
All Members present are required to declare, at this point in the meeting or as soon as possible thereafter (i) Any disclosable pecuniary interests and / or (ii) Other interests arising under the Code of Conduct in respect of any item(s) of business being considered at this meeting NOTES: · Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest · As well as an interest of the Member, this includes any interest, of which the Member is aware, that relates to the Member’s spouse or civil partner (or any person with whom the Member is living as a spouse or civil partner) · Members with a significant personal interest may participate in the discussion and vote on that matter unless that interest could be reasonably regarded as prejudicial. Minutes: There were none. |
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QUESTIONS AND PETITIONS
To receive any questions or petitions.
Notes: 1. The deadline for Member’s questions is 12.00pm four working days before the meeting (Monday 5 February 2018). 2. The deadline for public questions is seven days before the meeting (Friday 5 February 2018). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Minutes: Four questions were submitted by members of the public. These are attached as Annex A. Four supplementary questions were put to the Committee following the responses provided.
Supplementary question submitted by Steve McDonald: The questioner highlighted
engagement events with fossil fuel companies regarding work on
environmental concerns and questioned whether the fund was engaging
with these events and if this was proving successful. Members noted that these events were engaged with and that this work was worthwhile. Officers and Members noted that any decision regarding whether to continue investments in fossil fuels had not been finalised but that the fund will be in a position to make an informed decision after establishing the current exposure to carbon related assets throughout the portfolio. It was stressed that this issue was regarded with the utmost seriousness and that the fund was taking steps to ascertain the impacts of divestment.
Supplementary question submitted by Irene Ridgeon The questioner asked the
Committees views on the ethical impact of investment into fossil
fuels by the Pension Fund and whether the ethical dimension was
taken adequately into account. Response:
Supplementary question submitted by Leonard Beighton The questioner asked what the liabilities in Surrey were in comparison to other funds that have divested which prevents the fund from immediately divesting.
Response: Members noted that there were
different mitigating circumstances across different funds which
were individual to how each scheme functioned, and that they were
not relevant to the Surrey fund’s decision regarding
investment. Supplementary question submitted byPeter Horitz The questioner queried the relationship between the Surrey Pension Fund and the Hammersmith and Fulham Pension fund’s administrative support.
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An action tracker is attached, detailing actions from previous meetings. The Board is asked to review progress on the item listed. Minutes: The contents of the action tracker were noted and agreed by the Committee |
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Purpose of the report: To review and approve the forward plan of the Committee. Minutes: The Chairman of the Committee noted that the actuary interviews would be open to all Members of the Committee and that an invite would be sent to all Members of the Board following the meeting.
Officers noted the Cyber
Security item would be looked at by the Local Board and that the
Pension Fund Committee item on this would aim to tie into
this.
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Purpose of the report: This report is a summary of administration and governance issues reviewed by the Local Pension Board at its meeting of 18 January 2018 that need to be brought to the attention of the Pension Fund Committee.
Additional documents: Minutes: Witnesses: Nick Harrison, Chairman of the
Surrey Local Pension Board Key
points raised in the discussion:
RESOLVED: That the Pension Fund Committee:
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INVESTMENT STRATEGY STATEMENT
Purpose of the report: The pension fund is required to publish an investment strategy statement (ISS) as a result of new investment regulations. It is a statutory requirement that the Pension Fund Committee should approve and regularly review its ISS. Additional documents: Minutes: Witnesses: Neil
Mason, Head of Pensions Key points
raised in discussion:
1.
It was noted by officers that the current version of
the Investment Strategy Statement was agreed at the last meeting of
10 November 2017.Changes to this iteration were noted in pages 35
and 26 of the report pack.
2.
Officers highlighted that this was a high level
strategic document. Members noted the changes to the
report. RESOLVED: 1. That the Committee approved the latest Investment Strategy Statement
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PENSION FUND BUSINESS PLAN 2018-19
Purpose of the report: The 2001 Myners Report recommended that local authority pension funds should approve an annual business plan in respect of the objectives required for the ensuing year. Business planning is regarded as an important tool, assisting in the identification of how service delivery can be maximised within resource constraints.
Additional documents: Minutes: Witnesses: Neil
Mason, Head of Pensions Key points
raised in discussion:
1.
Officers noted that the key objectives of the
business plan were broken down into several key areas of focus:
Administration, Communications, Actuarial/Funding, Governance,
Financial and Risk Management and Investment. These would be
augmented by a high level mission statements that would be added to
the forward plan in June 2018.
2.
Officers noted that there would be an overall
progress update on the business plan in one financial year and that
the service could provide short progress updates on the business
plan to the committee over the year to assure the committee that
actions were being effectively managed. RESOLVED: 1. That the Committee adopted the proposed Business Plan.
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CORPORATE GOVERNANCE SHARE VOTING
Purpose of the report: This report provides a summary of the Fund’s share voting process in Q3 of 2017/18 (1 October 2017 to 31 December 2017).
Additional documents: Minutes: Witnesses: Neil
Mason, Head of Pensions
Key points
raised in discussion:
1.
Officers noted that there had been no significant
changes to the Corporate Governance Share Voting scheme since it
was last reviewed by the Committee. Members recognised that the
version that they had approved previously was adequate and that
there were no mitigating circumstances to suggest that the
Committee review the scheme.
Ayesha Azad entered the meeting at 10.39am 2. Members requested that the recommendation to the committee reflect that the report has not changed significantly since its last review and that it note the current version, rather than latest version.
RESOLVED: That the Committee
1. Noted the report; and
2. Approved the latest version of the Responsible Investment and Stewardship Policy and Voting Template.
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Purpose of the report: A cash-flow analysis allows the Fund to ascertain a projection as to when benefit payments make exceed income. This information can influence both the investment and funding strategy.
Additional documents: Minutes: Witnesses: Neil
Mason, Head of Pensions Key points
raised in discussion:
1.
Members expressed interest in the current balance of
cash-flow, but noted that there were no accounts made in the report
relating to investment income generated and the implications of
this. Officers explained that there was a financial buffer received
from investment income. It was also noted that this investment
income was important to compound return on assets.
2.
Members raised concerns regarding evidence of a
possible future drop in income generated due to potential falls in
membership of the pension fund. It was noted that this risk is
continued to be monitored as part of the risk register.
3.
Officers noted that there was no current requirement
to draw income from assets, but that there was a risk that the fund
could become cash-flow negative without such income drawing within
the period of seven years as a result of staff changes in the
organisation and other unforeseen circumstances.
4.
Officers noted that there had been recent reduction
in the Annual Allowance, highlighting that this could increase the
risk to cash-flow to the fund should a significant number of senior
officers elect to opt out of the fund. It was noted that the
allowance changes had effected the Surrey fund less than in other
areas, but that this was increasing. Officers noted that work
needed to be undertaken to assess how this would affect the fund in
future.
5.
Officers noted that the cash-flow analysis could
incorporate a breakdown of key risks and a detailed list of
scenario plans to mitigate these risks in the next iteration of a
cash-flow analysis report.
6.
Members questioned why the average age of
contributors was so high. Officers noted that fund member’s
age was weighted by liability which created a high average. It was
noted that this was common with other Local Government Pension
Schemes (LGPS).
7.
Members questioned whether there was any risk
following the transition of schools from being maintained by the
Local Authority to being managed by academy trusts. Officers noted
that the proportion of education staff in the scheme was
significant and that the risks that could arise from this could be
incorporated into the next report to the committee. 8. Members noted their interest in this report and suggested that a regular update could be provided to the committee on a quarterly basis, with a more comprehensive actuarial forecast provided on an annual basis. RESOLVED: 1. Noted the simple cash-flow position for quarters two and three.
2. Noted the assessment as to when the Fund may become cash-flow negative
3. Agreed that a regular update would be provided to the committee on a quarterly basis including a breakdown of key risks and a detailed list of scenario plans.
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RISK REGISTERS: PENSION FUND AND ADMINISTRATION
Purpose of the report: Surrey County Council, as administering authority for the Surrey Pension Fund, is responsible for the delivery of benefit promises made to members of the Surrey Pension Fund. It achieves this by setting objectives and goals with varying timeframes. Risks lie in failing to meet the intended goals.
Risks that are established as an issue must be identified and evaluated via a risk register. The risks must be prioritised with existing controls or new controls implemented to mitigate the risks. This should be recorded in a risk register, which should be monitored on a quarterly basis.
Additional documents: Minutes: Witnesses: Neil
Mason, Head of Pensions Key points
raised in discussion:
1.
Members questioned whether there were any potential
risks regarding future cash-flow and whether this should be added
as an additional risk to the register for future analysis. Officers
noted that cash flow risk was included in the Pension Fund Risk
Register.
2.
Officers noted that the risk register had remained
static from the last meeting of the committee.
3.
Members noted that there was a potential risk to the
fund to inaccuracies in the GMP records which needed to be
considered and monitored carefully by the fund.
4.
Officers highlighted that the risk registers used a
standard calculation of risk and mitigated risk scores which are
used nationally by local government pension schemes. It was
suggested by the Chairman of the Local Pension Board that they
could consider how the risks are measured and whether the weighting
is appropriate at a later date. RESOLVED: The
Committee:
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EXCLUSION OF THE PUBLIC
Recommendation: That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information under the relevant paragraphs of Part 1 of Schedule 12A of the Act. Minutes: Resolved: That under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information under the relevant paragraphs of Part 1 of Schedule 12A of the Act.
PART TWO – IN PRIVATE |
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PUBLICITY OF PART 2 ITEMS
To consider whether the item considered under Part 2 of the agenda should be made available to the Press and public. Minutes: It was agreed that the content of the discussion contained exempt information which could not be made available to the press and public.
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DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Committee will be on 8 May 2018. Minutes: The date of the meeting was amended from the date published in the agenda of the meeting and corrected to 8 June 2018. |