Agenda and minutes

Surrey Local Pension Board
Monday, 23 April 2018 10.00 am

Venue: County Hall, Kingston upon Thames, KT12DN

Contact: Sharmina Ullah 

Items
No. Item

14/18

APOLOGIES FOR ABSENCE AND SUBSTITUTIONS

15/18

MINUTES FROM THE PREVIOUS MEETING: 18 JANUARY 2018 pdf icon PDF 229 KB

16/18

DECLARATIONS OF INTEREST

    To receive any declarations of disclosable pecuniary interests from Members in respect of any item to be considered at the meeting.

     

    Notes:

    ·         In line with the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012, declarations may relate to the interest of the member, or the member’s spouse or civil partner, or a person with whom the member is living as husband or wife, or a person with whom the member is living as if they were civil partners and the member is aware they have the interest.

    ·         Members need only disclose interests not currently listed on the Register of Disclosable Pecuniary Interests.

    ·         Members must notify the Monitoring Officer of any interests disclosed at the meeting so they may be added to the Register.

    ·         Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest.

     

     

    Minutes:

    There were none.

17/18

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 (17 April 2018).

    2. The deadline for public questions is seven days before the meeting (16 April 2018)

    3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.

    Minutes:

    There were none.

18/18

ACTIONS AND RECOMMENDATIONS TRACKER: APRIL 2018 pdf icon PDF 153 KB

    Purpose of the report:

     

    The Board is asked to note its action tracker.

    Minutes:

    Key points raised during the discussion:

     

    1. It was highlighted that upon members request training could be arranged and delivered by the Local Government Association (LGA).

     

    1. It was noted that recommendations concerning asset allocation would be presented to the Pension Fund Committee at its next meeting in June 2018 and subsequently shared with the Board.

     

    1. Officers advised that the additional voluntary contributions (AVC) arrangement was on the project plan and the Board would be presented with an update at its next meeting in July 2018.

     

    1.  The Board were informed that responses in relation to employer discretions had been disappointing. The Board reiterated its concerns on the matter, officers explained that they were exploring a range of options, including the engagement of an external contractor. A report would be submitted at the next meeting in July 2018.

     

    Actions/ further information to be provided:

     

    Officers to provide an update report on employer discretions detailing how the issue will be resolved and what resources would be employed to achieve this.

     

    Officers to provide a project plan update on AVC arrangements.

     

    Recommendations:

     

    The Board noted its actions and recommendations tracker.

     

19/18

SUMMARY OF PENSION FUND COMMITTEE MEETING(S): 9 FEBRUARY 2018, 26 MARCH 2018 pdf icon PDF 284 KB

    Purpose of the report:

     

    The Board is asked to note the content of this report.

     

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Neil Mason, Head of Pensions

     

    Key points raised during the discussion:

     

    1. The Head of Pension introduced the report by summarising key highlights from the two Pension Fund Committee meetings held on 9 February 2018 and 26 March 2018.

     

    1. It was noted that the meeting on 26 March 2018 was held to endorse the appointment of a Fund Actuary, Hymans Robertson.

     

    1. It was further noted that the sequence of meetings was revised to allow the Local Pension Board to review items ahead of the Pension Fund Committee meetings, particularly the review of the risk registers.

     

    1. It was highlighted as the market had had been doing well and the Pensions Fund was in a position to sell upside equity to protect downside equity to protect the Fund’s value.

     

    1. The Board asked how the administration identify and monitor members who are in danger members who are in danger of breaking the annual/lifetime allowance and incurring tax charge, officers agreed to report back at the next meeting.

     

     

    1. It was noted that the Committee agreed that future risk registers to be initially reviewed by the Board and contained within the quarterly Board report to the Committee.

     

    1. The Board were advised that the Fund’s advisor John Harrison had been appointed as interim Chief Investment for Officer BCCP and that Anthony Flectcher was now representing the Fund as the Independent Advisor.

     

    1. It was highlighted that a work was commissioned with True Cost in relation to a Carbon audit and an update report on this would be provided as the Committee’s next meeting.

     

    Actions/Further information to be provided:

     

    Officers to report back at the next meeting on monitoring and advising members who are in danger of breaking annual and lifetime allowance.

     

    Recommendations:

     

    The Board noted the contents of this report.

     

20/18

ADMINISTRATION UPDATE: 1 JANUARY 2018 - 31 MARCH 2018 pdf icon PDF 208 KB

    Purpose of the report:

     

    The Board is asked to note the content of this report and make recommendations if any further action is required.

     

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Neil Mason, Head of Pensions

    John Smith, Senior Advisor (Pension Fund)

    Sue Grimstead, Pensions Ops Manager (Existing Work)

    Natalie Wilton, Support Officer

     

    Key points raised during the discussion:

     

    GMP

     

    1. It was noted that Stage 2 of the GMP reconciliation project was complete and Orbis was going through a procurement process to determine who would be engaged to perform Stage 3 of the process.

     

    1. The Board expressed concerns with the time taken carrying out a mini tender, especially as the GMP reconciliation deadline was approaching on October 2018.

     

    1. Officers noted Member concerns that dependants would need to be considered in the GMP reconciliation process as the implications can affect them too.

     

    1. The Board requested a further update report on GMP reconciliation to be provided to assure Members that the project plan would be delivered despite the Pensions Lead Manager departure.

     

    1. The Board was presented with an updated Pensions Plan (attached as an Annex to the main report) and requested officers to include firm dates to indicate when actions would be completed.

     

    Complaints

     

    1. Members were informed that 8 complaints were received in quarter 4 and were acknowledged within 5 working days. Officers advised that 1 complaint fell out of the standard cycle due to its complex nature.

     

    1. The lessons learned from complaints were being addressed by updating procedures and improving documents and standard forms.

     

    1. Members commended the Helpdesk as feedback suggested good service was being delivered in relation to complaints.

     

    GDPR

     

    1. The Board noted key work streams in progress to ensure compliance with the new GDPR legislation coming into effect on 25 May 2018 with regards to GDPR. The Board asked for a report on implementation at the next meeting.

     

    CIPFA

     

    1. The Board was presented with the CIPFA Benchmarking Report (attached as an Annex to the main report) and commented on the unduly low cost aspect of the service. The Board observed there were extended gaps in the report and partial omissions including actuarial costs, IT costs and statistics for quotations and leavers.

     

    1. The Board also noted the absence of sickness absence comparison data and industry standard PI’s target/achieved figures in the report.

     

    1. Officers clarified that the report did not include data on the gender pay gap, however assured members this would be taken forward to CIPFA for future consideration.

     

    Actions/ further information to be provided:

     

    Officers to provide a follow up report on GMP reconciliation detailing the progress with stage 3.

     

    Officers to provide firm dates when outstanding actions on the administration improvement plan will be complete.

     

    Officers to provide further information and consider a greater level of comparison for future CIPFA benchmarking report.

     

    Officers to provide an update on GDPR implementation at the next meeting.

     

    Recommendations:

     

    The Board noted the content of this report.

     

21/18

ADMINISTRATION PERFORMANCE REPORT: 1 JANUARY 2018 - 31 MARCH 2018 pdf icon PDF 169 KB

    Purpose of the report:

     

    The Board is asked to note the content of this report and make recommendations to the Pension Fund Committee if appropriate.

     

    Additional documents:

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Neil Mason, Head of Pensions

    Sue Grimstead, Pensions Ops Manager (Existing Work)

     

    Key points raised during the discussion:

     

    1. It was noted that a robotics process automation had been developed and would address the red item regarding deferred status. Once implemented this would support and clear the backlog of cases.

     

    1. Refunds were identified as an area that would be increased to reflect this. The report indicated that refunds was the only sensitive area requiring improvement and members suggested that the tolerance level should be increased to reflect this.

     

    1. The Board expressed the view that the service should strive to aim towards the industry benchmark and match performance against CIPFA.

     

    Actions/ further information to be provided:

     

    Officers to report back on the ‘tolerable’ level on refunds processing.

     

    Recommendations:

     

    The Board noted the content of this report.

     

22/18

RISK REGISTERS 2017/18 (QUARTER 4) pdf icon PDF 113 KB

    Purpose of the report:

     

    The Board is asked to note the content of this report and the Fund Risk Register (shown as Annex 1) and Administration Risk Register (shown as Annex 2) and make recommendations to the Pension Fund Committee (Committee) if required.

     

    Additional documents:

    Minutes:

    Declarations of interest:

     

    None

     

    Witnesses:

    Neil Mason, Head of Pensions

    John Smith, Senior Advisor (Pension Fund)

     

    Key points raised during the discussion:

     

    1. As per the Board’s request at its meeting on 18 January 2018, it was highlighted that changes were made to the following risks;

     

    a)    A8, conflicting priorities (Orbis, SCC vs SPF, Pensions, pooling) leads to lack of overall strategy, confusion and missed opportunities.

     

    b)    A12, failure to identify GMP liability leads to ongoing costs for the Pension Fund.

     

    1. The Board noted the inclusion of no additional risks.

     

    1. Members suggested that the risk registers should incorporate a risk on GDPR as the new legislation coming into force had implications going forward.

     

    1. Officers agreed to review risk 8 (Fund Risk Register - Financial failure of a Fund Manager leads to increase costs and service impairment) as Members expressed the view that the wording under mitigating actions was confusing.

     

    1. Members highlighted that scores for risk 1, 2, 3 and 5 (Fund Risk Register) remained the same despite having mitigating actions to treat them. It was suggested  that the action might be changed from ‘treat’ to ‘tolerate’.

     

    Actions/ further information to be provided:

     

    None

     

    Recommendations:

     

    The Board noted the content of this report and made the following recommendations;

     

    a)    Officers to consider including a risk on GDPR

    b)    Officers to consider reviewing mitigating actions for risk 1, 2, 3, 5 and 8.

     

23/18

REVIEW OF INTERNAL DISPUTE RESOLUTION CASES IN 2017/18 (QUARTER 4) pdf icon PDF 170 KB

    Purpose of the report:

     

    The Board is asked to note the content of this report.

     

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    John Smith, Senior Advisor (Pension Fund)

     

    Key points raised during the discussion:

     

    1. The Board received a summary of the appeals in 2017/18 (quarter four) and noted the submission of two first stage appeals and one second stage appeal.

     

    Actions/ further information to be provided:

     

    None

     

    Recommendations:

     

    The Board noted the content of this report.

     

24/18

TRANSITION PLAN: VERBAL UPDATE

    The Board will receive a verbal update from the Head of Business Operations.

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Simon Pollock, Head of Business Operations

    Robert Clarke, Head of Business Operations (North)

     

    Key points raised during the discussion:

     

    1. The Board were informed that a recruitment process was underway to fill the vacant position of the Pensions Lead Manager role. Officers advised that there were three potential candidates and a decision who to appoint would be considered the week commencing 30 April 2018.

     

    1. The Board noted that the Head of Business Operations (North) was acting interim until the successful candidate was appointed to fill the Pensions Lead Manager position.

     

    1. It was highlighted that this round of recruitment had proven difficult to find LGPS people.

     

    1. It was further highlighted that the new appointment was within budget and was not increased.

     

    Actions/ further information to be provided:

     

    None

     

    Recommendations:

     

    The Board noted the verbal update.

     

25/18

ANNUAL SERVICE REVIEW AND CONTINUOUS IMPROVEMENT REPORT: VERBAL UPDATE

    The Board will receive a verbal update from the Head of Business Operations.

     

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Simon Pollock, Head of Business Operations

    Robert Clarke, Head of Business Operations (North)

     

    Key points raised during the discussion:

     

    1. The Board noted three areas of improvement for Pension Services these include assigning the right people in the right places, working through processes and reducing back log with technology.

     

    1. The Head of Business Operations noted Members concerns with the absence of certain data in the CIPFA report and assured the Board this would be reviewed further.

     

    1. Members also highlighted how the report reflected how the service was at the lower end of costs. Officers explained that the report was not a complete reflection of work being completed and going forward would ensure there was more of a balance.

     

    1. The Head of Business Operations expressed good work would continue and stated that the service had an opportunity to excel with new management in place.

     

    1. Members further requested officers to provide revised completion dates for the improvement plan relevant to item 7.

     

    1. The former Pensions Lead Manager was commended for his hard work and contribution by the Board and Service. Officers assured collaborative work would continue between Pension Services and the Pension Fund.

     

    Claire William-Morris left at 12:18pm

     

    Actions/ further information to be provided:

     

    None

     

    Recommendations:

     

    The Board noted the verbal update.

     

26/18

TRAINING BULLETIN (QUARTER 4) pdf icon PDF 220 KB

    Purpose of the report:

     

    This paper presents an outline of recent developments in pensions and it is intended tohelp board members develop a broader understanding of the issues.

     

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    John Smith, Senior Advisor (Pension Fund)

     

    Key points raised during the discussion:

     

    1. The Board were presented with an outline of recent developments in pensions to help Members develop a broader understanding of the issues.

     

    1. The Board expressed the view that the training bulletin was a useful summary and indicated the investment strategy as an area of focus for future training.

     

    Actions/ further information to be provided:

     

    Officers to consider providing Members with investment training.

     

    Recommendations:

     

    The Board noted the content of this report.

     

27/18

SURREY LOCAL PENSION BOARD FORWARD PLAN pdf icon PDF 97 KB

    Purpose of the report:

     

    The Board to note and review its Forward Plan.

    Minutes:

    Declarations of interest:

    None

     

    Witnesses:

    Neil Mason, Head of Pensions

     

    Key points raised during the discussion:

     

    1. The Board were presented with its Forward Plan for the remainder of the calendar year.

     

    1. It was noted following discussions with the Fund Actuary, progress has been made to develop an efficient way to charge employers.

     

    Actions/ further information to be provided:

     

    Officers to clearly identify and separate standing items from other items on the Forward Plan.

     

    Recommendations:

     

    The Board noted its Forward Plan.

     

28/18

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.

     

     

    PART TWO – IN PRIVATE

    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.

     

29/18

BORDER TO COAST UPDATE

    Purpose of the report:

     

    The Board is asked to note the content of this report.

     

    Minutes:

    Key points raised during the discussion:

     

    1. There was a discussion around pension member representation as observers on the Border to Coast Pension Partnership (BCPP) Board, and were supportive of this being implemented.

     

    1. It was subsequently reported that the Scheme Advisory Board is due to issue guidance on this matter. In addition, the BCPP Joint Committee on 24 March 2017 noted that this should be the subject of a future discussion. The Local board asked for information on the approach taken by other pools.

     

    1. The Chairman agreed to take the meeting into Part 2 for this item.

     

    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.

     

30/18

PUBLICITY OF PART 2 ITEMS

31/18

DATE OF THE NEXT MEETING