Agenda and draft minutes
PDF 219 KBVenue: Woodhatch Place, 11 Cockshot Hill, Reigate RH2 8EF
Contact: Toby Nash Email: toby.nash@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Additional documents: Minutes: Apologies for absence were received from Brendan Bradley and Lisa Fogerty-Scott. Siobhan Kennedy joined the meeting virtually. |
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MINUTES FROM THE PREVIOUS MEETING:
To agree the minutes as a true record of the meeting. Additional documents: Minutes: The minutes of the previous meeting held on 15 November 2024 were agreed as an accurate record. |
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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.
Additional documents: Minutes: None declared. |
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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 (17 February 2025). 2. The deadline for public questions is seven days before the meeting (14 February 2025) 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received. Additional documents: Minutes: There were none. |
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GLOSSARY, ACTIONS TRACKER, FORWARD PROGRAMME OF WORK
For Members to consider and comment on the Board’s recommendations tracker and workplan. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Key points raised during the discussion: 1. A member referenced the Knowledge and Understanding action and requested that each Board member be emailed a summary of training completed and outstanding. 2. Officers agreed to provide links to Board members for the training platforms and toolkits. 3. The Director emphasised the importance of completing the trustee toolkit and the Pensions Regulator's public sector toolkit. The training records would form part of the Fund’s submission for the stewardship code. 4. The Chair of Surrey Pension Fund Committee highlighted the training material’s excellent summary of McCloud. 5. The Director confirmed that under action A6/24, an ambition of hosting a meeting of the Board at Dakota would not be possible as there was no way to facilitate access for members of the public. Actions/ further information to be provided: Each Board member be emailed a summary of training completed and outstanding. Board members be provided with links to training platforms and toolkits. Recommendations: The Local Pension Board: 1. Noted the content of the report. 2. Made no recommendations to the Pension Fund Committee. 3. Monitored progress on the implementation of recommendations from previous meetings (Annexe 2). 4. Reviewed and noted any changes on the forward programme of work (Annexe 3). |
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SURREY PENSION FUND COMMITTEE SUMMARY UPDATE
This report provides the Local Pension Board (the Board) with a summary of the Surrey Pension Fund Committee (the Committee) meeting held, 13 December 2024; held since the last meeting of the Board. Additional documents: Minutes: Witnesses: Nick Harrison, Surrey Pension Fund Committee Chair Neil Mason, Director, LGPS Senior Officer Key points raised during the discussion: 1. The Chair of Surrey Pension Fund Committee (PFC) provided a summary of the Committee’s previous meeting: a. Unit4 continued to be a significant concern for the board. The Chairs of both the Board and Surrey Pension Fund Committee met regularly with the Director and Head of Service Delivery on the subject. b. The Service Delivery Team was commended for their excellent progress. c. The common response of the Border to Coast Joint Committee’s response to the Government’s consultation on the future of the LGPS was reviewed. d. Concerns were noted with one particular fund and discussed further in a Part 2 session. e. A session planned for February on investment beliefs was postponed due to possible changes to the scheme and the government’s response. f. The Committee reviewed an asset class at each meeting, for the previous meeting it reviewed private markets. g. The Committee endorsed the presented Border to Coast Pension Partnership (BCPP) Responsible Investment Policy for 2025. 2. The Director added that the BCPP’s contribution to the government's consultation were appreciated. The Pool was required to make a submission to the Government by the end of March, addressing the government's pooling objectives. The objectives were to be an FCA regulated entity, be the principal source of investment advice, deliver expertise and capacity to implement investment strategies, to manage all assets including those that are in legacy situations, and to deliver due diligence to manage local investments. Senior LGPS Officers, Shareholder representatives, and members of the Joint Committee had been in discussions regarding the submission and it would be shared with the board and the committee once it had shareholder approval. 3. A Board member asked whether any individual employers significantly below the whole fund 142% funding level were pressured into increasing their funding level. The Director could not categorically confirm but considered it unlikely, particularly with any of the larger employers. 4. The Chair of Surrey PFC noted that some employers targeting exit from the Fund had adopted a more defensive investment strategy to manage investment risk. 5. The director confirmed that the shortlisting for Best Investment Innovation was for cash flow management. Actions/ further information to be provided: None. Recommendations: The Board: 1. Noted the content of the report. 2. Made no recommendations to the Pension Fund Committee. |
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SURREY PENSION TEAM OVERVIEW - DASHBOARD UPDATE
This paper is an overview of the entire service at a macro level in order to set the context for the following micro level reports from each area. The One Pensions Team Dashboard is the primary vehicle for providing this overview. The dashboard covers the period October – December 2024. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Collette Hollands, Head of Accounting and Governance Nicole Russell, Head of Change Management Key points raised during the discussion: 1. The Director highlighted the continued high performance of the Service Delivery team. 2. The Head of Accounting and Governance noted that the signing of the Council’s accounts for 2023/24, including those of the Pension Fund, was delegated jointly to the Chair of Surrey County Council’s Audit & Governance Committee and Section 151 Officer, was due to occur within the month. Although delayed, it would cause no issues for the Fund and an unqualified external auditor opinion was expected. 3. The Chair raised a recurring issue about the inability to access the software behind the dashboard without a Surrey County Council email address. The limitation was confirmed and alternative solutions had been explored but were currently not available. 4. A Board member commented on the positive progress of the KPIs and raised a question about unallocated receipts. It was explained that the backlog was due to increased receipts and Unit 4 issues, and updates would be made in the next quarter. Actions/ further information to be provided: None. Recommendations: The Board: 1. Noted the content of the report. |
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CHANGE MANAGEMENT UPDATE
This paper details the Change Team Quarterly Report of activity for the period October – December 2024. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Nicole Russell, Head of Change Management Key points raised during the discussion: 1. It was highlighted that the Surrey Pension Team had been nominated for the Defined Benefit Scheme of the Year award, with the ceremony scheduled for early March. 2. The second video in a planned series was uploaded to LinkedIn aimed at enhancing the fund's profile and attracting potential recruits. 3. The fourth pulse survey had closed at the end of December .Early results showed there had been a 20% increase in positive responses for engagement questions from when the first survey was performed two years ago. The full results would be summarised at the next meeting. 4. The Project Review Board had been revamped to improve visibility and prioritisation of resources. 5. Transformation projects were ongoing, including engaging vendors for digital innovation and internal improvements, such as reconciling employer contributions and digitising forms. 6. Concerns were raised about the impact of Local Government Reorganisation (LGR) on governance arrangements and statutory protections for the autonomy of the Fund. Pensions officers confirmed that discovery work was ongoing regarding the impact of LGR, with stakeholder workshops planned. Officers considered that the framework for the protection of pension autonomy was set in statute and the Fund was not at risk of being impacted by changes to the Council’s Constitution. Actions/ further information to be provided: Results of the Pulse survey to be summarised at the next Board meeting. Recommendations: The Board: 1. Noted the content of the report. 2. Made no recommendations to the Pension Fund Committee. |
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SERVICE DELIVERY OVERVIEW
The Board has previously requested to be kept updated on progress relating to a number of key administration projects and planned improvements which may have an impact on members of the pension fund and the purpose of this report is to provide an update on the current status and progress against any specific target dates. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Tom Lewis, Head of Service Delivery Key points raised during the discussion: 1. The Head of Service Delivery reported that the overall performance for the quarter was 97%, a 5% increase from the previous quarter. 2. The success of the new online retirement options were highlighted, which had reduced the average processing time from 9.5 days to 2 days. The service would be further promoted through bulletins to employers. 3. The role of employers in the new process had not changed and the Head of Service Delivery emphasised the importance of providing accurate and timely monthly returns. 4. In response to a question, the Head of Service Delivery explained that terminated, or closed, cases were those that had been set up by the service team in the incorrect workflow. Although the service team had worked to reduce these occurrences significantly, it was an ambition to further reduce them. 5. The relatively low number of complaints, Internal Dispute Resolution Procedure cases, and Ombudsman cases, were highlighted. The Head of Service Delivery noted the ambition to learn from such cases to further improve service delivery. 6. The Fund’s external contractor had provided the final calculation data for the GMP reconciliation but the quality of the data was under review. 7. Approximately 2,000 records required rectification, with final numbers to be confirmed when known. Existing resource being used to complete the work. 8. The legacy case backlog had reached 97% completion, with the remainder requiring input from employers. There were also approximately 2100 legacy backlog cases associated with Surrey County Council. A further 300 cases associated with a payroll provider that was experiencing difficulty in supplying data were also being supported. 9. The Head of Service Delivery confirmed that regardless of issues with Unit4, when investigating a case, there were multiple checks performed to ensure the accuracy of the data. 10. It was recognised that further McCloud cases requiring remedial action would arise through day to day operations, but would be handled through normal channels. 11. A procurement exercise for the Pension Administration System had been carried out. The incumbent contractor had been awarded a 5-year term and contract terms were being finalised. 12. CEM benchmarking had been carried out for a second successive year, primarily through a customer-centric lens. It had highlighted both areas of strength and areas to improve for the fund. It was agreed to provide Board members with a copy of the benchmarking report and uploaded to the pensions SharePoint site. 13. The Board discussed the tight timescales for communications to members that would apply. The Head of service delivery confirmed that a minimum response time of one month was being used and if the data could not be confirmed prior to the cutoff date, the cases would be handled following the pensions increase in April. Actions/ further information to be provided: Provide Board members with a copy of the CEM benchmarking report through the pensions SharePoint site. Recommendations: The Board: |
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RISK REGISTER UPDATE 2024/25 QUARTER 3
This report considers the changes made to the Risk Register for the Surrey Pension Team during Quarter 3 of 2024/25. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Colette Hollands, Head of Accounting and Governance Key points raised during the discussion: 1. The Head of Accounting and Governance confirmed that the recommendation from the Board at its previous meeting, adding narrative to the top 5 risks, had been actioned. 2. Individual teams had reviewed the risk register and broken down the specific risks relating to each team. 3. The Board reviewed the Unit4 issue. The Head of Accounting and Governance confirmed that reports had been setup with only minor snagging issues to resolve, but that the larger issues would only be resolved through changes to the system. 4. The Head of Service delivery confirmed that payroll processing for employee contribution deductions had been amended, but the correction would only apply going forward, requiring remedial work retrospectively. 5. The controls were not yet in place for the Fund’s accounting ledger system. Work between the Fund and Unit4 to scope the necessary controls had been completed and an options analysis for long term improvements was awaited from County Council. 6. Interim workarounds were in place to mitigate the lack of required controls. Daily bank reconciliation was possible and performed. Actions/ further information to be provided: None. Recommendations: The Board: 1. Noted the content of the report. 2. Made no recommendations to the Pension Fund Committee. |
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COMMUNICATIONS POLICY REVIEW
Surrey Pension Fund recognises the importance of providing excellent communication to stakeholders of the pension scheme. This report introduces the Pension Fund communication policy statement. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Nicole Russell, Head of Change Management Key points raised during the discussion: 1. The Head of Change Management noted that there was nothing substantively different from the previous policy. 2. The layout had been altered to improve readability. Actions/ further information to be provided: None. Recommendations: The Board: 1. 1. Noted the policy (shown as Annexe 1) and recommended its approval to the Pension Fund Committee (Committee). 2. Agreed to Review the policy on an annual basis. |
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TRAINING POLICY REVIEW
Surrey Pension Fund recognises the importance of providing appropriate training to both Pension Fund Committee and Local Pension Board Members, as well as Officers in relation to the operation of the Pension Fund. This report introduces the Pension Fund training policy. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Nicole Russell, Head of Change Management Key points raised during the discussion: 1. The Head of Change Management noted that the report had changed in layout to improve readability. 2. New sanctions had been put in place for those that did not complete the mandatory training. 3. Mandatory training had been homogenised across the Local Pension Board and Surrey Pension Fund Committee, and anything mandatory for one had been made mandatory for the other. 4. Concern was raised that the language used for sanctions was more appropriate for employees, rather than Board members. The Director suggested that the language be revisited and emphasised that the spirit was to protect the Board members in exercising their statutory duties. 5. The Chair raised the subject of the induction handbook and the Director agreed that it would be provided to any Board members that had not seen it. It was also suggested that it be renamed to reflect that it was useful for all, and not just new, inductees. Actions/ further information to be provided: None. Recommendations: The Board: 1. Noted the policy (shown as Annexe 1) and recommended its approval to the Pension Fund Committee (Committee). 2. Agreed to review the policy on an annual basis. |
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CONFLICTS OF INTEREST REVIEW
Surrey Pension Fund recognises the importance of providing appropriate training to both Pension Fund Committee and Local Pension Board Members, as well as Officers in relation to the operation of the Pension Fund. This report introduces the Pension Fund training policy. Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Colette Hollands, Head of Accounting and Governance Key points raised during the discussion: 1. The Policy applied specifically to the Surrey Pension Fund and combined the three existing policies; that under Surrey County Council’s Constitution applying to Councillors, under the same Constitution applying to Surrey County Council Officers and Fund advisors, and under the Terms of Reference for Board members. 2. A Board member raised concern whether a Board member had a duty to the Board over that of the group they represented, particularly Scheme members. The Director noted that there was no overarching responsibility to the Board and each employer and member representative on the Board was responsible to those they represented. Actions/ further information to be provided: None. Recommendations: The Board: 1. Considered and noted the content of this report. 2. Provided no comments or suggestions for consideration by the Surrey Pension Fund as to the content of the Surrey Pension Fund (draft) Conflicts of Interest Policy. 3. Made no recommendations to the Pension Fund Committee. |
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SURREY PENSION FUND INTERNAL AUDIT PROGRESS REPORT - QUARTER 3 (01/10/2024 - 31/12/2024)
The purpose of this progress report is to inform the Board of the work completed by Internal Audit in Quarter three of 2024/25 and provide an update on any high priority actions due for implementation. Additional documents: Minutes: Witnesses: Liam Pippard, Principal Auditor (Surrey County Council) Colette Hollands, Head of Accounting and Governance Key points raised during the discussion: 1. The Principal Auditor noted that 2 audits had been completed in the quarter. 2. One audit was performed of the pension fund business continuity arrangements, with 3 actions agreed for it to achieve maturity. The Head of Accounting and Governance confirmed that a timetable for testing was in development. Further progress would be provided to the Board at a future meeting. 3. A Board member asked when the business continuity plan would be tested and the Principal Auditor noted that this would be part of the arrangements increasing in maturity. 4. A second audit was performed on the overseas pension life certification. It was considered a test of controls over an external provider and how they would be modified for a permanent arrangement. Actions had been agreed. 5. High priority actions had been implemented by the Fund. It was recognised that the Banking Controls Review action could not be progressed further given the issues with MySurrey and Unit4. Further discussion would take place in March and an updated assurance rating would need to be provided at some point. 6. Further audits had begun for quarter 4; the deaths administration process, and pension fund investments. Actions/ further information to be provided: Provide progress on the business continuity arrangement to the Board at a future meeting. Recommendations: The Board: 1. Noted the report and considered any further action required in its response to issues raised. |
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LGPS - BACKGROUND REPORT
This report considers recent developments in the Local Government Pension Scheme (LGPS). Additional documents: Minutes: Witnesses: Neil Mason, Director, LGPS Senior Officer Sandy Armstrong, Technical Officer, Pensions Key points raised during the discussion: 1. The Director highlighted that Government consultation on external auditing of local government pension funds was ongoing. The Government was minded to separate the external audit function from that of wider councils for the funds, which Officers supported. 2. The Board spent some time discussing the Government consultation on changes to inheritance tax that would impact the administration of the LGPS. 3. The Fund had provided a robust response to the consultation with concerns raised over the Fund being required to issue information to legal personal representatives within two months. Those representatives would need to gather information from all pension funds belonging to the deceased and it was not clear how a representative would know which to contact. 4. An HMRC tax calculator was proposed that would take all inputted data and calculate the tax owed. The information would then need to be provided to each pension administrator which would in turn have 6 months to pay the death grant, deduct income tax, and remit it to HMRC. The timescales were considered very short. 5. The Fund’s response pushed back on responsibility falling to the pension administrator, that this should in fact remain with the personal legal representative, including tax payments. 6. The Assistant Director offered to provide Board members with a copy of the Fund’s consultation response. Actions/ further information to be provided: Officers to provide a copy of the inheritance tax changes consultation to Board members. Recommendations: The Board: 1. Noted the contents of the report. |
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DATE OF THE NEXT MEETING
The date of the next meeting is 23 May 2025. Additional documents: Minutes: The next meeting was due to be held on 23 May 2025. |