Councillors and committees

Agenda and minutes

Venue: Ashcombe Suite, County Hall, Penrhyn Road, Kingston upon Thames, Surrey, KT1 2DN

Contact: Ben Cullimore  020 8213 2782

Items
No. Item

19/19

APOLOGIES FOR ABSENCE AND SUBSTITUTIONS

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    To receive any apologies for absence and substitutions.

    Minutes:

    Apologies were received from Graham Ellwood, Tina Hood, Paresh Rajani and Trevor Willington.

20/19

DECLARATIONS OF INTEREST

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    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:

    None received.

21/19

QUESTIONS AND PETITIONS

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    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 2019).

    2. The deadline for public questions is seven days before the meeting (18 April 2019).

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

    Minutes:

    None received.

22/19

MINUTES FROM THE PREVIOUS MEETING: 17 JANUARY 2019 pdf icon PDF 89 KB

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    To agree the minutes as a true record of the meeting.

    Minutes:

    The minutes were agreed as an accurate record of the meeting.

23/19

ACTION TRACKER pdf icon PDF 76 KB

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    The Board is asked to review its actions tracker.  

    Additional documents:

    Minutes:

    Witnesses:

     

    Ben Cullimore, Democratic Services Assistant

    Ayaz Malik, Pensions Accountant Advisor

    Andrew Marson, Pensions Lead Manager

    Neil Mason, Senior Finance Manager

    John Smith, Senior Advisor (Pensions)

     

    Key points raised during the discussion:

     

    1.    The Pensions Accountant Advisor tabled an additional document on address tracing options (attached as Annex 1).

    2.    The Board agreed that A1/15 would be removed from the action tracker, as it refers to a long-term standing item. The Chairman also requested an update in six months’ time on the progress of A2/16.

    3.    The Board discussed Actions A1/18, A1/19 and A10/19 and agreed to mark all three as complete.

    4.    Referring to A4/18, the Board was told that the cyber security presentation would be provided at a later date. Members were also informed that the Chairman had received a brief on the appointment of consultants to review AVC recommendations (A2/18) and that a report was likely to be presented at the 18 July 2019 meeting. It was agreed that the item would be added to the forward plan.

    5.    Regarding A6/18, the Board agreed to look at the progress made on the development of service improvements at each of its meeting.

    6.    The Board was told that the feedback generated from the annual and lifetime allowances roadshows and drop-in surgeries (A8/18) would be provided by the Pensions Administration team at either the 18 July 2019 or 24 October 2019 meeting.

    7.    It was brought to the Board’s attention that A11/18 should be cross-referenced with A9/19 and not A8/19.

    8.    Discussing A2/19, the Strategic Finance Manager said that the governance review would be presented to the Board at the 18 July 2019 meeting and that recommendations from the report would be ready for viewing at the next Pension Fund Committee meeting on 7 June 2019.

    9.    The Pensions Lead Manager told the Board that invites would be sent out for the proposed improvement plan workshop (A4/19) and that he was hoping to organise it for May 2019.

    10.  The Board discussed A12/19, and the Senior Advisor confirmed that the question of recovering GMP overpayments had been referred to Legal Services and they had deferred to the view prepared for the Local Government Association by Squire Patton Boggs (SPB). The Board agreed to follow SPB’s advice and noted that it had been widely adopted across the Local Government Pension Scheme.

     

    Actions/further information to be provided:

     

    1.    All completed actions are to be removed from the action tracker.

    2.    Items on AVCs  and cyber security are to be added to Board’s forward plan.

    3.    A11/18 is to be deleted and A9/19 carried forward instead.

     

    Resolved:

     

    The Board reviewed its action tracker and updated it as agreed.

24/19

FORWARD PLAN pdf icon PDF 52 KB

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    The Board is asked to review its forward plan.

     

    Additional documents:

    Minutes:

    Witnesses:

     

    None.

     

    Key points raised during the discussion:

     

    1.    The Board agreed to add items on cyber security, governance and AVC to the agenda for the next meeting on 18 July 2019.

    2.    It was also agreed that an item on annual and lifetime allowances and an update on discretions would be considered at the 24 October 2019 meeting.

     

    Actions/further information to be provided:

     

    The Board’s forward plan is to be updated as agreed.

     

    Resolved:

     

    The Board reviewed its forward plan.

25/19

SUMMARY OF THE PENSION FUND COMMITTEE MEETING OF 8 FEBRUARY 2019 pdf icon PDF 140 KB

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    The Pension Fund Committee met on 8 February 2019. This report provides a summary of this meeting and any resolutions made.

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Neil Mason, Strategic Finance Manager

     

    Key points raised during the discussion:

     

    1.    The Strategic Finance Manager provided a brief overview of the most recent Pension Fund Committee meeting on 8 February 2019 and informed the Board that its recommended changes on the risk register included in the Board paper were approved by the Committee.

    2.    Board Members were also told that the Committee had been informed about the serious administration errors and that a detailed update report on the issue would be presented at the 7 June 2019 meeting.

    3.    The Board heard from the Strategic Finance Manager about the revised investment strategy statement, which included the revised Responsible Investment Policy of Border to Cast (this had also been agreed by all 12 Border to Coast partner funds).

    4.    Responding to a question from the Chairman about the downside equity protection strategy, the Strategic Finance Manager informed the Board that this would expire in December 2019 but that the Committee would discuss whether to extend this at its meeting on 13 September 2019.

     

    Actions/further information to be provided:

     

    None.

     

    Resolved:

     

    The Board noted the report.

26/19

ADMINISTRATION UPDATE (1 JANUARY 2019 TO 31 MARCH 2019) pdf icon PDF 124 KB

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    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:

     

    Tom Lewis, Pensions Support and Development Manager

    Andrew Marson, Pensions Lead Manager

     

    Key points raised during the discussion:

     

    1.    The Pensions Support and Development Manager provided a handout to Board Members (attached as Annex 1).

    2.    The Board heard from the Pensions Lead Manager, who provided an update on recent developments in the Pensions Administration department. Members were told that officers had an optimistic outlook and that stakeholders were providing the required support.

    3.    The Pensions Lead Manager discussed the reorganisation that had taken place within Pensions Administration, which included staff receiving a personal development plan that allowed them to better focus on targets. He also updated the Board on the appointment of a new team leader.

    4.    In relation to the GMP reconciliation, Board Members were informed that Pensions Administration had received all of the member queries and discrepancies from HMRC, with JLT managing to finish that area of work by the April 2019 deadline set out in the report.

    5.    Responding to a question from the Chairman about JLT and the backlog project, the Pensions Lead Manager informed the Board that a contract had been signed and backlog work was being sent over. He also provided an update on the number of frozen refunds processed, which now numbered over 2,500.

    6.    In relation to end of year/annual benefit statements, the Board heard that of the 276 employers in the Fund, 216 annual returns had been made. The final reminder had been sent out on 25 April 2019 and Pensions Administration would be able to send out a summary and discuss the best course of action once the deadline was reached at the end of April.

    7.    The Chairman said that it was encouraging that new roles had been identified and filled and asked if there were any outstanding vacancies. In response, the Pensions Lead Manager told Board Members that the Pensions Administration team was not entirely up to strength as they were in the process of interviewing for a handful of junior level roles.

    8.    A Member of the Board asked about the outstanding liability for early retirement strain payments and was told by the Pensions Accountant Advisor that Pensions Finance were in the process of analysing the data they had received from Pensions Administration. It was further noted by the Chairman that checks were being run on data going back to 2009 but that these related to missing payments and did not mean that none had been issued since that date.

    9.    In response to a question about skills gaps in the department, the Pensions Lead Manager told the Board that it would take time to build up the necessary knowledge and experience amongst members of the team and that he was looking to improve leadership qualities.

    10.  The Chairman discussed the level of complaints that had been received, the number of which had remained relatively stable at approximately 12 per quarter. In response, the Pensions Lead Manager said that he expected the number to grow  ...  view the full minutes text for item 26/19

27/19

ADMINISTRATION PERFORMANCE REPORT (1 JANUARY 2019 TO 31 MARCH 2019 - QUARTER FOUR) pdf icon PDF 118 KB

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

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Andrew Marson, Pensions Lead Manager

    John Smith, Senior Advisor (Pensions)

     

    Key points raised during the discussion:

     

    1.    The Senior Advisor introduced the report to the Board and explained that the figures included were being presented using the old system of Key Performance Indicators (KPIs) and that the new format would be used for the report tabled at the next Board meeting on 18 July 2019.

    2.    The Chairman noted that a substantial number of reds had turned to greens and that caseloads looked to be at a more manageable level. However, he also expressed his concern about death processing and was told by the Senior Advisor that the related numbers were down but looked much better than they did previously.

    3.    Speaking about the processing of death cases, the Pensions Lead Manager told the Board that the reorganisation of the team meant that such cases were now being handled by one team rather than being distributed across all operations.

    4.    The Chairman commented on the changes made to the columns in the table accompanying the report and the Senior Advisor ran through the alterations that had been made and the ways in which the information presented to the Board was now more streamlined than it had been previously. The Pensions Lead Manager said that the Board now had visibility not just of the work completed but also the work in hand, and this would help give them a much fuller picture of developments moving forward.

    5.    Discussing the move to the new system of reporting, the Strategic Finance Manager said that there would be coordinated working between the Pensions Administration and Finance departments moving forward. He also told the Board that the new metrics would be put on the Local Pension Board paper to go the Pension Fund Committee for its approval.

    6.    The Chairman asked whether the previous quarter’s data would be presented using the new system of reporting and was told by the Senior Advisor that the information could be brought to the Board but it would not be possible for them to present it into the new format. The officer also said that he was expecting the figures to look worse initially as backlogs were addressed, due to more accurate reporting, but that the new metrics would help to identify the trajectory moving forward.

    7.    After a discussion about the unexpectedly low number of deaths reported, the Chairman suggested that the Board keep an eye on the issue and the degree to which it could potentially grow.

    8.    A Member of the Board told officers that it would be important for the new format of KPIs to remain in use for as long as possible as it had already changed twice during his time on the Board.

     

    Actions/further information to be provided:

     

    None.

     

    Resolved:

     

    The Board noted the content of the report.

28/19

RISK REGISTERS 2018/19 (QUARTER FOUR) pdf icon PDF 123 KB

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

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Tom Lewis, Pensions Support and Development Manager

    Ayaz Malik, Pensions Accountant Advisor

    John Smith, Senior Advisor (Pensions)

     

    Key points raised during the discussion:

     

    1.    The Board heard from the Pensions Accountant Advisor, who updated Members on the changes made to the risk register. These were made to reflect the recommendations made by Members at the last meeting, and the ratings now better reflected the updated risks.

    2.    Responding to a question from the Chairman about item 3 in Risk A5, concerning its i-Connect system, the Support and Development Manager informed the Board that testing had finished at the end of March after a four-month trial. Pensions Administration were now using the information gained to compile a business case on whether or not it was a viable option, and they hoped for this to be ready to present by the end of May 2019. The Board was also told that Pensions Administration were looking to implement iConnect around September of that year.

    3.    Members of the Board were informed that reconciliation was now going to be done every quarter rather than annually, which would reduce risk moving forward. The Senior Advisor then went on to say that officers were hoping to eventually reconcile every month in an attempt to improve accuracy.

    4.    The Chairman questioned officers about Risk A4, which showed the residual risk being higher than the inherent risk, and was told that this was an error and would be updated prior to it being presented to the Pension Fund Committee. It was also agreed that Risk A18 would be removed, as it would be captured in other risks.

    5.    The Board discussed the officers’ judgement that many of the residual risks in the administration risk register were modified from amber to green as their likelihood had been amended from ratings of 3 to 2. This represented there being a plan that was to be implemented, but the implementation process was still in its infancy. The Chairman asked that this view was treated with caution and passed on to the Pension Fund Committee at its next meeting.

     

    Actions/further information to be provided:

     

    1.    Risk A4 is to be amended prior to it being presented to the Pension Fund Committee.

    2.    Officers are to inform the Pension Fund Committee about the assumption underlying the amendment of risks from amber to green on a residual basis, and the Board’s view that this is treated with caution.

     

    Resolved:

     

    The Board noted the content of the report.

29/19

TRAINING POLICY pdf icon PDF 111 KB

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    Surrey Pension fund recognises the importance of providing appropriate training to Pension Fund Committee, Local Pension Board members and officers in relation to the operation of the Pension Fund. This report introduces the pension fund training policy as set out in Annex 1, which was approved by the Pension Fund Committee on 8 February 2019.

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Ayaz Malik, Pensions Accountant Advisor

     

    Key points raised during the discussion:

     

    1.    The Pensions Accountant Advisor introduced the revised version of the training policy to the Board and told Members that whereas the previous policy had only covered Local Pension Board members, the new version also covered the Pension Fund Committee and relevant officers.

    2.    The Board heard that a training plan was to be developed for 2020 based on the specific needs of the Members, and that reminders for upcoming meetings were regularly sent out to Members.

    3.    A Member of the Board requested that future training sessions fall on the same day as Board meetings and was told by the Pensions Accountant Advisor that they will aim to make this possible.

     

    Actions/further information to be provided:

     

    None.

     

    Resolved:

     

    The Board noted the content of the report.

30/19

COMPLIANCE WITH THE PENSIONS REGULATOR'S CODE OF PRACTICE NO. 14 pdf icon PDF 112 KB

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    The paper outlines how Surrey County Council (SCC) Pension fund complies with the Pensions Regulator’s (TPR) Code of Practice 14 in Annex 2, which sets out of the requirements and expected standards for the governance associated with the administration of public sector pension schemes.

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Ayaz Malik, Pensions Accountant Advisor

    Neil Mason, Strategic Finance Manager

     

    Key points raised during the discussion:

     

    1.    The Pensions Accountant Advisor introduced the report and explained to the Board that it outlined how the Council’s pension fund complied with the Pensions Regulator’s Code of Practice 14. The officer went on to say that the fund complies with most of the areas and that it was highlighted in the report where further actions were required.

    2.    Referring to the Item 11 about the pensions regulator’s toolkit on page 114, the Pensions Accountant Advisor informed the Board that a reminder was sent out to members who were yet to complete it. The Strategic Finance Manager mentioned that Pension Fund Committee members were to be encouraged to complete induction training, although it is not a statutory requirement for the Committee members.

    3.    The Chairman requested that Item 27 on page 119, which referred to an “independent chair”, was altered to say that he is an elected councillor – albeit not a member of the ruling party and one with pension experience.

    4.    In response to a question about Item 30 on page 120, the Pensions Accountant Advisor told the Board that it had been found that some policies had not been updated on the website and that officers would ensure that the Surrey Pension Fund website was up to date going forward.

    5.    The Board were informed that Item 38 on page 121, which was concerned with monitoring controls, was labelled as “partially” due to internal audit currently undertaking a report on the matter.

    6.    The Pensions Accountant Advisor told Members of the Board that the Pensions Finance department were working on a communications strategy so that the information provided to employers is completed in a timely manner, and that they were working on making sure all the information is converted electronically and put on the system. The Chairman then asked for the relevant item to be amended so that the ongoing project was noted.

    7.    The Chairman queried why Item 60 on page 129 was only labelled as “partially” and was told by the Pensions Accountant Advisor that the large majority of contributions were received on a timely basis but with nearly 300 employers it was often required for officers to chase some employers. It was thus suggested that the procedures were to be reviewed and policies more strictly enforced moving forward. The Strategic Finance Manager informed the Board that iConnect would be a helpful contribution to this.

    8.    The Pensions Accountant Advisor was commended for a thorough piece of work.

    9.    It was agreed that moving forward the compliance checklist would be scheduled for review on an annual basis but for the items labelled as “partially” to be looked at by the Board in six months’ time.

     

    Actions/further information to be provided:

     

    1.    Members are to complete the pensions regulator’s toolkit.

    2.    Item 27 to be amended where it refers to “an independent chair” to reflect the fact that the  ...  view the full minutes text for item 30/19

31/19

REVIEW OF INTERNAL DISPUTE RESOLUTION CASES IN 2018/19 (QUARTER FOUR) pdf icon PDF 147 KB

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

     

    Minutes:

    Witnesses:

     

    John Smith, Senior Advisor (Pensions)

     

    Key points raised during the discussion:

     

    1.    Before hearing from officers, the Chairman informed Members that pages 210 and 211 had been accidentally added to the agenda and requested they be ignored.

    2.    The Senior Advisor told the Board that only three appeals had been received, with only one of those being a bona fide appeal. The other two had been treated as such because officers were mindful that the disputes fell within the pension ombudsman’s remit and it would be helpful to set out the facts and control the narrative.

    3.    The Board heard about the main appeal in more detail, which dealt with an employee having a request for flexible retirement denied after their employer had received a pension estimate in accordance with the employer’s flexible retirement policy. The Senior Advisor informed Members that the correct procedure had been followed and the appeal was dismissed.

     

    Actions/further information to be provided:

     

    None.

     

    Resolved:

     

    The Board noted the content of the report.

32/19

RECENT DEVELOPMENTS IN THE LGPS pdf icon PDF 116 KB

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

     

    Minutes:

    Witnesses:

     

    Andrew Marson, Pensions Lead Manager

    John Smith, Senior Advisor (Pensions)

     

    Key points raised during the discussion:

     

    1.    The Senior Advisor informed the Board that, following a consultation, the regulations had been amended to allow MHCLG to produce statutory guidance. There was concern that this would be issued without the checks and balances of consultations and draft regulations that precede changes to the scheme regulations and could lead to changes being introduced without adequate scrutiny.

    2.    The Board heard about other recent developments, such as members who had left employment under the 1995 regulations being able to elect to draw their pensions from the age of 55, and parity with widows’ pensions being extended to the survivors of civil partnerships and same-sex marriages but not widowers.

    3.    Members were also informed about the potential impact of the McCloud case (age discrimination) on the cost cap and the proposed improvements to the benefit structure that had been put on hold pending clarification. Further consultations had started on exit credits (payments when exiting employers are in credit) and limitation of exit payments (broadly, a £95,000 limit on compensation for loss of employment) and these would be reported on at the next meeting of the Board.

    4.    The Chairman questioned the Pensions Lead Manager about paragraphs 7 and 8, which were concerned with reporting to HMRC and overseas transfers, and was told that the numbers involved did not present any difficulties for the Pensions Administration department.

     

    Actions/further information to be provided:

     

    None.

     

    Resolved:

     

    The Board noted the content of the report.

33/19

MINISTRY OF HOUSING, COMMUNITIES AND LOCAL GOVERNMENT (MHCLG) - STATUTORY GUIDANCE ON ASSET POOLING pdf icon PDF 124 KB

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

     

    Additional documents:

    Minutes:

    Witnesses:

     

    Neil Mason, Strategic Finance Manager

     

    Key points raised during the discussion:

     

    1.    The Strategic Finance Manager presented to the Board an overview of the statutory guidance on asset pooling issued by the Secretary of State for the Ministry of Housing, Communities and Local Government. He informed Members that the Fund was supportive of the intent of the pooling proposal but that there were some areas in which further clarity was requested, and this had been conveyed through a consultation response sent on behalf of Surrey County Council.

    2.    The Board were informed that the Surrey Pension Fund would not be able to incorporate all of the Chartered Institute of Public Finance and Accountancy guidance during the current year but that they had been told that this would take place from 2020.

     

    Actions/further information to be provided:

     

    None.

     

    Resolved:

     

    The Board noted the content of the report.

34/19

EXCLUSION OF THE PUBLIC

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    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.

     

35/19

BORDER TO COAST UPDATE

Minutes:

Witnesses:

 

Neil Mason, Strategic Finance Manager

 

Key points raised during the discussion:

 

1.    The Strategic Finance Manager updated the Board on the Border to Coast Pension Partnership Joint Committee (JC) meeting of 11 March 2019.

2.    The Board was informed that there would be an election for new Chairman and Vice-Chairman representatives at the next JC meeting.

3.    The Strategic Finance Manager spoke about the transition of Surrey Pension Fund’s global equity portfolio. Work was underway on designing this sub-fund and satisfying the necessary conditions to allow this transition. Further updates were to be provided at the 7 June 2019 meeting of the Surrey Pension Fund Committee.

4.    Responding to a question from the Chairman about the proposed five managers associated with the Border to Coast national pool, the Strategic Finance Manager informed the Board that the Fund fed into the process of deciding the investment strategy that this combination of managers would aim to deliver. Eight partner funds are expected to be investing in the global fund. The officer also told Members he was happy that Border to Coast was meeting the Fund’s objectives and that this will continue to be the case after the investment strategy had been reviewed.

5.    The Board heard about the other areas the Fund was working on, which included a commitment to make an investment in the private equity in Border to Coast. The Fund was also in the process of looking at further investment opportunities in private markets and were working on a fixed interest portfolio that was still in the early stages of development.

6.    The Chairman asked if existing private equities were to be transferred to Border to Coast and was told by the Strategic Finance Manager that it was the Fund’s plan to do so.

7.    Referring to paragraph 44 of the report, which was concerned with whether or not any savings had been made as a result of pooling, the Strategic Finance Manager informed the Board that the Fund was paying roughly the same than they did into the UK fund and that there were positive early signs.

 

Actions/further information to be provided:

 

None.

 

Resolved:

 

The Board noted the content of the report.

36/19

DATE OF THE NEXT MEETING

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    The next meeting of the Surrey Local Pension Board will be held on 18 July 2019.

    Minutes:

    The next meeting of the Surrey Local Pension Board will be held on 18 July 2019.