To provide the Board with a verbal update on matters discussed at the Surrey Pension Fund Committee
Minutes:
Declarations of interest: None
Witnesses:
Sue Grimstead, Operations Manager, Pension Services
Neil Mason, Senior Advisor (Pension Fund), Pensions and Treasury
Alex Moylan, Senior Accountant, Finance, Pension Fund and Treasury
Phil Triggs, Strategic Finance Manager
Key points raised during the discussion:
1. The Board noted that the Surrey Pension Fund Committee had approved pooled ill health retirement self-insurance for all employers. This offered a better rate, and also would impact the actuarial assessment of the allowance. The Board was informed that the ill health allowance was anticipated to be approximately -1% of contributions on a Fund wide basis, although this will be confirmed at as part of the triennial valuation.
2. The Board highlighted that this was a position formerly adopted by the Fund, and that changes were introduced to encourage best practice and increase awareness of the costs to the employer. It was noted that the regulations around ill health had become more stringent in the intervening years. The Board was also informed that the change would have no impact on member rights.
3. The Board was informed that the Committee had reviewed the Fund’s administration Key Performance Indicators (KPIs). 6 of these KPIs were not on target, and the correspondence between the Chairman and Cabinet Member was highlighted as being reflective of this. The Board discussed the benefit of being able to see KPIs such as transfers out in terms of range, in order to show how late employers had been in reporting. It was confirmed that the KPIs and manner in which they were measured would be a consideration in a planned review of the Fund’s administration strategy.
4. The Board was given an update on the Committee’s discussion regarding new investment regulations. There remained concern from the Committee that the regulations would see greater central government interference, and the draft response to the consultation had been strengthened to reflect that view. It was noted that the previous investment regulations had been rescinded and the draft regulations were waiting to be enacted.
5. The Board resolved:
· that under Section 100(A) of the Local Government Act 1972, the public be excluded from the meeting as the discussion of item 7 of the Committee’s agenda on 13 May 2016 would involve the likely disclosure of exempt information under the relevant paragraph of Part 1 of schedule 12a of the Act.
6. The Board discussed the decision taken by the Committee regarding the discount rate methodology for the 2016 valuation. Following this discussion the meeting was then re-opened to the public.
7. The Board discussed the result of the EU referendum, and its impact on the Fund. It was noted that there was early indications that there would be further cuts to interest rates. It was noted that the Bank of England and Chancellor had both made announcements that had sought to reassure the financial markets following the result.
Recommendations:
None.
Actions/further information to be provided:
The Board will review the results of the review of the Fund's administration strategy and changes to KPIs.