Agenda item

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

Declarations of interest:

None

Witnesses:

Jason Bailey, Pensions Lead Manager

Neil Mason, Senior Advisor (Pension Fund), Pensions and Treasury

Key points raised during the discussion:

1. The Chairman tabled a number of responses from local pension boards within the pooled arrangements. These outlined the views of different boards with reference to member representation at a pool level. This document is attached as an annex to these minutes.

2. The Board discussed the governance structure for the pooled funds, including the role of the shareholder board and joint committee. It was noted that any decision required 75%-100% approval by those administering authorities within the pool. The Board was informed that the administering authorities would retain sovereign responsibility with respect to setting the asset and funding strategy for the pooled fund. Officers outlined that the proposal was due to go to full Council on  22 March 2017 for decision, with implementation in April 2018.

3. The Board queried how quickly assets would be transferred to the pooled arrangement. It was explained by officers that this could be a quick process, as a number of managers already used by funds were likely to be involved in pooled investments.

4. The Board was informed that each administering authority would have responsibility for undertaking its own actuarial evaluation. It was highlighted that this could lead to different funds in the pooled arrangement having differing actuarial assumptions.

5. The Board discussed the role of local pension boards, and member representatives in respect to pooled investment arrangements. The Board expressed a range of views, including some support for a non-voting observer, or a joint local pension board arrangement. It was noted that it was difficult to ensure a member representative would reflect the different demographics in the pooled arrangements. It was highlighted that Unison representatives across the 12 administering authorities were already meeting to discuss shared priorities and concerns. Other members of the Board reflected that there was benefit in ensuring appropriate communication flow between the different layers of governance. The Board expressed the view that it would require a more thorough options appraisal in order to come to a firm view.

Actions/ further information to be provided

None.

Recommendations:

That officers develop an options appraisal and analysis with respect to the governance of the pooled investment arrangements, covering the implications of the following:

·         Joint local pension board arrangements

·         Communication arrangements between local pension boards

·         Member representation at pool level

·         Formalised communications pathways between the different layers of governance; or

·         No change to the current governance arrangements.