Agenda item

As part of the governance and oversight of the Pension Fund, a regular review and update to the governance framework, policies and procedures is essential to ensure that the Fund is compliant with latest legislation, regulations and good practice.

At its meeting of 14 September 2018, the Pension Fund Committee agreed to commission a review of the fund governance. This was carried out by Hymans Robertson.

This report provides details of this review, which includes the definition of a mission statement for the Fund and key strategic objectives in investments, funding, governance and delivery.

Witnesses:

Neil Mason, Strategic Finance Manager (Pensions)

Ian Colvin, Hymans Robertson

Key points raised during the discussion:

1.    The representative from Hymans Robertson introduced the report and ran the Committee through its main points. He explained that the governance arrangements of the Fund were strong, with experienced and engaged members and officers committed to driving things forward, but that there were still steps that could be taken to further improve governance.

2.    The Committee heard that one of the key goals of the governance review was to produce a mission statement that would boil down the Fund’s objectives to a core philosophy. The proposed statement tried to capture what shone through from the previous discussions that were had and the work that Hymans Robertson had undertaken.

3.    The representative from Hymans Robertson explained that the nine recommendations for the Fund were outlined on page 252 of the report and that these had been linked to the outlined business plan. He went on to tell the Committee that the Fund had in place all the mandatory policies but some needed to be refreshed and revisited to make sure it had adequate oversight.

4.    The Strategic Finance Manager discussed the diagram on page 230 and informed the Committee that it outlined four clear, stakeholder-led objectives that informed the business plan. This would act as a representation of the way in which the Committee wanted to see the Fund operate.

5.    A discussion was had about the mission statement, with Members approving its overall message but suggesting changes to the wording used. The following suggestions were put forward:

·         A stronger word than “strives” needed to be used, as it was an implicit admission that the Fund would like to achieve the outlined goals but were not doing so.

·         The phrase “by creating” indicated that the “strong partnerships” mentioned by the mission statement were not yet established.

·         It would be better to refer to “ESG considerations” rather than “ESG factors”.

·         “Risk management” needed to be moved to start of the final sentence.

·         “LGPS” and “ESG” should be referred to in full rather than through the use of acronyms.

·         There was a discussion around whether “ESG factors are fundamental to our approach” should be reworded to “ESG factors are fundamental to our approach to investment”.

6.    Discussion turned to the delivery objectives detailed on page 229, with a Member of the Committee questioning how these were measured. In response, the representative from Hymans Robertson said that this would take place through member surveys, workshops and any comments submitted to the Surrey Local Pension Board.

Actions/further information to be provided:

The Strategic Finance Manager is to circulate the reworded version of the mission statement to the Committee for approval.

Resolved:

The Committee:

1.    Noted the governance report and recommendations from Hymans Robertson and agreed that the recommendations are included in the 2019/20 Business Plan.

2.    Approved the mission statement for the Fund subject to rewording and subsequent sign off.

3.    Approved the objectives for the Fund with regards to investments, funding, governance and delivery.

4.    Approved the 2019/20 Business Plan.