Agenda and minutes

Venue: Council Chamber, County Hall, Newport, Isle of Wight

Contact: Megan Tuckwell  Email: democratic.services@iow.gov.uk

Media

Items
No. Item

20.

Minutes pdf icon PDF 311 KB

To confirm as a true record the Minutes of the meeting held on 25 May 2022.

Minutes:

RESOLVED:

 

THAT the minutes of the meeting held on 25 May 2022 be approved.

 

21.

Declarations of Interest

To invite Members to declare any interest they might have in the matters on the agenda.

Minutes:

No declarations were received.

 

22.

Public Question Time - 15 Minutes Maximum

Questions may be asked without notice but to guarantee a full reply at the meeting, a question must be put including the name and address of the questioner by delivery in writing or by electronic mail to Democratic Services at democratic.services@iow.gov.uk, no later than two clear working days before the start of the meeting. Therefore the deadline for written questions will be Friday 22 July 2022.

 

Minutes:

No public questions were received.

 

23.

Pension Board Updates

To receive and note the following reports from the Local Pension Board:

23a

Minutes of the meeting held on 15 June 2022 (Draft) pdf icon PDF 254 KB

Minutes:

The committee received the draft minutes of the meeting of the Local Pension Board on 15 June 2022. The board chairman reported that the board had received a briefing on the valuation process, and that no concerns were raised.

 

RESOLVED:

 

THAT the minutes from the Local Pension Board be noted.

 

23b

Risk Register pdf icon PDF 318 KB

Additional documents:

Minutes:

The Pension Board reviewed the risk register at its meeting in June 2022 and it was confirmed that there had been no scoring changes since the last report of the Pension Fund Committee.It was stated that there were 9 risks rated red, with the key person risk having a very high-risk score. A discussion ensued regarding this issue and what steps could be taken to mitigate this risk. It was explained that the finance team resource restructure was complete, and that an independent review was being commissioned to determine the appropriate size and structure of the resource needed to operate the pension fund. At present, the greatest concern was that, outside the administration team, the fund was running on 1.2 FTES. Questions were raised about whether the Council was paying enough to attract the right calibre of people. It was explained that there were other issues linked to this problem as the Pension Fund recruitment was bound by the Council’s grading and evaluation pay scales and it was very difficult to fit pension fund staffing into the Council structure. It is hoped that the independent review would reflect on the broader national experience, and recommend changes to the staffing structure, with consideration of salary and recruitment issues. It was stated that the desired outcome of the review was to ensure that the operational structure was suitable for current requirements and to meet the future needs of the fund. Cyber risk was highlighted as an ongoing item of concern. In response it was stated that there would be training on this issue for both the Pension Board and the Pension Fund Committee members.

 

RESOLVED:

 

THAT the report from the Pensions Board on the updated risk register be noted.

 

24.

Legislation and Regulation Update

To receive a verbal update on current issues, including an update on government consultations.

Minutes:

The Pension Fund Manager provided a verbal update on current issues, including an update on Government consultations. It was advised that the DLUHC consultation was likely to be further delayed with changes in Government including the Minister responsible for LGPS. It was explained that it was likely to end up as a split consultation, with the TCFD/ climate related element being issued in the autumn, ahead of the main consultation, which would include pooling, levelling up, boycotts and governance. In respect of the levelling up agenda, confirmation had been received that the only compulsory requirement would be for the Pension Fund to publish of a plan on how it was going to arrive at the 5% local investment. It was confirmed that the 5% allocation could include existing assets. It was explained that the DLUHC response to its consultation on the McCloud remedy for the LGPS had now been delayed until the autumn. This was frustrating as any changes that needed to be implemented had to be in force by October 2023. The Pensions Manager reported that the fund was in a good position with its data collection for the McCloud project, with 90% of data collated and 80% of that data ready to be looked at. The Pensions Dashboards Programme was brought to the attention of the committee, with a local workshop for scheduled for 9 November which would set out the goals on standards, and how much progress had been made in achieving them.

 

RESOLVED:

 

THAT the update on Legislation and Regulation be noted

 

25.

Knowledge and Understanding Update pdf icon PDF 284 KB

To receive and note the update on training and development activities undertaken by committee members since the last meeting.

Additional documents:

Minutes:

The Pension Fund Manager presented the update on training and development activities undertaken by committee members since the last meeting. Members were reminded that, although there was no statutory obligation to complete training on the TPR modules, it was beneficial to do so, as it increased understanding of the fund and committee’s role within the governance structure. In addition to online learning, local development sessions were to take place. The Committee agreed to active participation in the Hymans Robertson National Knowledge Assessment 2022, which was likely to be launched in September. Pension Board members would also be expected to complete the assessment. The outcome from the activity would be a report on fund-level knowledge and understanding, benchmarked against other LGPS funds, as well as analysis to support the development of a local training plan. Discussion took place on whether Pension Fund Committee and Pension Board members should have an enhanced DBS check, but at present it remained optional.

 

RESOLVED:

 

i)               THAT the training offered be noted

 

ii)              THAT the Pension Fund Committee agree their active participation in the National Knowledge Assessment.

 

26.

Annual Report and Accounts 2021-22 (Draft)

To receive and note the draft pension fund accounts for 2021-22, and the external audit planning report for 2021-22 (as presented to the Audit Committee on 25 July 2022).

26a

Draft Pension Fund Accounts 2021-22 pdf icon PDF 293 KB

Additional documents:

Minutes:

The Pension Fund Manager presented the Draft Pension Fund Accounts for 2021-22. It was stated that the accounts were presented in statutory format, but there was still some missing information in the draft concerning disclosures on analysis of investments and risks. An updated draft had been provided to the Council for inclusion in the Council’s Draft Statement of Accounts which was to be published on the website by the end of July.

 

RESOLVED:

 

THAT the Draft Pension Fund Accounts for 2021-22 be noted

 

26b

External Audit Planning Report 2021-22 pdf icon PDF 4 MB

Minutes:

The committee considered the External Audit Planning Report for 2021-22, as presented to the Audit Committee on 25 July 2022. The Pension Fund Manager repeated the key points from the External Audit Planning Report that were highlighted to the Audit Committee in July. It was noted that the Pension Fund audit would not be completed in time to meet statutory publication deadlines. The resulting breach of the law had been brought to the attention of the necessary bodies. The External Auditors anticipate that the pension fund’s audit would be completed by March 2023. The ongoing impact of the late completion of the 2021-22 audit on future years was raised; it was explained that planning couldn’t start on the next audit until the current audit had been completed, so this was a significant concern.

 

RESOLVED:

 

THAT the External Audit Planning Report be noted.

 

27.

Triennial Valuation pdf icon PDF 320 KB

To receive and note the update on progress with the triennial valuation. 

Minutes:

The Pensions Manager presented the update on progress with the triennial valuation. It was stated that the full membership data for the Triennial Valuation had been submitted on the 20 July 2022, ahead of the deadline of 30 July 2022.

 

RESOLVED:

 

THAT the progress be noted.

 

28.

Investment Performance and Funding Level pdf icon PDF 161 KB

To receive and note the reports from the fund’s investment consultants; including a summary of the investment assets (at 30 June 2022), and a summary overview of investment market performance for the quarter ended 30 June 2022. An update on the fund’s actual performance for the quarter will be provided at the meeting.

Additional documents:

Minutes:

The investment consultant from Hymans Robertson gave an overview from the fund’s investment consultants which included a summary of the investment market performance for the quarter ending 30 June 2022. It was explained that the markets across equities and bonds were extremely volatile and that there were high levels of inflation coupled with supply chain disruption, high energy prices and the cost of living crisis. There was a lot of nervousness in the market particularly concerning the huge surge in energy prices. The US had increased their interest rates before the UK which had impacted on the value of Sterling. Due to the overall market experience, the fund’s investment assets had reduced in value by £49.3m (about 6.8%) in the quarter to 30 June 2022. The valuation of assets had fallen but importantly, the fall in liabilities was greater than the fall in assets. Questions were asked about Majedie’s performance and it was advised that Majedie had persistently underperformed not just in investment  management, but also on other indicators, to the extent that it was quite unlike the firm first appointed by the Pension Fund.

 

RESOLVED:

 

THAT the update given by the Investment Consultants on the Fund’s investment performance be noted.

 

29.

Items circulated for Members Attention

To note items circulated to committee members since the papers were published for last committee meeting, for information:

a)    Sent 01-Jun-22: Hymans Robertson Webinar Invite: Setting your Funding Strategy at the 2022 Valuation (20 June)

b)    Sent 20-Jun-22: Invitation: APPG for Local Authority Pension Funds - Levelling Up and Local Authority Pension Funds(13 July)

c)    Sent 20-Jun-22: Invitation - Joint Paris Alignment Forum and Place-Based Impact Investing Forum online afternoon tea with SilverStreet Capital (18 July)

d)    Sent 20-Jun-22: Scheme Advisory Board annual report 2021

e)    Sent 20-Jun-22: Hymans Robertson Conference Highlights - PLSA Local Authority Conference 2022

f)      Sent 21-Jun-22: Hymans Robertson: June issue of The Edit

g)    Sent 21-Jun-22: internal development session invitation: investment strategy (14 September)

h)    Sent 23-Jun-22: Economic and interest rate forecast June 2022

i)      Sent 05-Jul-22: knowledge and understanding update – request for action and information

j)      Sent 07-Jul-22: LGPS Bulletin 226

k)    Sent 07-Jul-22: Hymans Robertson: July issue of The Edit

Minutes:

The committee noted the items circulated for information since the last meeting. No questions were raised at this stage.

 

RESOLVED:

 

THAT the items circulated for attention be noted.

 

30.

Workplan 2022-23 pdf icon PDF 400 KB

To receive and note the workplan for the pension fund committee and local pension board for the 2022-23 financial year.

Minutes:

To receive and note the workplan for the Isle of Wight Pension Fund Committee and Local Pension Board for the 2022-23 financial year. It was affirmed that Full Council had nominated Cllr Churchman to attend JC meetings, and there was a new development session on 9 November 2022

covering the Pensions Dashboard project.

 

RESOLVED:

 

THAT the workplan be noted.

 

31.

Members' Question Time

A question may be asked at the meeting without prior notice but in these circumstances there is no guarantee that a full reply will be given at the meeting. To guarantee a reply, a question must be submitted in writing or by email to democratic.services@iow.gov.uk no later than 10.00am, Monday 25 July 2022.

Minutes:

No member’s questions were received.

 

32.

Exclusion of Public and Press

To consider passing a resolution that, under Section 100(A)(4) of the Local Government Act 1972, the public and press be excluded from the meeting for the following item of business, namely agenda item(s) 14 to 17 on the grounds that there is likely to be disclosure of exempt information as defined in paragraphs 3 of Part 1 of Schedule 12A of the Act and in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Minutes:

RESOLVED:

 

THAT the public and press be excluded.

 

33.

UK Equity Allocation

To receive a confidential report from the investment consultants following their due diligence work on the LF ACCESS UK Select Fund (Black Rock).

Minutes:

The investment consultant from Hymans Robertson presented their report on options for the fund’s UK equity allocation, and highlighted areas for the committee to focus on during the alternative fund manager’s presentation.

 

RESOLVED:

 

THAT the committee note the comments on the UK Equity Allocation portfolio and discuss on how they wish to proceed regarding the Access Pool fund management.

 

34.

Fund Manager Presentation

To receive a presentation from Black Rock on the LF ACCESS UK Select Fund. 

Minutes:

The committee received a confidential presentation from Black Rock on the LF ACCESS UK Select Fund. The presentation focused on their experience with the LGPS, their process for embedding ESG consideration in their investment decisions, and how they engaged with the companies in which they invest.

 

RESOLVED:

 

i)               THAT the committee note the representation from Black Rock.

 

ii)              THAT further investigations be undertaken before any decision to change in investment manager is made.

 

35.

ACCESS Update pdf icon PDF 295 KB

To receive and note an update on activity with the ACCESS pool since the last meeting.

Additional documents:

Minutes:

The Pension Fund Manager presented the report on recent ACCESS pool activities since the last meeting.

 

RESOLVED:

 

THAT the ACCESS update be noted.

 

36.

Procurement / Contract Management Update

To receive and note an update on procurement and contract management activity since the last meeting.

Additional documents:

Minutes:

The Pension Fund Manager presented the confidential update on procurement and contract management activities since the last meeting.

 

RESOLVED:

 

THAT the Procurement and Contract Management update be noted.