Agenda and minutes

To confirm the Minutes of the meeting held on 2 September 2020.

RESOLVED:

THAT the Minutes of the meeting held on 2 September 2020 be confirmed.

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

No new declarations were received at this stage.

Questions must be delivered in writing or by electronic mail to democratic.services@iow.gov.uk no later than 10.30am on Monday 26 October  2020. Each question must give the name and address of the questioner.

No public questions were received.

To receive the Governance Compliance Statement for the year ended 31 March 2020, including a comparison of compliance with the previous report, and to adopt  the statement, on recommendation from the Isle of Wight Pension Board.

The Technical Finance Manager presented the Governance Compliance Statement for the year ended 31 March 2020, which included a comparison of compliance with previous reports. The committee were asked to adopt the statement on recommendation from the Isle of Wight Pension Board. It was advised that the overall level of compliance with governance standards had improved, with the fund deemed to be 60% fully compliant, and 36% partially compliant,  against the required standards of the criteria assessed. Members acknowledged the work undertaken by officers to achieve this.

The Committee recognised that the fund was non-compliant in three of the criteria assessed, being; the lack of a formal induction programme, the absence of a specific learning and development policy, and the failure to maintain a formal risk register. Members wished to actively support officers in working towards full compliance, and concerns were raised regarding resources, officer capacity and support for the Technical Finance Manager. Members requested that the officer with the statutory responsibility to ensure the Fund was appropriately governed and administered come before the Committee to explain the extent to which they had assessed officer capacity to ensure full compliance. This view was supported by members of Committee and members of the Isle of Wight Pension Board.

RESOLVED:

i)               THAT the Governance Compliance Statement for the year ended 31 March 2020 be approved; and its publication within the Fund’s annual report and accounts and on the Fund’s web pages be authorised.

ii)              THAT, with the aim of ensuring full compliance, the Director of Finance and Section 151 Officer be requested to attend the meeting of the Committee to be held on 25 November 2020 to explain the extent to which officer capacity had been assessed.

To approve the pension fund annual report and accounts for the year ended 31 March 2020, subject to final audit.

The Technical Finance Manager presented the Fund’s annual report and accounts for the year ended 31 March 2020. It was advised that by approving the Fund’s annual report and accounts, subject to the completion of the external audit process, the Committee ensures that the statutory publication timetable can be adhered to.

Discussion took place regarding financial assumptions, flexible retirement, and premises expenses. Questions were raised regarding the Newport Harbour accounts and the Chairman of the Audit Committee agreed to seek clarification around why those accounts had been objected to. It was confirmed that the pension fund accounts would form part of the accounts of the Isle of Wight Council which were due to be presented to the Audit Committee for approval on 23 November 2020.

RESOLVED:

i)               THAT subject to the completion of the external audit, the pension fund accounts for the year ended 31 March 2020 be approved for inclusion in the Isle of Wight Council statement of accounts.

ii)              THAT subject to the completion of the external audit, the pension fund’s annual report and accounts for the year ended 31 March 2020 be approved for publication on the fund’s website.

To receive a report on the fund’s investment portfolio performance for the quarter ended 30 September 2020, including the outcome of rebalancing activity undertaken in the quarter, and the indicative funding levels at that date.

The Investment Consultant of Hymans Robertson presented the report on the fund’s investment portfolio performance for the quarter ended 30 September 2020, including the outcome of rebalancing activity undertaken in the quarter, and the indicative funding levels at that date. Members received an update on the outcome of the rebalancing transaction undertaken on 24 September 2020, moving £13 million from the fund’s global equity allocation within the ACCESS pool into the directly held Schroder bond portfolio. Discussion took place regarding the Fund’s property portfolio and it was advised that Schroders would attend the next meeting of the Committee to discuss this matter further.

RESOLVED:

THAT the update be noted.

To agree the process for the procurement, selection of investment solutions, and appointment of appropriate fund managers to deliver the new asset classes of private debt and infrastructure within the fund’s strategic asset allocation.

The Technical Finance Manager presented the report which set out the process for the procurement, the selection of investment solutions, and the appointment of appropriate fund managers to deliver the new asset classes of private debt and infrastructure within the fund’s strategic asset allocation.

Emphasis was placed on selection panels due to take place on the 6 November 2020 and 4 December 2020, where the panel would receive presentations from each private debt manager on their proposed investment solution and, following interview, make a final selection. It was confirmed that the panels would be supported by Hymans Robertson Investment Consultants in addition to the Director of Finance and Section 151 Officer, the Technical Finance Manager, and the Pension Fund & Treasury Management Accountant. Due to the importance of this process members were strongly encouraged to confirm their attendance in order for arrangements to be finalised.

RESOLVED:

THAT the process and timetable for the procurement, selection, and appointment, of fund managers to deliver the selected investment solutions for private debt and infrastructure, be agreed.

To note items circulated to committee members since the papers were published for last committee meeting (19 August 2020), for information:

a)    Sent 02-Sep-20: Slides and recording from development session

b)    Sent 04-Sep-20: Hymans Robertson: Current issues in the LGPS Sept 20.

c)    Sent 04-Sep-20: Barnett Waddingham: Pension news in the Public Sector.

d)    Sent 09-Sep-20: IWCPF draft response to MHCLG McCloud remedy consultation.

e)    Sent 16-Sep-20: Governance compliance statement 2019-20: maintaining contributions.

f)      Sent 16-Sep-20: LGA Fundamentals Zoom webinar invitations.

g)    Sent 17-Sep-20: Governance compliance statement 2019-20: scheme record keeping.

h)    Sent 24-Sep-20: Investment manager selection day 6 November 2020.

i)      Sent 25-Sep-20: slides from pension board development session on 23 September.

j)      Sent 25-Sep-20: ACCESS joint committee dates, request for volunteers.

k)    Sent 28-Sep-20: 2019-20 Knowledge and skills framework compliance statement

l)      Sent 01-Oct-20: Investment manager selection second day 4 December 2020

m)  Sent 07-Oct-20: Governance compliance statement 2019-20: managing risks and internal controls.

n)    Sent 08-Oct-20: Governance compliance statement 2019-20: reporting breaches.

o)    Sent 08-Oct-20: Governance compliance statement 2019-20: internal dispute resolution procedure.

p)    Sent 08-Oct-20: Hymans Robertson – Current issues in the LGPS Oct 2020.

q)    Sent 08-Oct-20: Governance compliance statement 2019-20: general requirements.

r)     Sent 09-Oct-20: clarification of governance requirements (response to item (m)).

s)    Sent 12-Oct-20: LGPC Bulletin 202.

t)      Sent 15-Oct-20: Exit cap regulations signed - £95k cap effective from 4 November.

The committee noted the items circulated for information since papers were published for last committee meeting on 19 August 2020. Attention was drawn to the upcoming ACCESS Joint Committee dates which were circulated on 25 September 2020. Members were invited to identify the dates which they could attend and notify the Chairman and Technical Finance Manager in order for arrangements to be finalised. Discussion took place regarding exit cap regulations and was confirmed that the Technical Finance Manager would provide a written update to the next meeting.

RESOLVED:

THAT the items circulated for member’s attention be noted.

A question must be submitted in writing or by electronic mail to Democratic Services no later than 10.30am on Tuesday 27 October 2020.

No member’s questions were received.

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 items 11 and 12 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.

RESOLVED:

THAT the public and press be excluded.

To receive a confidential report from Hymans Robertson setting out their recommendations of the shortlisted investment solutions for private debt and infrastructure asset classes.

The Committee were reminded that at its meeting in July 2020, it was agreed that the Fund should seek to make new 5% allocations to both Infrastructure and Private Debt as part of a new strategic allocation to Income focussed mandates. Members received and discussed a confidential report from Hymans Robertson, setting out their recommendations of the shortlisted investment solutions for private debt and infrastructure asset classes. It was agreed that Hymans Robertson would review the proposed selection questions and would issue a revised selection panel pack for members in the early part of the following week, before the first selection day.

RESOLVED:

THAT the proposed manager shortlists, the Selection Panel interview process and key the dates for the selection process, be noted and agreed.

To receive a confidential update on recent ACCESS activities.

The Technical Finance Manager presented the confidential report which provided an update on recent ACCESS activities. Due to time constraints, no comments were made at this stage and the report was noted. Members were asked to contact the Technical Finance Manager is they had any detailed questions about the report.

RESOLVED:

THAT the update be noted.