Agenda and draft minutes

Cumbria LGPS Local Pension Board
Thursday, 31st January, 2019 1.00 pm

Venue: Conference Room A, Cumbria House, Carlisle

Contact: Shamim Lindsay  Email: shamim.lindsay@cumbria.gov.uk

Items
No. Item

23.

Apologies for Absence

To receive any apologies for absence.

 

Minutes:

Apologies for absence were received from Ms K Powell - Other Employer representative and Councillor Barbara Cannon - District Councils representative.

 

24.

Terms of Reference and Membership pdf icon PDF 124 KB

To note the terms of reference of the Board as amended by the Council on 10 January 2019.

 

Minutes:

The Board were updated on the revisions regarding Substitutes, as during the review process, before being presented to Council, further revisions were made.  The revised Terms of Reference state “Substitutes are permitted and sufficient substitutes will be appointed to ensure that the representation described in 7.2 can be maintained whenever a substitution is required.”

 

The Terms of Reference and Membership of the Board as amended by the Council on 10 January 2019 were noted.

 

 

25.

Disclosures of Interest

Members are invited to disclose any disclosable pecuniary interest they have in any item on the agenda which comprises

 

1          Details of any employment, office, trade, profession or vocation carried on for       profit or gain.

 

2          Details of any payment or provision of any other financial benefit (other than from the authority) made or provided within the relevant period in respect of any expenses incurred by you in carrying out duties as a member, or towards your election expenses.  (This includes any payment or financial benefit from a trade union within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992.

 

3          Details of any contract which is made between you (or a body in which you have a beneficial interest) and the authority

 

(a)       Under which goods or services are to be provided or works are to be           executed; and

 

            (b)       Which has not been fully discharged.

 

4          Details of any beneficial interest in land which is within the area of the authority. 

 

5          Details of any licence (alone or jointly with others) to occupy land in the area of the authority for a month or longer. 

 

6          Details of any tenancy where (to your knowledge)

 

            (a)       The landlord is the authority; and

 

            (b)       The tenant is a body in which you have a beneficial                                                   interest.

 

7          Details of any beneficial interest in securities of a body where

 

(a)       That body (to your knowledge) has a place of business or land in the         area of the authority; and

 

 

(b)       Either –

 

(i)      The total nominal value of the securities exceeds £25,000 or one       hundredth of the total issued share capital of that body; or

 

(ii)     If that share capital of that body is of more than one class, the total nominal value of the shares of any one class in which the relevant person has a beneficial interest exceeds one hundredth of the total issued share capital of that class.

In addition, you must also disclose other non-pecuniary interests set out in the Code of Conduct where these have not already been registered.

 

Note

 

A “disclosable pecuniary interest” is an interest of a councillor or their partner (which means spouse or civil partner, a person with whom they are living as husband or wife, or a person with whom they are living as if they are civil partners).

 

Minutes:

There were no disclosures of interests.

 

The Chair welcomed Rachel Blundell (Head of Administration Services, YPS) and formally invited her to stay for the full meeting, including Part 2 items.

 

26.

Exclusion of Press and Public

To consider whether there are any items on the agenda for which the press and public should be excluded.

 

Minutes:

RESOLVED that, the press and public be excluded from the meeting during consideration of  Agenda item No 11 - Review of Pension Administration Matters for the Period, and Agenda item No 12 - Consultation on Draft Statutory Guidance on Asset Pooling on the grounds that they contained exempt information as defined under paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972 (as amended) relating to the financial or business affairs of particular individuals:

 

27.

Minutes pdf icon PDF 86 KB

To confirm as a correct record the minutes of the Cumbria Local Pension Board meeting held on  8 October 2018. (Copy enclosed)

 

Minutes:

RESOLVED that,     the Minutes of the meeting held on 8 October 2018 be confirmed as a correct record.

 

28.

Schedule of Future Meetings pdf icon PDF 30 KB

To note the Schedule of Future Meetings of the Board up to 31 March 2020.

(Copy enclosed)

 

 

Minutes:

The Schedule of future meetings of the Board was noted.  The meetings would take place as follows:-

 

8 April 2019

4 July 2019

8 October 2019

17 January 2020

 

All meetings would take place at Cumbria House, Botchergate, Carlisle, at 1pm

 

The Chair requested that Outlook calendar diary entries be circulated to Board Members (Action: Democratic Services).

 

29.

Review of Pension Committee Decisions and Other Matters pdf icon PDF 131 KB

To receive a report of the Director of Finance.

(Copy enclosed)

Additional documents:

Minutes:

A report was considered from the Director of Finance (Section 151 Officer) regarding a review of the Pension Committee’s decisions and other matters for consideration during the period. The report summarised the work of the Pensions Committee at its meeting on 10th December 2018 in order that the Board members could review them as part of their legal responsibility to members of the Cumbria LGPS. The report also advised Members on other matters arising during the period, for consideration.

 

It was noted that all Pensions Committee papers were published on the Council’s website and a dedicated SharePoint site gave members the opportunity to view Pension Committee papers in advance of meetings.

 

The Board was briefed that there had been no legal breaches during the period; the risk register had been reviewed in detail and would be presented as a separate agenda item; the Chair and an officer had attended a meeting of the Northumberland Local Pension Board in December, and would provide a verbal update at agenda item 13 and the next Board meeting on 8 April would incorporate a workshop facilitated by Neil Sellstrom from CIPFA to consider in more detail the CIPFA Guide for Local Pension Boards.

 

Members were also informed that the Ministry of Housing, Communities and Local Government (MHCLG) had drafted new statutory guidance on asset pooling, and this would be considered at item 12 on the agenda. 

 

It was agreed that Board Members would receive Outlook calendar invitations to future Pension Committee meetings, to assist with planning.

 

RESOLVED that,     the decisions approved and other matters considered by the Pension Committee at the meeting on 10 December 2018 be noted.

 

30.

Cumbria Pension Fund Risk Register pdf icon PDF 94 KB

To receive a report of the Director of Finance.

(Copy enclosed)

Additional documents:

Minutes:

A report was considered from the Director of Finance (Section 151 Officer) regarding a Review of the Cumbria Pension Fund and Local Pension Board Risk Register.

 

Following work undertaken by the Board at their last meeting in October, the Fund’s risk register was refreshed with consideration being given to those risks that were most critical to the Fund.  Members were informed that the number of risks had been reduced from 22 to 15; nine risks from the former register had been consolidated into four; four risks removed and two new risks added.  In addition the score attributed to the potential impact and the likelihood of a risk arising had been reviewed, and target scores introduced.

 

A key risk (the only red risk) related to information security arrangements and the risk of cyber-crime which had been consolidated into one overarching risk that ensured consistency with the Council’s corporate risk register.

 

New risks introduced relate to the Timeliness of Breach Reporting, as any delay may lead to difficulties resolving matters and could in itself constitute a breach; and Regulatory Changes, as monitoring any potential changes in government policy or amendments to regulations assists with the good management of the scheme.  Being aware of and ready to respond to any changes and feed in to consultations allowed both involvement in decision making and time to develop any appropriate plans to mitigate any risks to the Fund.

 

It was suggested that officers consider a potential risk regarding the complexity of the admission process re: scheme employers.

 

Members praised the revised register as a ‘much improved document’ which was clear, and easy to read and understand.

 

RESOLVED that,     the revisions to the risk register of the Fund and the controls in place to mitigate Fund risks be noted.

 

31.

Compliance with Pension Regulator's Code of Practice No. 14 pdf icon PDF 117 KB

To receive a report of the Director of Finance.

(Copy enclosed)

Additional documents:

Minutes:

A report was considered from the Director of Finance (Section 151 Officer) regarding Compliance with the Pension Regulator’s Code of Practice No. 14, which set out the requirements and expected standards for the governance associated with the administration of public sector pension schemes.

 

It was explained that Codes of Practice were not statutory, but were regulatory tools containing practical guidance on the requirements of pension legislation setting out standards of conduct and expectations. Compliance could provide additional assurances to both the Regulator and members of the Cumbria LGPS that effective processes were in place regarding administration of the Fund.

 

The Fund had undertaken a comprehensive review of the Code and concluded that, whilst the Fund was fully compliant, there were two areas where improvements could be made, by documenting processes related to internal controls and how contributions payable to the Fund were monitored.  These would be addressed during Q4 of 2018/19 and the Board would be advised when complete.

 

The possibility of scheduling in a potential Internal Audit review of Compliance with Code of Practice No.14, at a future date (3-4 years) was discussed.

 

Board Members expressed that they found it reassuring that officers are identifying and dealing with issues.

 

RESOLVED that,     the Review of Compliance with the Pension Regulator’s Code of Practice No.14 be noted.

 

32.

Data Review and Data Improvement Plan pdf icon PDF 173 KB

To receive a report of the Director of Finance.

(Copy enclosed)

Minutes:

A report was considered from the Director of Finance (Section 151 Officer) regarding a Cumbria LGPS data review and data improvement plan.

 

Whilst it was considered that the Fund’s data was of a good standard, maintaining a data improvement plan and continually striving to improve data quality was considered to be good practice.

 

Your Pension Service (YPS) carried out a review of data in October 2018 specifically looking at items that the Pensions Regulator refers to as ‘common and specific data’ and this assessment indicated over 99% was present and accurate.

 

In July 2018 the Board was informed of the Fund’s commitment to improving pending leaver information, setting an ambitious target of a 70% reduction in pending leavers by 31 March 2019.  In the six months to 31 December 2018 there had been a reduction of 53%, and a further update would be provided in April.  

 

The main factor contributing to missing ‘common data’ relates to the Fund not having an accurate address for scheme members, particularly for deferred members.  The Fund would be employing a data tracing agency to attempt to verify the correct addresses of all deferred members, and all active members and pensioners who are known to have incorrect addresses.  The Fund had set a target of reducing the number of scheme members with missing addresses by 80% before 31 March 2019.  It was agreed that officers would write to scheme employers to inform them about this data tracing exercise, and that YPS would ensure their team were fully aware should there be any queries.

 

An exercise was currently underway to review all standard correspondence sent to scheme members from YPS.  An update would be given to the Board at its next meeting in April.

 

RESOLVED that,     the findings of the data quality review be noted and the ongoing implementation of the data quality improvement plan be supported.

 

33.

Review of Pension Administration Matters

To receive a report of the Director of Finance.

(Copy enclosed)

Additional documents:

Minutes:

Members received an update on:

 

·      The service provided and monitoring of Your Pension Service (YPS).  They were informed of a dip in performance since YPS restructured its administrative functions in April 2018.  Officers are closely monitoring adherence to the recovery plan.   The quarter to 30th September 2018 has seen an improvement in performance, with a further update to be provided by YPS in their presentation at agenda item 14.

·      Guaranteed Minimum Pension (GMP) Reconciliation.

·      Employer Issues and measures taken to mitigate them.

·      Fund Discretions - six were exercised in the quarter.  Amendments to the current Discretions Policy were approved by the S151 Officer in consultation with the Chair of the Pension Committee in October 2018.

·      Administration Strategy & Communications Policy - a copy of the revised document was presented, with no fundamental changes, but some minor presentational amendments.

·      Legal Breach - there were no legal breaches.

·      Pension Ombudsman Opinions - none issued during the period.

 

The Board were informed at their last meeting that the Fund had been selected as one of approximately ten LGPS Funds to be reviewed by the Pensions Regulator as part of their planned cohort review of the LGPS. There had been four meetings to date, which were productive, and the Board would be kept advised of progress with this review and the findings of the Regulator at future meetings.

 

RESOLVED that,     the Pensions Administration matters detailed in the report be noted.

 

 

34.

Consultation on Draft Statutory Guidance on Asset Pooling

To receive a report from the Director of Finance.

(Copy enclosed)

Additional documents:

Minutes:

A report was considered from the Director of Finance (Section 151 Officer) regarding a consultation on draft statutory guidance on asset pooling issued in January 2019.

 

The draft statutory guidance would determine the direction of travel for the ongoing pooling of LGPS assets.  As pooling had a direct impact on cost control and performance of Funds, and these directly impacted the funding level and employer contribution rates then the statutory guidance needed to be appropriate, proportionate and would assist with achieving efficiency without impeding authorities in fulfilling their fiduciary duties.

 

In recognition of the potential impact of the statutory guidance on Cumbria LGPS (the Fund) and the pool, it was proposed that the Fund responded to the consultation.  The consultation would close on 28 March.

 

This report details the potential implications to Cumbria of the draft statutory guidance along with draft comments to be included in the response.  The response would also be considered by the Pension Committee in March.

 

RESOLVED that,     the draft statutory guidance was considered and the proposed draft response agreed for consideration by the Pensions Committee in March.

 

 

35.

Verbal Report on Visit to a Northumberland Local Pension Board Meeting

To receive a verbal update from the Director of Finance.

Minutes:

Members received a verbal update from Gill Welbourn and the Chair, Deirdre Burnet on their attendance at the Northumberland Local Pension Board meeting in December 2018.

 

They found attendance interesting and informative.  Although their governance structures differed they came away with useful points which may be used to further enhance the operation of the Cumbria Board going forward.

 

36.

Your Pension Service Presentation

Rachel Blundell, Deputy Director – Member Operations, Local Pensions Partnership has been invited to make a presentation to the Board.

Minutes:

Members received a verbal update from Rachel Blundell, Deputy Director, Member Operations at YPS. This included information on personnel, reorganisation in the service, roles and responsibilities of staff, performance, issues arising and the future for YPS. Ms Blundell indicated that provisional performance figures show that YPS is on track to achieve the previous performance level of 98% by January 2019.

 

Members appreciated the content of the presentation, and indicated they would welcome a further presentation from YPS at a future meeting.