Agenda and minutes

To undertake the roll call and receive any apologies for absence.

There were no apologies for absence.

To note the Terms of Reference and membership of the Board.

The Terms of Reference were noted.  There were no changes to membership to note.

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).

There were no disclosures of interest made on this occasion.

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

RESOLVED,     that the press and public be excluded from the meeting during consideration of:

Agenda Item No 10 – Review of Administration Matters;

Agenda Item No 11 – LPPA Presentation; and

Agenda Item No 12 – Verbal Update on Emerging Issues

by virtue of paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972 as the reports contain information relating to the financial or business affairs of any particular person (including the Authority holding that information).

To confirm as a correct record the minutes of the Cumbria Local Pension Board meeting held on 6 October 2020 (copy enclosed).

RESOLVED,     that the minutes of the previous meeting held on 6 October 2020 be agreed as a true and accurate record.

To note the Schedule of future meetings:-

30 March 2021 at 1pm - venue to be confirmed.

Members noted that the next scheduled meeting of the Cumbria LGPS Local Pension Board would take place as follows:-

·      30 March 2021 at 1pm – venue to be confirmed.

To consider a report from the Director of Finance (Section 151 Officer) (copy enclosed).

Members considered a report from the Director of Finance (Section 151 Officer) which updated them on all aspects of the governance and administration of the Local Government Pension Scheme (LGPS).

Section 4 of this report summarised the work conducted, and decisions made by the Committee at its meeting held on 18th December 2020, in order that Board Members can review these as part of their legal responsibility to members of the Fund.

This report also advised members of other matters arising, including regulatory changes, since last reported to the Board. 

The Technical Finance Officer took members through the report, and highlighted the following:-

·      Legal breaches – there had been no legal breaches during the period to September 2020.

·      Risk – there were two key changes to the risk register.  One risk was added to the register noting the risk to the Fund of legal challenge due to conflicting legislation following the implementation of Exit Payment Cap legislation on 4 November 2020, during the period until the current conflicting legislation is resolved.  In addition to the new risk the Technical Finance Officer informed members that one risk score related to the impact of COVID-19 on Pensions Administration had been reduced in recognition of the effective processes in place as evidenced by the positive performance LPPA had maintained over the past quarter and throughout 2020.

·      Investment Management - following a re-tender for the Fund’s custodian services and the appointment of Northern Trust, the full transfer from State Street Bank of the Fund’s custody assets, cash, accounting records and performance monitoring service took place successfully on 1 October 2020.  The performance monitoring report would be a new format provided by Northern Trust for the quarter to 31 December 2020.

·      The Pensions Regulator (tPR) Public Service Pension Schemes – Governance and Administration Survey 2019, published November 2020 - The responses covered 98% of LGPS schemes which related to 99.7% of Scheme membership. Results for the review of six key processes that tPR monitored as indicators of public service scheme performance were unchanged since 2018, aside from a decrease for risk management. Almost two-thirds (64%) of all public service schemes, including the Cumbria LGPS, had all six of the key processes in place, representing 71% of all membership. This was a reduction from 74% in 2018.  The survey concluded that changes to the wording of some questions in 2019 had resulted in the fall in some of the scores.

·      Fund Policies - In line with good practice BCPP had undertaken an annual review of its Responsible Investment Policy and Corporate Voting Guidelines. The outcome of this was that the underlying principles remained consistent with the Fund’s Investment Strategy Statement (ISS) and no material changes are expected to be required to the ISS in relation to the updated BCPP Policy and Guidelines. There were several minor amendments including additions and clarification of text. There were also a couple of more significant changes to highlight which reflected developments in some faster moving areas of  ...  view the full minutes text for item 45.

To consider a presentation from the Director of Finance (Section 151 Officer) (copy enclosed).

The Group Finance Manager - Pensions Investments and Insurance and the Operations Director Local Pension Partnership Administration (LPPA) guided the Committee through the presentation which covered the following:

·      Current LGPS Exit Payment and Compensation Regulations

·      Current LGPS Regulations

·      Exit Payment Cap

·      Impact on LGPS Scheme Members

·      The Exit Cap Conundrum

·      Waivers to the Exit Cap

·      Challenges to managing incompatible legislation

·      Support by other parties

·      Factors to consider

·      Mitigating the risk

·      Agreed action

·      LGPS Exit Payment Reforms

·      Proposed LGPS reforms

·      Proposed LGPS Regulations

·      Next steps

One of the members asked if there were likely to be any further claims made of age discrimination.  The Group Finance Manager said he felt this was unlikely but that time would tell.

The Operations Manager – LPPA informed members that there had been three applications for Judicial Review following publication of these regulations.  These would be heard in March 2021.

There had also been a number of cases put before the Pensions Ombudsman.  However, these would not be considered until the outcome of the review was known.

The Operations Director – LPPA then gave members a brief presentation with a summary of where LPPA was in terms of their readiness for dealing with the current situation and the reforms which were to come.  Her presentation covered the following:-

·      What have we done so far

·      Outstanding Issues

The Chair thanked the officers for their presentation.

To consider a report from the Director of Finance (Section 151 Officer) (copy enclosed).

A report was considered from the Director of Finance (S151 Officer) regarding the Public Sector Exit Payment Cap and the reform of Local Government Exit Pay. The report advised that on 4November 2020 the Restriction of Public Sector Exit Payments Regulations 2020 came into effect, placing a cap on the amount that public sector employers could pay for employees leaving employment (including through redundancy or business efficiency) to £95,000. 

The report provided details of the Exit Payment Cap legislation; the arrangements within the Fund to manage any cases arising due to the incompatible legislation; and proposed amendments to LGPS Regulations to comply with the Exit Payment Cap legislation and further reform exit payments.

The Group Finance Manager - Pensions, Investments and Insurance referred members back to his previous presentation, which covered most of this.

RESOLVED,     that the Board note this report.

To note that the next meeting will be held on 30 March 2021 at 1pm.

The next meeting will be held on 30 March 2021 at 1pm – venue to be confirmed.

To consider a report from the Director of Finance (Section 151 Officer) (copy enclosed).

Members considered a report from the Director of Finance (Section 151 Officer), which detailed the more specific items of note within the Local Pension Board arena and specific to Cumbria LGPS relating to Pensions’ Administration matters.

RESOLVED,     that the Board note the Pension Administration matters detailed in the report and request further information and/or feedback to the Pensions Committee as appropriate.

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

Members received a verbal update from Ms R Blundell, Operations Director - Local Pension Partnership Administration (LPPA).  The update included information on:-

·         Current working position

·         SLA Statistics

·         Surveys

·         Data Quality

·         Overpayments

·         Review of Systems

The Chair thanked the Operations Director for her comprehensive update.

To receive a general verbal update from the Director of Finance (Section 151 Officer).

The Senior Manager - Pensions and Financial Services updated the Board on current emerging issues, including:-

·      National Guidance for administering authorities on applying employer flexibilities to help manage employer risk.

·      LGPS Pooling