Agenda and minutes

Cumbria Fire Local Pension Board
Tuesday, 23rd April, 2019 1.00 pm

Venue: Chairman's Room, Cumbria House, Botchergate, Carlisle CA1 1RD

Contact: Jackie Currie  Email: jackie.currie@cumbria.gov.uk

Items
No. Item

1.

APOLOGIES FOR ABSENCE

To receive any apologies for absence.

Minutes:

An apology for absence was received from Mrs J Willis.

 

2.

MEMBERSHIP AND TERMS OF REFERENCE pdf icon PDF 184 KB

To note the membership and revised Terms of Reference for the Board, approved by County Council on 10 January 2019 (copy enclosed)

Minutes:

RESOLVED that the revised terms of reference and membership be noted.

 

3.

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 interest made on this occasion.

 

4.

EXCLUSION OF PRESS AND PUBLIC

To consider whether the press and public should be excluded from the meeting during consideration of any items on the agenda.

Minutes:

RESOLVED      that the press and public be not excluded from the meeting during any items of business on the agenda today.

 

5.

MINUTES pdf icon PDF 189 KB

To receive the minutes of the previous meeting held on 14 January 2019 (copy enclosed)

Minutes:

RESOLVED      that the minutes of the meeting held on 14 January 2019 be agreed.

 

6.

SCHEDULE OF MEETINGS pdf icon PDF 9 KB

To note that future meetings would take place as follows:-

 

16 July 2019 at 1pm at Cumbria House

22 October 2019 at 1pm at Cumbria House

4 February 2020 at 1pm at Cumbria House

 

Minutes:

It was noted that the next 3 meetings of the Board would take place as follows:-

 

·         16 July 2019

·         22 October 2019

·         4 February 2020

 

The Board discussed the possible locations for holding future meetings and requested that the meetings be scheduled to move around the county, and if possible, for these meetings to be held in Cumbria Fire and Rescue Services premises (Action: Dem Services).

 

 

7.

MONITORING REPORT FOR THE PERIOD ENDING 31 DECEMBER 2018 RISK REGISTER UPDATE pdf icon PDF 190 KB

To consider a report from the Director of Finance (s151 Officer) (copy enclosed)

 

Additional documents:

Minutes:

The Committee considered a report from the Director of Finance (Section 151 Officer), which advised members of any material risk management, policy or governance issues and national regulatory changes to 31 March 2019 and any performance monitoring issues of the Scheme to 31 December 2018.

 

With reference to risk management the Senior Manager – Pensions and Financial Services reported that whilst, there had been a number of developments during the quarter that had led to amendments to the comments associated with some of the risks on the register, there were no proposed amendments to the scores associated with the impact or likelihood of the risks occurring.

 

The current risk register had 12 risks comprising 1 red risk (information security arrangements); 2 amber risks (pension administration processes and timeliness of managing a breach); and 9 green risks.

 

Although there had been no proposed amendments to the scores associated with the impact or likelihood of the risks occurring, there had been amendments to the comments associated with some of the risks, reflecting any developments in the quarter.

 

The Chair commented that with reference to the reported risks he would prefer to receive more information on actions being taken to mitigate risks and asked whether the Corporate Risk Officer considered the target score for 1.1 Information Security Arrangements as realistic.  The Senior Manager noted this and would keep this under review and AGREED to speak to the Risk Officer about this.

  

The Senior Manager reminded members that, as reported to the Board at the January meeting, the draft results of the 2016 valuation showed that the employer cost (as measured by the cost cap mechanism) had fallen to 11.6%.  This meant that the cost cap floor had been breached (i.e. costs were more than 2% lower than the 16.8% of pensionable earnings cost target set out in the 2015 firefighter scheme regulations).  As such, action must be taken (e.g. improving member benefits) to bring the cost back up to within the target cost range.

 

It was also explained that the employer cost as per the cost cap mechanism was calculated on a different basis to employer contribution rates.  Employer contribution rates also took into account the SCAPE (Superannuation Contributions Adjusted for Past Experience) discount rate.  This had reduced (from 2.8% to 2.4%) and this change significantly increased the cost of all three firefighter’s pension schemes to employers.

 

In December 2018 the Court of Appeal ruled that changes made to pension schemes discriminated against a group of firefighters and a group of judges on the grounds of age. The ruling was issued following the consideration of two cases (Sargeant and McCloud) relating to ‘transitional protections’ in public service pension schemes which applied on the introduction of new career average public sector pension schemes in 2015. 

 

The Government had since sought to appeal this decision.  In recognition that the outcome of this appeal could have a significant impact on the costs of the scheme (and therefore the cost cap calculation) HM Treasury had since issued  ...  view the full minutes text for item 7.

8.

FIRE LOCAL PENSIONS BOARD TRAINING POLICY AND PLAN pdf icon PDF 228 KB

To consider a report from the Director of Finance (s151 Officer) (copy enclosed)

 

Additional documents:

Minutes:

Members had before them a report from the Director of Finance (Section 151 Officer), which advised that it was a legal requirement (per The Pensions Act 2004) that every individual who was a member of a Local Pension Board must meet specific knowledge and understanding obligations, therefore appropriate training should be provided to Fire Local Pension Board members to assist them in undertaking their role and to support members in carrying out that training.

 

This paper set out the requirements placed on each individual and the approach proposed to ensure compliance with the requirements.

 

Members noted that in March 2019 a training needs assessment questionnaire was sent to all members of the Board.  The completed responses had been collated and assessed and the proposed training plan reflected training needs identified by the questionnaires.

 

In addition to addressing knowledge gaps identified from the training needs assessment questionnaires, the plan took account of up and coming national legislative/policy changes, ongoing work specific to Firefighters Pension Schemes.

 

RESOLVED that, the Board adopt the Cumbria Fire Local Pension Board Training Policy, and approve the specific training plan for 2019/20.

 

 

9.

FIRE PENSIONS SERVICE COMPLIANCE WITH CODE 14 pdf icon PDF 268 KB

To consider a report from the Director of Finance (s151 Officer) (copy enclosed)

 

Additional documents:

Minutes:

The Fire Local Pensions Board considered a report from the Director of Finance (Section 151 Officer), which advised members of how the governance of the Firefighters Pension Scheme complied with the Code.

 

It was noted that whilst the Scheme Manager continued to ensure it met its regulatory and statutory obligations, it had not formally reviewed its compliance to the Code of Practice 14 since it was reviewed as part of the creation of the Fire Local Pension Board in 2015.  In recognition of this the Scheme Manager had undertaken a comprehensive review of the Code and identified the extent to which it was compliant.

 

The Senior Manager explained that the conclusion of the review was that the Scheme Manager was compliant with the Code.  However, there were 3 areas where the RAG rating was amber:-

 

·      Internal controls

·      Maintaining contributions, and

·      Internal dispute resolution

 

To be able to fully evidence compliance and change the ratings to green, processes relating to internal control and how contributions payable to the Fund were monitored would be documented and the IDRP policy was in the process of being reviewed.

 

RESOLVED that members

 

(1)      note that the Scheme complies with the requirements of the Pensions Regulator’s Code of Practice 14;

(2)      note the action plan to develop documented procedures and to review the IDRP policy to ensure that compliance with the Code can be fully evidenced.

 

 

10.

REPORT ON DATA REVIEW AND DATE IMPROVEMENT PLAN pdf icon PDF 325 KB

To consider a report from the Director of Finance (s151 Officer) (copy enclosed)

 

Additional documents:

Minutes:

Members considered a report from the Director of Finance (Section 151 Officer), which advised that Your Pension Service (YPS) carried out a review of data in October 2018 specifically looking at items that the Pensions Regulator referred to as ‘common and specific data’ and this assessment indicated over 99% of common data and over 93% of scheme specific data was present and accurate.

 

Data quality within the Cumbria Scheme was reviewed continually throughout the year.  This report updated the Board on data quality within the Scheme and then detailed progress against the actions within the Data Improvement Plan.

 

The Scheme completed its annual Scheme Return to the Pensions Regulator in October 2018 which, for the first time, included data quality scores.  Using the scoring mechanism as set out by the Pensions Regulator, the Scheme reported that 99.36% of its common data (e.g. NI number, address etc.) was present and accurate and the scheme specific conditional data (e.g. employment details, contribution history etc.) was scored as being 93.35% present and accurate.

 

Members noted that, in the final quarter of 2018, the Council’s internal audit undertook an audit review of data quality within the Cumbria Local Government Pension Scheme (Cumbria LGPS), which provided substantial assurance on the internal controls in place.  Whilst this audit reviewed the Cumbria LGPS, many of the systems for maintaining good quality data were consistent with those for managing and maintain data within the Cumbria FPS.

 

A factor contributing to missing “common data” related to the Scheme not having an accurate or complete address for scheme members. Whilst the number of scheme members known to have inaccurate or incomplete addresses held for them by the Scheme was very low (20 members of the Cumbria FPS) the Pension Regulator’s Code of Practice 14 provided specific guidance relating to data quality, and notes that “Schemes should attempt to make contact with their scheme members and, where contact was not possible, schemes should carry out a tracing exercise to locate the member and ensure that their member data are up-to-date.

 

The Scheme had engaged Target Professional Services Ltd (“Target”), a data tracing agency, to attempt to verify the correct address of the active members and pensioners that were incomplete or inaccurate.  This exercise was ongoing and the results would be reported to a future meeting of the Board. 

 

Members AGREED that further work should be undertaken to verify the correct address data for deferred members, and in addition they asked the Business Partner to provide numbers for those active members that had opted out of the scheme.

 

RESOLVED that the Board

 

(1)      note the report and the data quality improvement plan;

(2)      agreed that further work should be undertaken to establish missing data for deferred members.

 

11.

ANNUAL REPORT 2018/19 pdf icon PDF 143 KB

To consider a report from the Director of Finance (s151 Officer) (copy enclosed)

 

Additional documents:

Minutes:

The Fire Local Pension Board considered a report from the Director of Finance (Section 151 Officer) which provided an Annual Report outlining the work of the Cumbria Fire Local Pension Board in 2018/19.

 

RESOLVED that the Board agree the Annual Report of the Cumbria Fire Local Pension Board for 2018/19 for presentation to the County Council.

12.

VERBAL UPDATE OF EMERGING ISSUES

For the Board to note any emerging issues

Minutes:

Discretions Policy

 

The Chief Fire Officer reported on the emerging issues of the Discretion Policy and the delegations affecting the Fire Pensions Scheme.

 

A policy had been drafted and the Board, in their capacity as members of the Board, rather than their wider roles, were asked to review the document and feedback responses to the Senior Advisor, People Management.

 

The Chief Fire Officer AGREED to circulate the policy to all Board members for comment by the end of May.