Decisions

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Decisions published

05/12/2017 - Update on Implementation of BCPP Asset Management Company (Update VIII) ref: 347    Recommendations Approved

Decision maker: Cumbria Pensions Committee

Made at meeting: 05/12/2017 - Cumbria Pensions Committee

Decision published: 07/02/2018

Effective from: 05/12/2017

Decision:

Consideration was given to a report by the Assistant Director – Finance (s151 Officer) which updated Members on the high level activities undertaken across the BCPP project work streams since the last meeting. The project continued to move at pace towards the final delivery of phase three of the BCPP implementation plan, i.e. to establish a fully regulated asset management company that would be ready to accept the transition of assets by June 2018.

 

The paper also outlined the potential work programme and decisions that may be required to be undertaken by the Fund to ensure it has the most appropriate governance and resources in place going forward. The Fund would be required to develop to meet its changing role throughout and following the transition of assets into BCPP Ltd. The initial asset template approved by the Joint Committee on 20 October 2017 and supporting transition plan were shown at Appendix A to the report.

 

The Committee were informed there would inevitably be an evolving situation over the next three years as the Joint Committee moves from its current role of implementation management through transition oversight into a steady state role as collaborative client liaison on investment performance and engagement and the company develops to take on the direct management of the Partner Fund’s assets.

 

Previously, project implementation had been overseen by the Joint Committee. As the senior management team is being recruited, finalising the implementation would be transferred to Officers and the Board of BCPP Ltd.

 

As this happens and the project moves from implementation to “steady state”, Funds and the Joint Committee would need to change the emphasis of their focus so that more attention is given to issues specific to the Partner Funds in managing the performance of BCPP Ltd. Cumbria specifically would, through its representatives on the Officer Operations Group (OOG), Statutory Officer Group (SOG) and Member on the Joint Committee, need to ensure that any risks specific to itself were adequately represented in the collaborative register.

 

The paper also detailed the joint BCPP autumn submission to DCLG. The response to this from DCLG was currently awaited.

 

The BCPP Development Budget had been reviewed and it was noted that a recommendation would be put to Joint Committee in January 2018 to increase this budget. To expedite this, Members gave provisional approval of an additional implementation budget of up to £50,000 with a further recommendation put forward that Members devolved responsibility to the s151 Officer in consultation with the Chair of the Pension Committee to approve the final increase up to this amount and report back to Pensions Committee in March.

 

Pensions Committee were advised that the most tax efficient method of transferring funding from partner Funds to BCPP Ltd was through a working capital loan. This loan was going to be provided by South Yorkshire Pension Authority with each partner Fund giving a loan guarantee to SYPA should BCPP Ltd default on its loan agreement. The loan is for a value of £1.8m with Cumbria Pension Fund being responsible for 1/12th of any default against the loan (i.e. £150,000). The loan is for a period of 364 days after which time the loan guarantee would expire.

 

As reported to Council in February 2017, the Committee were also reminded that there would be a need for a further guarantee to support the admission of BCPP Ltd as an LGPS employer with SYPA.

 

RESOLVED,             that Pensions Committee:-

 

(1)  Note the progress on development of BCPP Ltd

 

(2)  Devolve responsibility to the S151 Officer in consultation with the Chair of the Pension Committee to increase the BCPP Development budget by up to £50,000 and report back to Pensions Committee in March

 

Divisions affected: (All Divisions);