Agenda and minutes

Cumbria Fire Local Pension Board
Tuesday, 22nd October, 2019 1.00 pm

Venue: Community Room, Kendal Fire Station, Busher Walk, Kendal LA9 4RH

Contact: Lorraine Davis  Email: lorraine.davis@cumbria.gov.uk

Items
No. Item

13.

APOLOGIES FOR ABSENCE

To receive any apologies for absence.

Minutes:

Apologies for absence were received from Mr M Nicholson, Mr S Ratcliffe and Mrs J Willis.

 

14.

Membership and Terms of Reference pdf icon PDF 136 KB

To note the terms of reference of the Board.

 

Minutes:

The Board’s Terms of Reference were noted.  It was further noted that Cllr A Lamb had replaced Cllr G Ellis as an Employer Representative of the Board, that Mr M Nicholson was reappointed as a scheme members representative for a further four years and Mr S Ratcliffe had been appointed as substitute scheme member representative.

 

15.

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 at the meeting.

 

16.

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 excluded from the meeting during consideration of Agenda Item No 10 - Your Pension Presentation and Agenda Item No 11 - Verbal Update on Emerging Issues 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.

 

17.

MINUTES pdf icon PDF 86 KB

To receive the minutes of the previous meeting held on 23 April 2019 (copy enclosed).

 

Minutes:

RESOLVED,that the minutes of the meeting held on 23 April 2019 be agreed as an accurate record and signed by the Chair.

 

18.

Schedule of Future Meetings

To note the following scheduled meetings:-

 

4 February 2020 at 1 pm at Carlisle West Fire Station

5 May 2020 at 1 pm at Penrith Fire Headquarters

15 July 2020 at 1 pm Cumbria House, Carlisle

 

Minutes:

The following schedule of meetings were noted:-

 

4 February 2020 at 1 pm at Carlisle West Fire Station

5 May 2020 at 1 pm at Penrith Fire HQ

15 July 2020 at 1 pm at Cumbria House, Carlisle

 

19.

Monitoring Report for the Period ending 30 June 2019 pdf icon PDF 169 KB

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

 

Additional documents:

Minutes:

Board members considered a report from the Director of Finance (Section 151 Officer) which advised of any material risk management, policy or governance issues and national regulatory changes to 30 September 2019 and performance monitoring issues of the Scheme to 30 June 2019.

 

The Technical Finance Officer - Pensions 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. 

 

Following a discussion on cyber security, members welcomed the suggestion that a member of the ICT team be invited to attend a future meeting of the Board and outline the risk security arrangements in place.  In order to be able to better differentiate between risks 2.4 and 2.6, it was agreed that the terminology in the register be amended to highlight the different mitigations.

 

The Finance Manager - Regulatory & Benefits advised as previously reported, the draft results of the 2016 valuation showed that the cost cap floor has been breached (i.e. costs are more than 2% lower than the 16.8% of pensionable earnings cost target set out in the 2015 firefighter scheme regulations).  Under normal circumstances this would result in action being taken (e.g. improving member benefits) to bring the cost back up to within the target cost range.

 

However, as also previously reported, this action was paused in January following a ruling by the Court of Appeal on two cases (Sargeant and McCloud).  The cases related to ‘transitional protections’ in public service pension schemes which applied on the introduction of the new career average public sector pension schemes in 2015.  In the case of the FPS this is the protections in the 2015 Scheme which allowed certain members to have benefits calculated under the 1992 and 2006 Schemes.  Following consideration of the cases the Court ruled that these changes discriminated against a group of firefighters and a group of judges on the grounds of age.  The case was now being progressed to remedy and until this outcome was known, any potential costs or impact on the cost cap process could not be reliably estimated.

 

Members noted that there were no breaches to report for the quarter to 31 March 2019, and that it had not been necessary to exercise any of the Scheme Manager discretions during the period.

 

The Fire Scheme Board had commissioned a survey in 2018/19 to be undertaken by AON and a summary of findings was attached as Appendix 4 to the report.  Members noted that not all schemes were able to provide cost information and therefore the costs indicated in the AON report could not be taken at this stage to be a completely accurate reflection, however the  ...  view the full minutes text for item 19.

20.

CUMBRIA FIREFIGHTERS' PENSION SCHEME (FPS) DATA IMPROVEMENT PLAN pdf icon PDF 130 KB

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

 

Additional documents:

Minutes:

Members considered a report from the Director of Finance (Section 151 Officer) which advised that Your Pension Scheme (YPS) had 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.

 

In January 2019 a data plan was developed to further improve the quality of data across the scheme and this report updated members on progress made delivering against the plan during the quarter.  The report concluded that good progress was being made with the actions detailed in the data improvement plan.

 

The Group Finance Manager - Pensions Investments & Insurance informed members of the Member Tracing exercise that had been undertaken to ensure scheme member data was up to date.  The Scheme had engaged Target Professional Services Ltd to attempt to verify the correct addresses of the active and pensioners that were incomplete.  Members noted that following this exercise there were only 25 members (out of 229) to have their current addresses traced.

 

Members were informed of the National Fraud Initiative (NFI), a compulsory exercise carried out every two years that matched electronic data within and between public and private sector bodies to prevent and detect fraud.  It was noted that for the next data set from the NFI was scheduled to be received in 2020.

 

To conclude the Group Finance Manager updated members on the Government Actuary Department (GAD) 2016 Valuation Data.

 

RESOLVED,that the report and data quality improvement plan be noted.

 

21.

Pensionable Pay pdf icon PDF 108 KB

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

 

Minutes:

Members received a report from the Chief Fire Officer providing the Board with an update on the work undertaken following the Booth v Mid and West Wales (2019) case, a recent High Court judgment on pensionable pay.

 

Members noted that there had been a number of key cases that had been referred to the Pension Ombudsman and High Court in relation to firefighters pay.  The Booth v Mid and West Wales case considered pensionable pay for Firefighters in the Welsh Firefighters Pension Schemes, the points of the judgement equally apply in the English Firefighters Pension Schemes.  Members were informed that 4 firefighters had complained to the Pension Ombudsman whose decision was appealed and considered by the High Court.  A summary of the High Court judgement was outlined in the report.

 

Cumbria Fire and Rescue Service (CFRS) were required to review and make an informed assessment on the pay provided to firefighters within the meaning of the different scheme rules and how these were pensionable (pensionable pay or Additional Pension Benefit APB).  Assessments would need to be made by:

·         reviewing what payments were made

·         the circumstances around those payments

·         the contractual arrangements (including those undertaking secondary contracts)

·         reviewing the relevant role maps

·         the different definitions of permanency under the different scheme rules

·         interpreting the application of pensionable pay using the ‘Blackburne Principals’

o   calculated in accordance with ordinary rate of pay

o   for work done under the firefighters contract of employment

o   regular in nature i.e. something to which the firefighter was entitled in the ordinary course of fulfilling duties under the contract, not one off or unexpected

Work was currently being undertaken to address the above actions by People Management and CFRS management and once completed a further update would be given to the Board.  After the initial assessment was completed, legal advice would be sought.

 

Members were informed that with regards to any retrospective action that may be needed to correct pensionable pay where it had previously deemed as not pensionable, the LGA on behalf of the Scheme Advisory Board was taking further legal advice specifically on whether the limitations act can or should be used.  The legal advice was still to be received. 

RESOLVED, that

 

(1)  the report be noted;

 

(2)  a further update be given at the next meeting of the Board

 

22.

Your Pension Service Presentation

To receive a presentation from Rachel Blundell, Director of Member Operations, Local Pensions Partnership.

 

Minutes:

Members received a verbal update from Ms R Blundell (Director of Member Operations, Local Pensions Partnership) and Ms J Wisdom (Operations Manager, Pensions Administration, Local Pensions Partnership).  The update included information on reorganisation in the service, performance, upgrading IT systems and staffing.  It was agreed that a meeting be arranged between the Local Pension Partnership and the Service Centre.

 

23.

Verbal Update on Emerging Issues

For the Board to note any emerging issues.

 

Minutes:

Members received a verbal update from the Group Finance Manager - Pensions Investments & Insurance.