Agenda and minutes

Members and officers are invited to make any declaration of personal or prejudicial interests that they may have in relation to items on the agenda and are reminded to make any declarations at any stage during the meeting if it becomes apparent that this may be required when a particular item or issue is considered.

It is recorded in the register of interests that:

·         Mr Donnelly is a Horsham District Councillor

·         Mr Elkins is a Member of the Littlehampton Harbour Board and Arun District Council

·         Mr Hunt is the Chairman of the Chichester Harbour Conservancy

·         Mr Jupp is a Member of Horsham District Council and has a daughter who works for Blackrock

·         Dr Walsh is a Member of the Littlehampton Harbour Board, Arun District Council and Littlehampton Town Council

These financial interests only need to be declared at the meeting if there is an agenda item to which they relate.

29.1   None declared.

The Panel is asked to agree the Part I minutes of the meeting of the Panel held on 24 July 2019 attached (cream paper).

30.1   The Panel queried the progress with appointing for the Employer Representative vacancy.  – Rachel Wood, Pension Fund Investment Strategist, confirmed that work was continuing with the Director of Law and Assurance on the job role that would be distributed.

30.2   Resolved – That the Part I minutes of the Pensions Panel held on 24 July 2019 be approved as a correct record, and that they be signed by the Chairman.

The Panel is asked to agree the minutes from the annual meeting held on 24 July 2019 attached (cream paper).

31.1   Resolved – That the minutes of the Pensions Panel AGM held on 24 July 2019 be approved as a correct record, and that they be signed by the Chairman.

The Panel is asked to note the confirmed Part I minutes from the meeting of the Pension Advisory Board on 22 May 2019 and the agenda from the meeting of the Pension Advisory Board on 4 September 2019.

32.1   The Panel considered the confirmed Part I minutes from the 22 May 2019 Pension Advisory Board meeting; and the Agenda from the 4 September 2019 meeting (copies appended to the signed minutes).

32.2   The Panel made comments including those that follow.

• Queried if the Board’s regarding policy documentation had been addressed.  – Rachel Wood confirmed that the action had been picked up and resolved.
• Sought clarity on the reported outcomes of McCloud on employer rates.  – Steven Law, Hymans Robertson, explained that protection would be rolled out to an increased membership.  Whilst it was unclear who this would be rolled out to, costs would be increased.

32.3   Resolved – That the minutes and agenda be noted.

Report by the Director of Finance and Support Services.

The Panel is asked to note the update.

The Panel also to receive a presentation from the fund actuary.

33.1   The Panel considered a report by the Director of Finance and Support Services (copy appended to the signed minutes).

33.2   Rachel Wood introduced the report which set out the summary since the last meeting.  The report confirmed that the current funding level was 112%, and that new rates following the valuation would be effective from 1 April 2020.

33.3   Steven Law gave a presentation to the Panel on the 2019 Valuation Results (copy appended to the signed minutes).

33.4   Steven Law spoke through the presentation which outlined the calculations and assumptions that formed the valuation work to ensure that the pension fund could deliver its requirements for members.  The presentation included 2 updates from Central Government.  The first confirmed there would be a 2022 valuation, but it was unconfirmed what would happen after this.  The second concerned the value of liabilities and that contribution rates needed to take allowance of McCloud and cover this within the valuation.

33.5   Steven Law explained that it was no longer required for members to submit nomination forms which was previously required to pay death grants.  The fund had the authority to choose to pay an alternative person than the one stated on a nomination form.  Steven Law confirmed that there was general rules and criteria for these decisions.  -  The Chairman requested that clarity on this process should be available for the next meeting (document appended to the signed minutes).

33.6   The Panel made comments including those that follow.

•      Queried if Retail Prices Index (RPI) would be removed from future valuation calculations.  – Steven Law predicted that it could be replaced with an alternative in the future.

•      Asked how life expectancy for future members was considered.  – Steven Law explained that this was allowed for in mortality projections portion of assumptions.  The pace of increases in life expectancy is reflected in this assumption.

•      Commented on the consideration for salary increases and that average earnings could outpace the Consumer Prices Index (CPI); and asked if it would it be prudent to expect salaries to match the market.  – Steven Law explained that the first year had lower paid staff get increases as the living wage was introduced, this was used to help with considering the average.  Promotional increases are applied on top of the 0.5%.

•      Reported on the increases to British Telecom (BT) pensions for women following a change in pension calculations and asked if this was unique to BT.  – Steven Law explained this was not unique to BT and was linked to the Barber ruling and the Lloyds ruling concerning sexual discrimination in pension ages.  The Lloyds ruling would impact the Local Government Pension Scheme (LGPS).  A lower anticipated return rate had been picked for the LGPS which made approximate allowance for this and for the McCloud outcome.

•      Noted the overall funding level of 112% and queried the funding level for various employers.  – Steven Law confirmed that employers had different values which were still being calculated.  ...  view the full minutes text for item 33.

Report by the Director of Finance and Support Services.

The Panel is asked to note the updates to the Business Plan.

34.1   The Panel considered a report by the Director of Finance and Support Services (copy appended to the signed minutes).

34.2   Nadine Muschamp, Head of Finance, introduced the report and explained that the report provide an update on actions from the previous meeting.  Appendix A gave a summary of the Pension Regulator’s deep dive, for which officers were working with Hampshire County Council on any areas that needing picking up.

34.3   The Panel noted that the Annual Audit Letter would be considered at the upcoming meeting of the Regulation, Audit and Accounts Committee.

34.4   Resolved – that updates to the Business Plan are noted.

Report by Director of Finance and Support Services.

The Panel is asked to approve the recommendation to vote in favour of the Scheme and Change to the Articles.

35.1   The Panel considered a report by the Director of Finance and Support Services.

35.2   The Panel noted that the report appendices contained exempt information and felt that the discussion on the report should be held in Part II.

Resolved - That under Section 100(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Part I, of Schedule 12A, of the Act by virtue of the paragraph specified under the item and that, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.

The Panel discussed the proposal and agreed to the approve the Scheme and Change to the Articles pending criteria discussed during the Part II portion of the meeting.

Report by the Director of Finance and Support Services.

The Panel is asked to note the update on the Administration Performance; the changes to the Administration Strategy; and agree the Breaches Policy.

36.1   The Panel considered a report by the Director of Finance and Support Services (copy appended to the signed minutes).

36.2   Nadine Muschamp introduced the report and explained that representatives from Hampshire County Council had sent their apologies for the meeting.

36.3   Nadine Muschamp confirmed that Hampshire County Council were committed to improving performance and noted the impact of legacy issues on their performance.  Officers were working with Hampshire County Council on a data improvement plan which would be reported on at the next meeting.

36.4   Nadine Muschamp reported that as of 31 August approximately 49,000 Annual Benefit Statements (ABS) had been produced.  Since then approximately 2,000 had also been provided.  There were 7,000 remaining where further work was required.  The outstanding ABSs would be reviewed with regard to if they constituted a breach.

36.5   The Panel made comments including those that follow.

•      Expressed disappointment that all ABSs had not been submitted on time following Hampshire County Council’s confidence.  – Nadine Muschamp gave assurances that identified issues were being worked on to ensure improvements were made for next year.

•      Queried if the 7,000 outstanding ABSs were from a mix of areas or were linked to a specific scheme.  – Steven Law confirmed that they were from a mix of areas and that Hampshire County Council had provided details of where they were to assist Hymans Robertson with the valuation work.

•      Raised concerns on the reduced performance for Divorce and Interfunds.  – Rachel Wood confirmed that Interfunds had fallen back and that Hampshire County Council had split legacy and business as usual work into two work streams.  Divorce work was done by the same team where Hampshire County Council worked to ensure data was provided to members when required, albeit not always complying with the SLA.  The Panel asked if these areas were more technically difficult that other areas.  – Rachel Wood reported that the work was the same level as other areas and should be straight forward if the correct data is available.

•      Queried if the data issues were historic or linked to transfer arrangements; and if the issues would impact the valuation work.  – Steven Law reported that the majority of the issues were historic and the valuation would make assumptions on any uncertain areas.

•      Sought reassurance that correspondence on death cases included appropriate empathy.  – Rachel Wood confirmed this was the case.

•      Queried the process for nominating a beneficial for death benefits.  – Steven Law explained that the criteria was that an individual with a minimum relationship.

•      Asked if the backlog and data quality issues were linked to resourcing and if extra support was required.  – Nadine Muschamp explained that a plan was being worked on with Hampshire County Council to understand what was a reasonable work load.  Consideration would then be given to see if additional resources were available.  This would be reported to the next Panel meeting.  The Chairman reminded the Panel that any new administration provider would have  ...  view the full minutes text for item 36.

The next meeting of the Pensions Panel will be 10.00 a.m. 27 January 2020 at County Hall.

37.1   The Panel noted that its next scheduled meeting would take place on 27 January 2020 at County Hall, Chichester.

The Board is asked to consider in respect of the following item(s) whether the public, including the press, should be excluded from the meeting on the grounds of exemption under Part I of Schedule 12A of the Local Government Act 1972, as indicated below, and because, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.

Resolved - That under Section 100(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Part I, of Schedule 12A, of the Act by virtue of the paragraph specified under the item and that, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.

To confirm the Part II minutes of the meeting of the Panel held on 24 July 2019, for members of the Panel only (yellow paper).

The Panel agreed the Part II minutes of the Pensions Panel held on 24 July 2019.

The Panel is asked to note the confirmed Part II minutes from the meeting of the Pension Advisory Board on 22 May 2019 (yellow paper).

The Panel noted the contents of the Part II minutes from the 22 May 2019 Pension Advisory Board meeting.

Report by the Director of Finance and Support Services attached for members of the Panel only (yellow paper).

The Panel is asked to consider the recommendations within the report.

The Panel considered a report by the Director of Finance and Support Services.

The Panel noted the update.

The following reports are for the Panel to review Pension performance over the last quarter.

The Panel considered a paper by the Director of Finance and Support Services.

The Panel received an update from Caroline Burton relating to the quarterly performance reports from the fund managers.

The Panel welcomed the advice.

The Panel to receive a presentation on portfolio performance.

The Panel received an update from Malcolm Gordon, Steve Magill, Scott Wilkin and Karianne Lancee from UBS on the portfolio performance for the quarter.