Agenda, decisions and minutes
Venue: Delyn Committee Room, County Hall, Mold CH7 6NA
Contact: Maureen Potter 01352 702321 Email: maureen.potter@flintshire.gov.uk
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Declarations of Interest (Including Conflicts of Interest) To receive any Declarations and advise Members accordingly. Minutes: No new conflicts were declared.
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To confirm as a correct record the minutes of the last meeting held on the 21st February 2018. Decision: It was agreed the minutes could be received, approved and signed by the Chairman.
Minutes: The minutes of the meeting of the Committee held on 21 February 2018 were submitted. Cllr Bateman and the Chair wanted to emphasise the excellent quality of the previous minutes and congratulated Miss Fellowes on a job well done. RESOLVED: It was agreed the minutes could be received, approved and signed by the Chairman.
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PLSA CONFERENCE SESSION VIDEO ON COST TRANSPARENCY Minutes: The Chairman introduced the PLSA conference session video on cost transparency and how to ensure value for money with investment management fees. The video can be found at https://www.youtube.com/watch?v=0SDtFo5AOhs. The video was in regards to the transparency of investment fees, with asset owners and regulators pushing for disclosure of manager fees across asset classes. Therefore, investors must continue to seek investment advice and so with new recommendations emerging from the Industry Disclosure Working Group, the video explained what the next steps are for investors, advisors and service providers.
The Chairman explained that, in terms of the Clwyd Pension Fund, they have always asked their fund managers to provide full investment costs for its annual report and so the session showed the Committee how this should become more consistent in the future across the investment community especially as some LGPS funds still do not publish the data.
He also advised the Committee that, as the Fund’s representative on the Joint Governance Committee (JGC) of Wales Pensions Partnership (WPP), he confirmed he would be ensuring that the Operator (LINK), who the board met at the last Committee, would be expected to require that managers comply with the new Cost Transparency Code where possible.
After the video finished Mr Latham mentioned that the topic was close to the heart for the Fund as there has been a lot of work involved in providing cost transparency including gathering research and thoughts to input into the requirements. The work has included setting up a template for Funds.
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Business Plan 2018/19 to 2020/21 PDF 90 KB To provide Committee Members with the Business
Plan for approval. Additional documents:
Decision: 1. That the Committee members noted the progress made towards the Fund’s Business Plan during 2017/18
2. That the Committee approved the Business Plan in Appendix 2 relating to the period 2018/19 to 2020/21
Minutes:
The Chairman introduced the main item on the agenda to the Committee and passed over to Mr Latham. Mr Latham asked the Committee for approval of the Business Plan for the upcoming 3 years and directed the room to page 24 of the papers where the bullet points emphasised the main purposes of the Business Plan.
The key points in relation to the Business Plan were;
Mr Latham continued by stating that the section on Funding and Investment risks (page 47) showed that risks will always be high since the Fund is not 100% funded or able to hedge out all of the risks. The flightpath is the “plan” put in place in order for the Fund to move towards full funding and also minimise the risk of deterioration. An interim actuarial review will be undertaken in 2018 to help with budgeting for employers and alongside this is the finalisation of the employer risk management framework.
Other risks take account of the administration and member communication. The administration involves training and supplementing that with the outsourcing of work to external parties to clear the backlogs etc. The communication with members is now more and more through the Member Self Service (MSS).
The upcoming tasks for the administration team (including communications) are displayed on page 52 where most of the items are already familiar as ongoing work; however these tasks would take time to implement. These tasks are as follows;
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Pooling Investments in Wales PDF 87 KB To provide Committee Members with an update on
the Wales Pension Partnership. Additional documents: Decision: 1. That the Committee note the report and discuss progress being made by the Wales Pension Partnership
Minutes: Mr Latham guided the Committee to page 65 where this section of the agenda is a report which is for information purposes.
The key points Mr Latham made were that;
Mrs McWilliam noted that the WPP budget covers areas such as staffing, legal services and operator services fees for Link and Russell.
Mrs Fielder confirmed that she had increased the fees relating to pooling compared to those incorporated within the budget as she believed more work will be needed to implement the sub funds than first thought. However it is difficult to predict the level of costs currently.
Mr Hibbert noted that there are concerns in the pools generally regarding two tier workforce due to different pay/conditions and TUPE issues and asked whether there were any problems in Carmarthenshire.
Mrs McWilliam replied that the concerns tend to be in relation to staff being transferred from local authorities to the pool but this is not the case for WPP as it is an external operator.
Mr Everett asked whether they were all Carmarthenshire employees. Mrs McWilliam confirmed that the employees operating the pool were Link and Russell employees but the staff and hires relating to the Host Authority work will be Carmarthenshire employees.
Mr Everett wanted confirmation of how running costs are proportioned. It was confirmed that they are split equally, i.e. 1/8th to each Fund.
Mrs Fielder added that any costs relating to Link and Russell are in relation to the size of assets that are pooled. These had been estimated and included in the separate budget figures in the business plan although it was noted for 2018/19 it will only be part year costs as the assets have yet to be transitioned.
Mr Latham asked whether any of the Committee members will attend the JGC. Mr Hibbert confirmed he will try to attend.
Mr Latham said that there are ongoing discussions regarding the fact that the Committee and Board would not be entitled to sit in the JGC for parts of the meeting due to confidentiality reasons at this stage e.g. due to ongoing discussion over manager fees. It was commented that this is not an ideal situation and the hope is that over time Committee members could attend the meeting as they would be bound by the same level of confidentiality as the JGC members.
RESOLVED:
1. That the Committee ... view the full minutes text for item 110. |
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To provide Committee Members with current
issues affecting the management of the LGPS. Additional documents: Decision: 1. It is recommended that all Committee members note this report and make themselves aware of the various current issues affecting the LGPS, some of which are significant to the operation of the Fund
Minutes: The Chairman passed over this item of the agenda to Mr Middleman to highlight key points regarding the LGPS current issues. Mr Middleman noted the comments regarding the slowdown in life expectancy improvements based on the 2017 analysis by the Continuous Mortality Investigation Bureau (CMI) which has continued into 2018 based on the latest information. This is of course not a good thing for individuals but is positive for Fund finances. Mr Middleman added that there could be a reduction in the liabilities of 1-2% which could lead to a fall of around £40 million off the deficit. He commented that also in the press is the event of the Northamptonshire County Council (NCC) section 114 notice. This was in relation to the spending controls at NCC reflecting a severe financial strain on the county council. This was the first time Mr Middleman had seen this since he had been an Actuary, but he thought that it reinforced the need for a robust employer management framework. This situation highlights the need to be aware that these things happen to even the strongest employers. Cllr Bateman queried whether the auto-enrolment review was still happening. Mr Middleman responded by saying that it was complete and the implementation is mid-year of 2020. The impact in the long term could be that auto enrolment could capture a bigger population. However, it would not be expected to be significant for the Fund. RESOLVED:
1. It is recommended that all Committee members note this report and make themselves aware of the various current issues affecting the LGPS, some of which are significant to the operation of the Fund
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Pension Administration/Communications Update PDF 110 KB To update Committee Members on the Pensions
Administration Section. Additional documents:
Decision: 1. That the Committee considered the update and provided comments on the format of the graphs.
Minutes: Mrs Burnham stated that there was nothing specific to highlight in this report but that on page 91 the caseloads under appendix 1 (day to day tasks) for the member case levels were in new graphic form as opposed to just figures. This gives more of an idea of what work has been completed, added and the amount of work coming into the office as well as the historical levels and peaks in case levels. It also shows the level of activity for the 3 Councils separately. The trend shows that there has been an increase in the monthly number of tasks. Some of this relates to the amount of work caused in the creation of new admitted bodies on transfers of staff, for example, when 400 staff was transferring to new admitted bodies (NEWydd and Aura). Mrs Burnham also noted that the were in excess of 700 unknown joiners notified due to the iConnect implementation which would lead to more work in the busy interim review period and this would have a knock on effect of other tasks. However, this would be expected to settle down and going onto iConnect is a very positive step going forward for the Fund in terms of data quality and meeting the statutory deadlines. Mr Hibbert pointed out that on page 91 whether there was a scaling issue that the Fund needs to be looked at as it is a concentrated amount of information. Mrs Burnham confirmed the format of the graph would be reviewed and the underlying statistics are available in tabular format. Mrs Burnham commented that on appendix 2 from page 94 onwards which showed the performance against KPIs, this was also done in a graphical format for clarity showing the three different areas of legal requirement, internal turnaround times and the overall experience i.e. end to end process. TPR is interested in the legal requirements but it is important to look at this from different perspectives. It covers 7 key process areas. The Chairman asked if Mrs Burnham could explain the new graphs from appendix 2. Mrs Burnham explained that on page 94 the thick line showed the % number of completed cases (right hand axis) and the bar chart showed the number of cases completed (left hand axis). It was noted that some of the legal obligations were not being met and it was explained that the various initiatives (iConnect, Data Improvement plan etc.) are part of the plan to assist in meeting the targets but noting that 100% compliance in every area may not be possible as it relies on 3rd parties supplying the data in a timely way e.g. employers. Mr Hibbert commented that for the graphical presentation it was clear to understand the ones where the Fund hadn’t achieved compliance. However with the ones where the Fund has exceeded the legal requirement it was difficult to see e.g. why the thick line on the graph looks way above the bars on page 97. ... view the full minutes text for item 112. |
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Investment and Funding update To provide Committee Members with a verbal update from Fund Officers and Consultants Minutes: The Chairman noted that there is no written report for this item on the agenda as the areas were covered at the February Committee but passed over to Mr Middleman, Mr Harkin and Mrs Fielder for a verbal update on Investments and Funding. Key points were;
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PLSA CONFERENCE SESSION VIDEO ON PENSION RISK Minutes: The Chairman introduced the final PLSA training session video about Pension Risk which can be found at https://www.youtube.com/watch?v=Xwx3MfQzeuY. The video included a panel of senior investment figures discussing macro and thematic risks to determine which they see as most threatening. Examples include risks from geopolitical developments, climate change risks, and stranded assets.
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