Agenda and draft minutes

The Chair will draw attention to the emergency evacuation procedure as set out under Note 5.

The Chair welcomed everyone to the meeting and asked the Democratic Services Officer to read out the Emergency Evacuation Procedure.

The Democratic Services Officer informed the Board that apologies had been received from Helen Ball (Member Representative), Stuart Anstead (Employer Representative) and Jeff Wring (Director of Financial Services, Assurance & Pensions).

There were none.

There was none.

There were none.

There were none.

The Board approved the minutes of the previous meeting and they were duly signed by the Chair.

The Board will receive a verbal update regarding this item from the Group Manager for Funding, Investment & Risk.

The Group Manager for Funding, Investment & Risk addressed the Board. She stated that, from a relative performance perspective, financial markets were making it quite challenging and that a small number of technology stocks were doing well and had a high weighting within equity markets.

She added that the timing of interest rate cuts is a factor to monitor, but is unknown, especially within the USA.

She said that there were signs that the UK property market were beginning to stabilise

She explained that Brunel and its respective Portfolio Managers were doing as the Fund have asked, but some stock picking issues had arisen in specific portfolios.

She stated that the Octopus Housing Fund had now closed and that the deployment of capital was expected to take place early next year. She added that as part of this work Octopus have also held discussions with local housing developers.

She said that the Pensions Reform Bill was likely to require further discussions in relation to pooling and investments and that talks with stakeholders would be arranged in due course. She added that she was concerned over the speed of the review / consultation and that the Fund would contribute where it can.

Alison Wyatt asked if she was worried about the level of underperformance.

The Group Manager for Funding, Investment & Risk replied that the underperformance was mainly within the Equity Markets and that this can be expected to have fluctuating levels of performance, especially as 7 technology stocks have driven the bulk of market gains during 2023024.

The Head of Pensions added that the Fund has to assess the concentration risk associated with these types of stocks and that managers are taking a prudent approach.

The Chair asked if there were any issues relating to cash flow or employers that the Board needs to be aware of.

The Group Manager for Funding, Investment & Risk replied that there were no issues and that this would be something that will be looked at in more detail at the next valuation. She added that the funding level was at around 102% and that an interim valuation was due in the coming weeks.

The Board RESOLVED to note the update provided by the Group Manager for Funding, Investment & Risk.

The purpose of this report is to review and approve the Pension Board’s annual report. 

The Governance and Risk Advisor introduced the report to the Board. She explained that, if approved, the report will be taken to Council on 21^st November 2024 along with the Pension Committee’s annual report to Council.

Steve Harman asked if any progress had been made on the recruitment of new members of the Board.

The Governance and Risk Advisor replied that they have been advertising for new Board members via newsletters, annual benefit statements and the Fund website. She added that the closing date for applications had been 3^rd September 2024 and that four applications had been received. She said that interviews were planned to take place during September so that appointments could be made prior to the December meeting of the Board.

Steve Harman asked what happens to the small budget surplus that has been recorded within the report.

The Governance and Risk Advisor replied that a budget for the Board is agreed every year and that the surplus would sit within the Fund until an assessment had been made as to whether it is required to be carried forward into the subsequent year. She added that the costs associated with recruitment used to cost a lot more.

The Board RESOLVED to approve their Annual Report for 2024.

The purpose of this report is to present the Fund’s administration performance for the three months to 30^th June 2024 vs key performance indicators (KPI’s).

The Governance and Risk Advisor introduced the report to the Board. She provided the following information that had not available at the time of writing the report.

McCloud

She stated that officers had been concerned over the past week regarding the Government’s lack of reference to McCloud and the need to show any differences in respect of that on the Annual Benefit Statement. She explained that on 31^st August the Government announced a change to the regulations that said there would be no need show this currently.

She informed the Board that fixes to the software regarding McCloud were now being tested.

She then highlighted the following issues from within the report.

Pension Increase

Supplementary Pensions Increase (PI) is planned for October pay run subject to final testing.

The Chair commented that there was no deadline to have this solution in place and that Funds were dependant on their software providers.

Procurement

The fund has started preparatory work of the procurement process for the main software system and an Integrated Service Provider for the Pensions Dashboard – which will be done as one contract using the LGPS framework.

The Head of Pensions stated that this was a big strategic project and that the chosen provider would need to work across the Fund’s existing eco-system.

The Chair said that it was vital for the service that all parts of the system join up and that it was important to get things right and be thorough within the deadlines.

The Head of Pensions said that the Board would be updated appropriately and could expect further information at their December 2024 and March 2025 meetings.

The Governance and Risk Advisor said that the year-end exercise had gone well. She said that two employers could potentially receive fines due to late submissions.

The Employer Services Manager commented that they were looking to provide further support / training to employers where possible.

The Governance and Risk Advisor highlighted the following areas from the Restructure Update.

·  New structure in place with effect from 1st August

·  All ring-fenced officers got their first choice of roles

·  Recruitment into new structure & new roles – Q3-Q4 – 15 vacant posts remain

·  Movement of work and responsibilities – Q3

The Payroll Manager highlighted the following areas from the Workflow Update.

Q1 and beyond…

·  Permanent team leaders appointed

·  Training – new and existing officers

·  Continued focus on backlogs

·  Temporary “retirement team”

SLA monthly performance average July 23 – 18th August 24

·  Many more areas turning green

·  Team is focussed and working hard to reduce service backlogs

KPI cases completed as % July & August 24

·  Overall picture is improving

The Chair suggested that a cumulative ‘Green’ column could be added to this slide for future reports.

The Payroll Manager said that there was a good atmosphere amongst the team and that they were aware and could see that progress was being made. She added that they were ahead of their projection for their Service Performance Plan.

The Employer Services Manager added that  ...  view the full minutes text for item 21.

This report sets out a summary of the annual review of the governance arrangements for the Pension Board. It also provides an overview of the annual governance review undertaken by Committee in June.

The Governance & Risk Advisor introduced the report to the Board and highlighted the following areas from it.

·  Annually in June the Avon Pension Fund Committee review its governance arrangements.

·  Scheme of Delegation - following recommendations in a recent internal audit a number of minor changes to the schedule and authorisation lists have been made to clarify roles, responsibilities and processes.

·  Pension Committee’s Terms of Reference – a change has been made to reflect decisions regarding the Local Impact Portfolio Framework being delegated to The Head of Pensions in conjunction with the working group. The formal decision will be taken by the Head of Pensions as an Officer Decision Report via the normal democratic reporting processes within Bath and North East Somerset Council. The revised Terms of Reference was approved by Council in June.

·  Conflicts of Interest Policy - a couple of changes have been made to the Pooling section to reflect the current voting arrangements for Brunel. The wording originally stated decisions required a unanimous vote, this has been updated to reflect a majority vote.

·  Under & Over Payments Policy – The Committee approved the policy in March 2024. The Fund identified the need to put in place a clear policy to establish the principles of rectification for members where there has been either an overpayment or underpayment of pension benefits.

Alison Wyatt commented regarding the Policy on the Overpayment and Underpayment of Pension Scheme Benefits and Contributions and said that she felt that a lot of instances had occurred recently.

The Governance & Risk Advisor replied that this does not happen on a regular basis outside of the ongoing work in relation to the Supplementary Pensions Increase. She added that GMP rectification may also show a high degree of instances and that the policy was in place to cover all eventualities.

The Board RESOLVED to note the report.

The purpose of this report is to update the Pension Board with the quarterly review of the risk register.

The Governance & Risk Advisor introduced the report to the Board and highlighted the following areas from it.

The quarterly review of the risk register has taken place and there have been a few changes made to the risks and their scores as follows:

• Risk NR07 (Employers data) has increased from a ‘possible’ post-mitigation likelihood to ‘likely’, reflecting the need for more focus on employer training.

·  Risk NR02 (Regulatory change) has been decreased post-mitigation from ‘likely’ to ‘possible’. This reflects the strong mitigants in place and a re-prioritisation of risks.

·  Risk NR19 (Pensions Reform Bill) has been introduced to recognise the increased workload, staff retention and lack of Fund control around this.

The top five risks are now:

·  NR06 – the likelihood of a cyber-attack remains a high risk due to the recent high-profile attacks in the public domain. The Fund is currently implementing further audit actions around staff awareness and education and is in the process of carrying out a review of its business continuity plan.

·  NR01 – Poor service levels below agreed standards. The current factors impacting this risk are set out in the Pension Fund Administration report.

·  NR04 – Significant errors arising from poor controls. An external consultancy company has reviewed a number of the Fund’s controls and the results are being analysed by officers.

·  NR05 – Failure to manage personal data per regulations. The volume of personal data which the Fund manages – coupled with risks of data leakage – keeps this risk within the top five.

·  NR10 - Failure to earn investment returns as per Funding Strategy. This remains top priority due to the critical impact on employers’ contributions into the Fund.

Steve Harman asked whether the Pensions Dashboard, given the level of work required surrounding it, should have its own separate risk.

The Governance & Risk Advisor replied that this was covered by risk NR01. She added that she would discuss the proposal further with other members of the team.

The Board RESOLVED to note the report.

The purpose of this report is to receive regular governance updates as well as Training and Work Plan issues from the Board and request high level training needs from Board Members.

The Governance & Risk Advisor introduced the report to the Board and highlighted the following areas from it.

Hyman’s LGPS Online Learning Academy (LOLA)

The SAB’s Good Governance Review & TPR’s General Code of Practice include additional knowledge and skills requirements for Committee, Pension Board and Officers. Hymans Robertson have been working with the SAB to develop these requirements and have produced an LGPS Online Learning Academy (LOLA).

The full timetable for completion of all modules is contained in Appendix 2.

Workshops (to be jointly held with the Pensions Committee)

26th September 2024 - TPR General Code of Practice

24th October 2024 - Interim Valuation Results

TBC - Pensions Dashboard

The Head of Pensions said that once the Fund’s Process Review had been completed that the Board should receive a briefing.

The Governance & Risk Advisor replied that officers were considering holding a separate workshop regarding this in November.

The Board RESOLVED to:

i) Note the workplan & training plan for 2024/25

ii) Note the dates for future meetings.