Agenda and draft minutes

Venue: Virtual Meeting - Zoom - Public Access via YouTube https://www.youtube.com/bathnescouncil. View directions

Contact: Mark Durnford  01225 394458

Items
No. Item

1.

WELCOME & INTRODUCTIONS

Minutes:

The Chair, members of the Board and officers introduced themselves.

2.

APOLOGIES FOR ABSENCE

Minutes:

Pete Sloman (Employer Representative) and David Yorath (Member Representative had sent their apologies to the Board.

3.

DECLARATIONS OF INTEREST

At this point in the meeting declarations of interest are received from Members in any of the agenda items under consideration at the meeting. Members are asked to indicate:

 

(a) The agenda item number in which they have an interest to declare.

(b) The nature of their interest.

(c) Whether their interest is a disclosable pecuniary interest or an other interest, (as defined in Part 2, A and B of the Code of Conduct and Rules for Registration of Interests)

 

Any Member who needs to clarify any matters relating to the declaration of interests is recommended to seek advice from the Council’s Monitoring Officer or a member of his staff before the meeting to expedite dealing with the item during the meeting.

Minutes:

There were none.

4.

TO ANNOUNCE ANY URGENT BUSINESS AGREED BY THE CHAIR

Minutes:

There was none.

5.

ITEMS FROM THE PUBLIC

At the time of publication no notifications had been received.

Minutes:

There were none.

6.

ITEMS FROM MEMBERS

At the time of publication no notifications had been received.

Minutes:

There were none.

7.

MINUTES OF PREVIOUS MEETING - 28TH NOVEMBER 2019 pdf icon PDF 92 KB

Minutes:

The Board approved the minutes of the meeting held on 28th November 2019 as a correct record.

8.

LGPS Regulatory Update pdf icon PDF 84 KB

The purpose of this report is to update the Board on the latest position concerning the Local Government Pension Scheme [LGPS] and any proposed regulatory matters that could affect scheme administration.   

Additional documents:

Minutes:

The Technical & Compliance Advisor introduced this report to the Board, a summary is set out below.

 

HMT Public Sector Exit Payments Cap / MHCLG Consultation on Further Reform to Exit Payments

 

The government first consulted on plans to cap exit payments in the public sector in 2015 and subsequently launched a further consultation in April 2019.

 

·  A maximum exit payment of £95,000 which was to apply to a wide range of public sector employers, however, excluding some LGPS employers such as Universities and Colleges.

 

·  The cap was to include the value of any early retirement strain costs payable as a result of the exit.

 

In July 2020, the Government published its response to this consultation, confirming their intention to proceed with the implementation of the cap which remained set at £95,000 with no intention for this amount to be index linked going forward.

 

On 7 September 2020, MHCLG launch their own consultation on the changes

required to the LGPS regulations to accommodate the cap, but also proposals for further reforms to exit payments for the LGPS only, which are:-

 

·  The actual pay used in severance calculations will be limited to £80,000;

·  The maximum severance (including statutory redundancy pay) will be limited to 3 weeks’ pay per year of service or 15 months’ pay, whichever is the lower

·  The amount available for any strain cost will be reduced by the statutory

redundancy payment in all cases

 

On 15 October 2020, the regulations to implement the £95k cap, across the whole of the public sector, were signed and came into force on 4 November 2020. However, the LGPS amendment regulations required to implement the £95k cap are not likely to be implemented before 2021.

 

This leaves us in a position of legal uncertainty from the 4 November 2020 until such time as the LGPS amendment regulations come into force.  This is due to the discrepancy between the obligations on scheme employers under the £95k Cap Regulations to limit exit payments, including pension strain, to £95,000 and the requirement for administering authorities to pay a fully unreduced pension to a scheme member who is made redundant over the age of 55 under existing LGPS regulations.

 

In Oct 2020, a letter was sent from Luke Hall, the Local Government minister, to all LGPS administering authorities recommending a course of action to take in the interim period.  The Scheme Advisory Board also published its legal advice together with a commentary for LGPS administering authorities and scheme employers. APF are currently obtaining legal advice on the best course of action to take in the interim period and we have also been in talks with the Actuary regarding strain cost factors and await their formal recommendation on any changes required to the factors used to calculate pension strain.

 

The Chair asked if there were any governance issues for the Board to consider.

 

The Head of Business Finance & Pensions replied that each employer would have to set their own policies to take account of these changes and therefore  ...  view the full minutes text for item 8.

9.

Fund & Employer Performance pdf icon PDF 99 KB

The purpose of this report is to inform the Pension Board of the performance for Fund Administration for the period up to 30th September 2020 and actions undertaken following the Coronavirus outbreak and UK lockdown on 23rd March 2020.

Additional documents:

Minutes:

The Pensions Manager introduced this report to the Board, a summary is set out below.

 

With the UK lockdown in place from 23rd March, the initial response from the Fund was focussed on communications, ensuring all staff officers had capability to undertake business operations remotely from home.

 

Direct engagement with all key employers was established and is ongoing to review and monitor business as usual capability. All other employers have been surveyed to establish BAU capabilities with no significant issues being reported.

 

Fund Performance against SLA – KPI’s

 

Targets were being met in the main on the following three categories: Retirement (from Active), Retirement (from Deferred) and Deaths.

 

The Chair commented that he thought that the target of 10 days for Transfers In / Out was quite demanding. He asked for any comments on this matter.

 

The Pensions Manager replied that some cases can be complex and can take time to review.  The timely progress of transfer cases can be adversely impacted where information is required from an external third party.

 

Helen Ball asked what percentage of people use the self-service model for enquiries.

 

The Pensions Manager replied that he believed it was around 30% and that they were looking to increase usage where possible.

 

APF Completed Cases - Performance against Statutory Legal Deadline

 

Figures in this respect were really good on the whole. Only Transfers In / Out were not flagged Green and this was partly due to the delay in printing and posting requirements as officers had to arrange to go into the office to complete this.

 

The Chair asked how recruitment into the service was going.

 

The Pensions Manager replied that a three phase recruitment plan was ongoing and that this would help as the Administration Team were currently down by 11 posts.

 

The Head of Business Finance & Pensions added that there was a difficulty in finding and retaining staff and that he felt whilst working under current restrictions a drag on performance would remain.

 

Steve Harman asked if a general view of how staff are feeling about working at home could be given.

 

The Pensions Manager replied that he felt that it had affected performance but was pleased to report that overall sickness had not increased. He added that he felt the longevity of the situation was taking its toll on staff mental health and wellbeing.

 

Steve Harman asked for the Board’s appreciation of their work to be fed back to staff.

 

The Board RESOLVED to note the Fund and Employer performance for the three months to 30th September 2020.

10.

Statutory Annual Requirements pdf icon PDF 83 KB

The purpose of this report is to inform the Pension Board of the actions undertaken by the Fund Administration in completion of the 2019/2020 employer year end data exercise and statutory annual benefit statement exercise.

Minutes:

The Pensions Manager introduced this report to the Board, a summary is set out below.

 

The introduction of the Pensions Act 2013 extended the powers of the Pensions

Regulator (TPR) to public sector schemes from 1 April 2014. The Pension

Regulator introduced the Code of Practice 14 for the administration of public

sector schemes in 2015. This, amongst other things, addressed the issue of

annual benefit statements to members.

 

In preparation the Fund must undertake an annual exercise to reconcile member data supplied by employers at each 31st March year end. There are 432 active employers of which 269 provide member data digitally to the Fund on a monthly basis. The remaining 163 employers continue to provide data annually.

 

For the purpose of data accuracy, the digital monthly employer returns undergo a reconciliation process on a continuous basis. Where the employer annually

submits a data return it invariably will require further scrutiny and employer

engagement to reconcile. The Fund is aiming to digitalise all employer returns as part of its published Administration Strategy.

 

Officers completed work to reconcile data returns ahead of the statutory Annual Benefit Statements (ABS) exercise. Summarily, 94% of 36,189 active member statements were issued ahead of the 31st August deadline.

 

The Board RESOLVED to note the report.

11.

Breaches Log pdf icon PDF 89 KB

The purpose of this report is to update the Pension Board on the Fund’s Breaches Policy, procedure for recording & reporting breaches, training carried out for Teams and breaches recorded in the last year.

Additional documents:

Minutes:

The Governance & Risk Advisor introduced this report to the Board, a summary is set out below.

 

Regulatory breaches are breaches of the regulations or standards as set out in

the Administration Strategy and if Material need to be reported to the Pensions Regulator (TPR) as set out in the Breaches Policy. In addition to the requirement to report Material breaches to TPR, the Pensions Manager will formally report all breaches to the Avon Pension Fund Committee and the Pension Board on a quarterly basis.

 

5 Year Refund Cases

 

The 2013 LGPS regulations require schemes to pay a refund of contributions

within 5 years. Failure to complete payment is classified as a regulatory breach

and is required to be reported to the pensions committee and local pension

board. The National Technical Group has previously made a recommendation to the Scheme Advisory Board (SAB) to remove the requirements to pay a refund of contributions within five years under the 2013 regulations. The SAB have agreed to proceed with this regulatory change and are in the process of making recommendations to MHCLG.

 

A notifiable breach must be reported to the Information Commissioner’s Office

(ICO) within 72 hours after becoming aware of it. If it takes longer than this,

reasons for the delay must be provided.

 

All breaches must be reported to Banes Data Protection Officer (DPO) within 24 hours of the incident using the incident reporting template. The DPO will advise if the incident meets the criteria for reporting to the ICO and also makes

recommendations on future preventative actions.

 

Procedures are in place for staff to follow and regular training takes place to

ensure that everyone has a full understanding of data protection and the

reporting procedure for breaches.

 

Steve Harman commented that from looking at the Breaches Log it was hard to tell if these figures were good in comparison to other years or other Funds. He asked if in a future report this information could be included.

 

The Governance & Risk Advisor replied that the figures had been consistent across the last two years. She added that she would look to add the information requested into future reports.

 

The Chair asked if she could expand on the data breaches that occurred and the subsequent measures taken.

 

The Governance & Risk Advisor replied that only one incident had been reported to the Information Commissioner’s Office (ICO) in 2019 and that this had related to IConnect. She added that an employer had uploaded an extract and in doing so the first line of the address of 71 members had become incorrect.

 

She said that this incident led the Fund to set up the IConnect Team and the implementation of further controls.

 

She informed the Board that four incidents had been reported to Information

Governance in 2019. She explained that twice data was sent to an incorrect employer (Globalscape) and that twice data was sent to an incorrect member.

 

She said that a checking step had been added to the Globalscape procedure  ...  view the full minutes text for item 11.

12.

Risk Management pdf icon PDF 115 KB

The purpose of this report is to update the Pension Board with the new risk management process introduced in March 2020 and new risk register.

Additional documents:

Minutes:

The Governance & Risk Advisor introduced this report to the Board, a summary is set out below.

 

The risk management process has been reviewed and updated in line with

CIPFA guidance, with the introduction of a more robust process for identifying & managing risks. All risks have been reviewed and re-evaluated using a risk

evaluation form. Each risk has been allocated a risk owner to monitor the risk

and implement mitigation measures. The scoring system used is in line with the

B&NES corporate guidelines.

 

The Risk Register is reviewed every quarter by the pension management team.

All risks with a review date are re-evaluated using the evaluation form and

updates agreed and made to the risk register. Any new risks identified or

changes to any other risks are also considered and the necessary amendments

made.

 

She confirmed that both the introduction of the exit payment cap (R53) and Brexit (R55) were on the Risk Register.

 

The Board RESOLVED to note the report.

13.

Pension Board - Workplan & Training Plan pdf icon PDF 109 KB

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

Additional documents:

Minutes:

The Governance & Risk Advisor introduced this report to the Board, a summary is set out below.

 

In developing a training plan Board Members should reflect on their own

statutory requirements as set out in previous reports. In summary, Board

Members should have a breadth of knowledge and understanding that is

sufficient to allow them to understand fully any professional advice the Board is

given. They should also be able to challenge any information or advice they are

given and understand how that information or advice impacts on any decision

relating to the Board’s duty to assist the Avon Pension Fund.

 

In developing a work plan the Board should reflect the need to maintain a

balance between building the knowledge and understanding of Board Members

along with delivery of the statutory obligations of the Board.

 

Helen Ball commented that she had attended a number of courses / forums throughout the year and that a lot of information had been gained through good questioning at these sessions. She added that the informal Board sessions had also been useful.

 

The Board RESOLVED to note the report and recommends high level training needs through 2020/21.