Agenda and minutes

Venue: Kaposvar Room - Guildhall, Bath. View directions

Contact: Mark Durnford  01225 394458

Items
No. Item

1.

EMERGENCY EVACUATION PROCEDURE

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

Minutes:

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

2.

APOLOGIES FOR ABSENCE

Minutes:

Helen Ball and David Yorath had sent their apologies to the Board.

3.

DECLARATIONS OF INTEREST

Minutes:

There were none.

4.

TO ANNOUNCE ANY URGENT BUSINESS AGREED BY THE CHAIR

Minutes:

There was none.

5.

ITEMS FROM THE PUBLIC

Minutes:

There were none.

6.

ITEMS FROM MEMBERS

Minutes:

There were none.

7.

MINUTES OF PREVIOUS MEETING: 23rd May 2023 pdf icon PDF 133 KB

Minutes:

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

8.

Brunel / Investment Update

The Board will receive a verbal update regarding this item.

Minutes:

The Head of Pensions addressed the Board. He stated that over the last 12 months the Fund’s performance has been -0.3% which he believed was slightly below the typical Local Authority benchmark. He added that this was mainly due to a 12% property allocation which has not performed well and gilts exposure.

 

He explained to the Board that the Fund has £5.4 billion worth of assets and that the funding level had improved to around 97% at 30 June 2023, as rising interest rates reduced the present value of future liabilities. Therefore, the Fund is in a strong, robust financial position.

 

He said that 86% of the Fund’s assets had now transferred to Brunel and that the remaining 14% was deemed difficult to transfer and were likely to be allowed to run off into Brunel over the next 3 – 4 years.

 

He informed the Board that the carbon intensity within the equity portfolio was 40% below the global benchmark. He added though that they were aware of resource constraints within Brunel, in particular regarding Private Markets and Local Impact Investing and that it was vital to have a structure in place to help them to attract the best talent.

 

He stated that in response to the Government’s consultation on pooling that they were broadly in favour of further pooling and would be presenting the Committee with three options later in the month before issuing the Fund’s formal response. He added though that the Fund was against being mandated to invest in specific asset categories and should maintain its investment freedom.

 

He explained that a Climate Review for the Fund was ongoing involving both Brunel and Mercer who were providing an analysis to set out options for the Fund. He added that the review would set out the trade offs to be considered, in particular, the pace of change on net zero -v- investment risk.

 

He said that Mercer have already advised that to attempt to achieve net zero by 2030 would mean that only 75 global stocks would be available to invest in and this would create a large concentration risk for the Fund.

 

He said that the analysis was due to be completed by the end of September, consultation with stakeholders would then take place during October & November, with a decision due to be taken by the Committee in December.

 

Alison Wyatt asked why only 75 investment options would be available to the Fund.

 

The Head of Pensions replied that the main reason was that if you analyse the value chain of these companies, there would only be this number that could claim to having an actual net zero impact on the planet.

 

Nick Weaver asked how much risk should be assigned to the Government’s consolidation proposals.

 

The Head of Pensions replied that he felt that there was a material risk to them mandating certain investments. He added however that he was sure that they would be receiving universal feedback that mandating in certain sectors is against the  ...  view the full minutes text for item 8.

9.

Pension Board Annual Report pdf icon PDF 71 KB

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

 

Additional documents:

Minutes:

The Governance & Risk Advisor introduced this report to the Board. She explained that a few amendments had been made following a draft circulation and a workshop discussion.

 

She stated that the Pension Board reports annually to Council on the work it has undertaken in the previous twelve months. She added that the report would be taken to Council on 17th November 2023 along with the Pension Committee’s annual report to Council.

 

Steve Harman thanked her for making the amendments as requested and said that he felt that the report now read a lot better.

 

Tony Whitlock asked if the links within the report would work when published.

 

The Governance & Risk Advisor replied that she believed they would as all the links are to public documents. She said that this would be checked prior to publication.

 

Claire Newbery added that the report could be viewed using a different browser to enable the links to work.

 

Alison Wyatt asked why the figure of £25,500 for Pension Board Recruitment had not been used and what actions were needed for that amount to be allocated.

 

The Governance & Risk Advisor replied that this amount had been allocated to the budget as potentially two recruitment campaigns for Board members could have been required. She added though that the current members had decided to extend their term of office.

 

She stated that primarily the costs would have been associated with advertising the posts and printing and mailing information to prospective members.

 

The Board RESOLVED to approve their 2023 Annual Report.

10.

Annual Review of Committee and Board Governance Arrangements pdf icon PDF 93 KB

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.

 

Additional documents:

Minutes:

The Governance & Risk Advisor introduced this report to the Board. She referred to Appendix 1 – Annual review of Pension Board Governance and said that it was good to see that the majority of the table was green.

 

She asked for member’s assistance in resolving those that had been identified as amber or red and highlighted the areas of Declarations of Interest forms and Training undertaken as matters to be completed.

 

She stated that there had been no changes to the Board’s Terms of Reference (Appendix 2) and that Appendices 3 – 8 had been approved by the Committee earlier in the year.

 

Alison Wyatt asked if the Scheme of Delegations was benchmarked against those of any other Local Authorities.

 

The Governance & Risk Advisor replied that it was not. She added that it is agreed by the Senior Management Team with this review taking place every year and then audited every 2 – 3 years.

 

The Head of Pensions said that he had compared the scheme with some within the private sector and said that they were broadly similar.

 

The Director, One West added that the scheme was in line with the Council’s general principles and has approval from both the Monitoring Officer and Section 151 Officer.

 

The Pensions Operation Manager assured the Board that various levels of checking do take place as part of the scheme.

 

The Member Services Manager explained that within the applications that are used as part of their work there are set levels so that only officers of a certain position can carry out such duties.

 

The Board RESOLVED to note the report.

11.

CIPFA Benchmarking pdf icon PDF 74 KB

The purpose of this report is to present to the Pension Board the results of the annual CIPFA Pensions Administration Benchmarking Club for 2022.

Additional documents:

Minutes:

The Governance & Risk Advisor introduced this report to the Board. She stated that the Fund had taken part in the exercise for the past 15 years as it had been seen as a useful process to carry out. She explained that they were aware that the participation of other Funds had been dropping and that they had taken the decision not to take part in the exercise in 2023 and to consider other options, including using the SF3 data, in relation to gathering information.

 

She highlighted the following areas from within the report.

 

Administration Cost Per Member

 

Previous Year (2020-2021)

£19.62

Average: £20.45

Difference to average: £0.83

 

Current Year (2021-2022)

£21.17

Average: £35.10

Difference to average: £13.93

 

Administration Cost Per Member (nearest neighbour in size)

 

Northamptonshire £26.51

Cambridgeshire £26.00

Cheshire £24.35

Staffordshire £23.47

B&NES £21.17

 

Administration Cost Per Member (nearest neighbour geographically)

 

Oxfordshire £42.69

Gloucestershire £26.72

Wiltshire £21.95

West Midlands £21.56

B&NES £21.17

 

Administration Cost Per FTE

 

Previous Year (2020-2021)

£48,000

Average: £67,042

Difference to average: £19,042

 

Current Year (2021-2022)

£44,723

Average: £70,591

Difference to average: £25,868

 

KPIs (Active Members)

 

KPI (15 days)

Previous Year (2020-2021)

Current Year (2021-2022)

Retirements (estimates)

76.8%, 726 cases within KPI

48.5%, 670 cases within KPI

Retirements (actual)

84.8%, 570 cases within KPI

81.4%, 770 cases within KPI

Retirements – process and payment

84.8%, 570 cases within KPI

81.4%, 770 cases within KPI

 

She said that officers were aware that the service was not quite where they want it to be and recognised that investment into it is required.

 

Steve Harman said that the report showed that it was clear that the admin function of the Fund is underinvested and that this needs to improve to enable its performance levels to rise.

 

Stuart Anstead asked if officers had assessed where the Fund would be if the Transformation Plan had been completed.

 

The Governance & Risk Advisor replied that this was not an exercise that had been carried out yet.

 

Nick Weaver commented that the use of SF3 data will still not be a perfect analysis and suggested that officers compare those figures with the Fund’s annual accounts.

 

The Board RESOLVED to note the report and the decision not to take part in the 2023 benchmarking exercise and instead look at alternative options.

12.

Administration Update pdf icon PDF 104 KB

The purpose of this report is to present the Fund’s administration performance for the three months to 30 June 2023 vs key performance indicators (KPI’s).

 

Additional documents:

Minutes:

The Pensions Operations Manager introduced the report to the Board. She emphasised that, whilst it remains a challenging time within the service, she wanted to recognise the work that has been carried out by the teams, particularly regarding the Year End Data.

 

She explained that demand for the service is increasing, with a high influx of calls and emails. She added that most processes within the service are still carried out manually.

 

She highlighted to the Board the following areas from Appendix 3 - Administration Service Improvement Plan update Q2 2023.

 

Key levers to improve people environment

 

• Improve salaries – Done

• Fill vacant positions - Started

• Leadership & communication – Ongoing

• Organisation, Training, Development, and Career Progressions – Ongoing

 

Payroll

 

Q2 UPDATE

 

·  Resourced with 3 full time officers (2 seconded) and 2 casual officers

·  Resilience & confidence in ability to maintain payroll services

 

OBJECTIVES

 

·  Fully resourced

·  Robust processes

·  MI on workflow – full transparency

 

ACTIONS

 

·  Review structure of payroll team

·  Maintain support from Members Services officers

·  Work on backlogs

 

Leaver process

 

Q2 UPDATE

 

·  Leaver team in position

·  Training rolled out to removed duplication of checking

·  Agile review of officer resource to support business needs

 

OBJECTIVES

 

·  No backlogs > 60 days

·  Meet TPR & regulatory requirements

·  Meet SLA targets set in Admin Strategy (CIPFA) agreed by Pensions Committee

·  Employers providing timely & accurate data

 

ACTIONS

 

·  Development of bulk digital processing underway

·  Streamline & digitalise 3 key processes

o Leaver

o Starter

o Post changes

·  Support & Development

o Employer training ongoing

o People training & upskilling ongoing

 

Management Information (MI)

 

Q2 UPDATE

 

·  New reports giving better oversight however further development required

·  MI being used to make weekly decisions with officer resource

 

OBJECTIVES

 

·  Reporting to support pro-active achievement of KPIs and SLAs

·  Agile reporting, weekly, monthly

·  Employer performance

·  Team productivity

 

ACTIONS

 

·  Ongoing review & development of weekly MI reports

·  Review of workflows to in-bed new reporting with new processes and responsibilities

·  Create, design, test and deliver new reports

 

Day-to-day and backlogs

 

Q2 UPDATE

 

·  Increase in outstanding cases due to increase in incoming cases

·  PI error cases c.1000 cases

·  Task force created to deal with increase in email traffic due to ABS campaign

 

OBJECTIVES

 

·  Fully resourced & trained team

·  No backlogs > 60 days

·  Self service & digital processes for members & employers

·  Satisfied members

·  Engaged workforce

 

ACTIONS

 

·  Weekly cross team meetings to discuss workloads & support

·  Operational focus on 2 key areas

o Retirements

o Death

·  Review options including outsourcing of PI error cases

 

She stated that the Board should not expect to see an improvement in the performance figures over the next two quarters. She added though that good progress was being made on the Service Improvement Plan.

 

Tony Whitlock asked how worried the Board should be with the current situation.

 

The Pensions Operations Manager acknowledged that they should be concerned, but that she would be more worried if there were no plan in place to follow. She added that there was a good management team in place who were focused on achieving better outcomes.

 

Steve Harman commented that he felt  ...  view the full minutes text for item 12.

13.

Workplan / Training Plan pdf icon PDF 86 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. She highlighted that a second version of the Hyman’s LGPS Online Learning Academy (LOLA) had been launched in July 2023. She explained that the training was split into a number of modules covering the CIPFA Knowledge & Skills Framework and there was a timetable for completion of all modules contained in Appendix 2.

 

The Board RESOLVED to:

 

i) Note the workplan & training plan for 2023/24

ii) Note the dates for future meetings.