Agenda item

The Investments Manager updated Members.

Pensions Board

The final Regulations were currently expected to be issued in January 2015. The latest draft regulations allowed councillors, other than those already involved in pensions administration, to be members of a Pensions Board. The Pensions Advisory Board had issued draft guidance, which did not fully clarify a number of issues, probably because they were issues on which employers and the unions were still not in agreement. Local Pensions Boards have to be established by 1^st April 2015 and hold their first meeting by 31^st July 2015. The draft terms of reference and constitution of the Avon Pension Board will be considered by B&NES Council at its January meeting, after which the appointment process will begin. The establishment of the Board is being managed by B&NES’ Strategic Director of Resources.

A Member asked whether the unions could be given a copy of the papers that will be going to B&NES Council, since it was a legitimate matter of interest for them as there would be union representatives on the Board. The Head of Business, Finance and Pensions said that it was up to the Strategic Director of Resources whether the papers could be provided to the unions. The regulations allowed some flexibility in the way Pensions Boards were constituted and he understood that funds were taking different approaches to employee representation; some might not involve the unions. The Chair suggested that the unions write to the Strategic Director of Resources requesting the papers. The Vice-Chair suggested that the unions could also register to make a statement at the January Council meeting.

LGPS Investment Arrangements

Nothing had been heard about collective investment vehicles (CIVs). The latest information was that the DCLG was not in favour of compulsory use  of CIVs. The decision rested with the Cabinet Office, and no decisions were expected before the General Election.

Budget Changes

The Budget allows increased flexibility for employees to transfer their pension pots. Advice from the Government Actuary was awaited as to how this would happen in LGPS. There would be guidance on pension fund members having to take appropriate advice about transferring their pensions. The Fund would have to make a judgment about whether a member requesting a transfer had received advice from an approved body, but there is still uncertainty as to the Fund’s responsibility as to  whether the member received correct advice or not.

The Vice-Chair said he was concerned about how the Fund would be able to judge whether advice provided to members in such circumstances was independent and sound. There was a possibility that more vulnerable employees could be the victims of less scrupulous advisors. The Investments Manager said the requirement would actually not specify “advice”, but that certain bodies would be authorised to provide this “guidance”. The government has appointed a number of organisations, including the CABx, to provide pensions guidance. Kite marks will be issued to bodies approved to issue pensions guidance. If approved guidance had not been obtained, the Fund would not be able to allow the transfer. The Chair asked for a report to be made to the Committee proposing a procedure that the Fund would follow in such cases.

Amendments to LGPS 2014

The Pensions Benefits Manager reported that the DCLG had recently issued draft regulations tidying up details of the LGPS 2014. The Fund would be responding. The Code of Practice from the Pensions Regulator was still awaited.

RESOLVED to note the update.