Agenda item

The Head of Business, Finance and Pensions updated the Board regarding Project Brunel.  The following issues were covered in the update:

·  At the full Council meeting held on 14 February 2017, cross party support was given to enter into investment pooling with respect to the Avon Pension Fund.  The remaining authority to consider this issue was Wiltshire Council who would meet next week.

·  The Council had agreed to delegate authority to the Head of Business, Finance and Pensions, Chief Legal Officer and Section 151 Officer to undertake such tasks as they think were appropriate to progress implementation of investment pooling.  The project was therefore moving forward.

·  The position of the role of Chair to the Brunel Pension Partnership had now been advertised and a longlist had been produced.  Once the Chair was in place a Chief Executive and other key board members would then be appointed.  The Oversight Board would consist of a both officers and councillors.

·  Preparatory work was also being carried out regarding the required contracts including setting up an organisation to oversee the transition.  There could be a single transition manager or a number of specialist managers. 

·  Confirmation had been received from the Pensions Minister for the project to go ahead.  Approval was now required from the Financial Conduct Authority (FCA). 

·  Funding of the project was also being considered and a contingency fund had been set up.  Remuneration for all parties was also being looked at and it was possible that this may be over and above the usual public sector pay scales.  However, it was felt that the benefits would outweigh any additional costs.

·  Governance and audit arrangements would also have to be confirmed.

·  Transition of assets also had to be considered and officers had made representations to the Treasury regarding assets as this would be a form of windfall tax (approximately £50m) for the Government.

·  Discussions were ongoing as to how individual funds would meet the cost of set up and transition.

·  The project was on track but there was a significant amount of legal and governance work still to be undertaken.

Members then asked questions regarding the project as follows:

Q.  What will the representation be on the Oversight Board?

A.  The Board will be made up of the Chairs of the 10 funds and an independent Chair.  Guidance from the Department of Communities and Local Government (DCLG) was awaited.  There would be one vote per fund which would avoid domination by any one large fund.

Q.  How would the Board have a voice on this project?

A.  The role of the Pension Board would be to comment on the robustness of the project including the appointment and recruitment process, monitoring of the contract etc and to act as a conduit for the voice of members and employers. 

Q.  Will there be real costs and savings?

A.  The bottom line would be the investment manager fees and in theory these should be lower.

Q.  Is best practice regarding efficiency and effectiveness being considered and shared with other funds?

A. The Brunel investment managers already meet on a regular basis and this project would provide an opportunity for more collaborative working.

Members noted that the Government required a 20 year plan to be produced and reported on.  Robust audit of the project and transparency would be essential. 

The Chair summed up by stating that the Pensions Board had no concerns regarding LGPS non-compliance.  He requested that a further report and briefing paper be brought to a future meeting giving details of the proposed governance framework to enable members to consider its efficiency and effectiveness.

He also requested that a report be prepared for a future Board meeting providing details of how future Brunel costs and benefits would be internally and externally audited.

The Head of Business, Finance and Pensions stated that verbal updates on the project would be provided in May and July.  The Pension Fund Committee would receive a governance report at its June meeting and this Board could also put forward comments.  He informed members that there a project implementation plan had been produced and that he was happy to share this with the Pensions Board at their November meeting. 

RESOLVED: To note the update regarding Project Brunel.