Agenda item

The Head of Business, Finance and Pensions introduced the report. He said that 2016/17 had been an extremely challenging year with an unprecedented level of work, which included the Valuation, developing the Brunel Pension Partnership and setting the Brunel company, introducing a new IT system, and developing the LDI and SRI policies. The implementation of a new structure for Pensions staff was now being completed. The Brunel project and its impact on the operation and governance arrangements of the Fund would be the main priority for 2017. There was work on reporting and performance, and on communications with employers and members. Work would continue on the implementation of the IT strategy. There were also a number of tasks on the investment side, including the review of the strategic allocation.

A Member noted the big increase in members reported in the table on agenda page 95 and said that this was at first sight puzzling, because most employers in the Fund were shedding staff. The Investment Manager replied that there had been an increase in part-time staff.

A Member asked whether it was possible to state the costs of Project Brunel and the Fund’s administration and investment costs more clearly. The Head of Business, Finance and Pensions replied that the restructuring of the Administration Team had been a top priority because of the number of employers now in the Fund. It had now nearly been completed. On the investment side, the impacts of Project Brunel had to be worked through and thought given to the structuring of strategic support to the Committee in the future. As soon as the picture became clearer, the Committee would be updated.

A Member said that data improvement was critical, particularly now that the new career average scheme was operational and that TPR was putting so much emphasis on it; she hoped that progress would be maintained. The Head of Business, Finance and Pensions responded that the Fund did have a training programme for employers. One key difficulty was the turnover of staff dealing with pensions within the employers; employers had to be persuaded to maintain their own training programmes. Some employers were facing resource challenges. The ultimate sanction of reporting employers to TPR was being held in reserve for the time being, but there would be continuing emphasis on communicating to employers the importance of providing correct data.

A Member asked which IT projects would impact this year. The Head of Business, Finance and Pensions replied that the Fund’s software supplier, Heywood, was reviewing the employer self-service package and was building a new product. It was expected that a test package would be available this year. There was also a rebuild of the payroll system, which allowed better task management and workflow facilities. Implementation was planned for the summer. This work has been postponed from the end of last year, because Heywood wanted to subcontract some of the work to other specialist software firms.

In response to questions from a Member, the Investment Manager explained that Governance Costs included the cost of independent investment advice and that the cost of the valuation was included in Compliance Costs. The reason for the fluctuation in the Independent Members’ costs was that the term of appointment for one of the Independent Members would expire this year and so included recruitment costs.

RESOLVED to approve the 3-Year Service Plan and Budget for 2017-20 for the Avon Pension Fund.