Agenda item

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

·  All LGPS funds in the Brunel Pensions Partnership have now considered their business cases and signed these off.

·  The project has now separated into the company and client sides.

·  A Chair and an interim Managing Director has now been appointed.  Other appointments have also been made to the company side.

·  There is now a focus on the legal documentation which will be reviewed by both chief legal and chief finance officers of the sponsoring bodies and then signed off.  The company will then be brought into existence in July and officers can formally be appointed to its structure.  These roles will be filled over the coming months.

·  Appointments to the Brunel company posts will then be made, although there will not be automatic TUPE transfers.

·  Over the next 2 years assets will be transferred from the Avon Pension Fund and there will be some twin-tracking of activities at first.  HR are currently working on an 18 month transition process.

·  A favoured site for the Brunel company premises has been identified in Bristol and systems and support arrangements are currently being considered.

·  There has been some delay in appointing non-executive directors due to the need to ensure the correct balance of people and skills.

·  Good progress has been made but there is still a lot of company set up and fund transition change management work to be carried out.

Members then asked questions regarding the project as follows:

Q.   Are any changes expected to the project following the general election?

A.   No changes are expected.

Q.  Is remuneration a matter for the shareholders?

A.  The Brunel shareholders are the 10 pension funds.  The company will require shareholder approval for some actions and decision making will require a 75% majority of shareholders.  The Oversight Board will first review issues and then make recommendations to the shareholders as necessary.

Q.  Where do the Committees and Local Pension Boards fit into the overall structure?

A.  An organisational structure chart will be brought to the next Board meeting.

Q.  What will the mechanism be for tracking cost savings?

A.  Investment officers are currently looking at this.  There are new standards of reporting and disclosure.  The Oversight Boards will have some responsibility for tracking costs and savings as will the national Scheme Advisory Board and DCLG.  The Board requested further details on how the future external auditing of the fund would take place after pooling commences in 2018.

Q.  What arrangements will be in place to provide assurances to funds that portfolios are within agreed investment strategies regarding low carbon target commitments and remain complaint?

A.  Funds are signed up to common investing principles and Avon Pension Fund staff will look at this.

Q.  How will reporting take place?

A.  The company will report to the Oversight Board and investment and strategy information will still be reported to the Pension Board.  There will be 10 investment strategies delivering to 10 pension funds, although there is a good deal of commonality between them.

RESOLVED: To note the update regarding Project Brunel and that a future Board meeting will receive a briefing on the proposed future governance framework of the Avon Pension Fund and Brunel Pensions Partnership.