Agenda item

The Chair reported that he and David Yorath had attended the CIPFA LGPS Local Pensions Board Conference on 28 June. The conference was attended by representatives of 40-50 Local Pension Boards. Speakers included representatives of CPLG, TPR, the Pensions Ombudsman, the Chairman of the National Scheme Advisory Board and leading consultants and advisors. Overall there is a better understanding of the purpose and role of LPBs. There are, however, significant variations in the way LPBs are working. Some perform an oversight and scrutiny function, as the Avon LPB does. Some are carrying out project management functions; the appropriateness of this kind of involvement in operations was queried by most attendees. He said he thought that the Avon LPB had got the balance right. He had some PowerPoint slides which he could circulate to Members. There had been a particularly useful presentation by TPR explaining their key priorities: governance, data and record keeping (including GDPR), cybersecurity and internal controls (including the issue of recordable breaches v. reportable breaches) and member communications (in particular Annual Benefit Statements). TPR also outlined some future areas they would examine: GMP reconciliation, the LGPS Dashboard (focussing on comparative administrative performance), academies and asset pooling.

There were varying approaches to indemnity insurance for members by LPBs. Some had taken out specific insurance for members, others had not. Bob Holloway, a former DCLG employee who was now advising the LGA, had expressed the view that as Local Pension Boards are not Local Authority Committees it is unlikely that LPB members are covered by Local Authority indemnity insurance policies. This was contrary to the advice previously given to Bath and North East Somerset Council, and he had raised the issue with the Head of Audit West.

A Member suggested that the risk for Board Members was very low, since the Board did not take executive decisions or make policy. The Chair replied that he could see two possible scenarios where a Member could incur a financial penalty in respect of their membership of the Board. The first would be a fine by TPR for the failure of the Member to carry out their statutory duty. The second would be a class action by a group of scheme members against the Member. He was aware that the members of some Funds were active in monitoring the performance of their LPBs.

The Head of Audit West said the issue would be revisited, if Members so wished, and funds could be made available for the purchase of indemnity insurance for Members, if this appeared necessary. Members agreed that minimum cover should be sought for APF LPB Members as is being pursued for the Wiltshire Fund LPB.

The Chair of the National Scheme Advisory Board had exhorted LPB members to participate in the survey given on agenda pages 45-47. The NSAB Chair had also exhorted LPB members to support the NSAB’s cost transparency code and to encourage their fund and asset managers to implement the code.

He reported that the Administering Authority of the Barnet Pension Fund had been fined £1,000 by TPR for failing to make an annual statutory return despite several reminders and attempts to engage with them. The Chair stated this was the start of the TPR taking a more proactive approach to enforcement in the LGPS.