Agenda and minutes

Local Pension Board
Wednesday, 23rd January, 2019 10.00 am

Venue: Chamber, Civic Centre, Hanbury Road, Pontypool NP4 6YB

Contact: Geraint Thomas  Senior Business Support Officer - Democratic Services

Items
No. Item

1.

Attendance and apologies / Croeso ac ymddiheuriadau

Presented By: Chair

Minutes:

1.1       Apologies were received from Jane Waters.

2.

Declarations of interest / Datganiadau o fuddiant

Presented By: Chair

Minutes:

2.1       The CLO asked the Board Members to confirm their personal interests in the Greater Gwent Pension Fund.

 

Board Member

In Receipt of Pension

Contributor

Bob Campbell

Self

 

Steve Harford

Self

Sister

Ian Reese

 

Self

Clive Rogers

 

Self

Meirion Rushworth

 

Self

Anthea Wellington

Self and husband

Self and daughter

John Wright

Self and wife

Daughter

 

2.2       Bob Campbell reminded everyone that Board Members were required to leave Pensions Committee meetings during exempt items, and requested that this was re-considered as not all local authorities took this approach, such as Powys County Council.

 

2.3       The CLO reminded the Board that the HoP undertook an exercise around this issue in recent years and the Torfaen position required Board members to leave Pensions Committee meetings during exempt items, as they were effectively members of the public. He explained that Committee members were required to leave Pension Board meetings during exempt items, unless the Board requested their presence.

 

2.4       The CLO and the HoP reminded Board members that they were given access to all of the information presented to the Pensions Committee; however they received their copies of exempt items at a later date than the Committee. The CLO believed that the Torfaen policy was clear and straightforward and the HoP added that any decision around this matter would need to fit in with Torfaen County Borough Council’s Constitution.

 

2.5       Anthea Wellington suggested that the Pension Board was unique to Torfaen’s other committees with different legislative context, and Steve Harford stated that Board members should be able to witness how the Committee arrived at its decisions in terms of exempt items, from a governance perspective.

 

2.6       The Chair requested that the CLO and the HoP revisited Torfaen’s position around Board members’ attendance during exempt items of the Pensions Committee and report back to a future meeting of the Pension Board.

 

2.7       The CLO left the meeting.

3.

Minutes 24/10/18 / Cofnodion 24/10/18 pdf icon PDF 423 KB

Presented By: Chair

Minutes:

3.1       It was agreed that the minutes were an accurate record of the meeting.

4.

Action Sheet / Taflen Weithredu pdf icon PDF 179 KB

Minutes:

4.1       The Pension Board noted the Action Sheet.

5.

Pensions Committee 14/1/19 / Pwyllgor Pensiynau 14/1/19

Minutes:

5.1       The Pension Board considered the agenda papers for the Pensions Committee held on 14th January 2019:

 

5.2       Agenda Item 5 – Quarterly Investment Performance Report to 30/9/18

The HoP provided the following update:

  • The format of the report was different to previous reports, as the requirements regarding reporting had started to change, as had the services provided by the Fund’s Custodian.
  • The overall absolute returns for the Fund were +1.17% for Quarter 3 and +5.85% over the last year.
  • At the end of September 2018, the value of the Fund was £2,962 million; however this dropped to approximately £2,720 million at the end of December 2018. Since the turn of the year the value of the Fund had increased by £60-70 million.
  • Turbulence could be seen in the marketplace, particularly due to geo-political issues.
  • Paragraph 6.2 of the report highlighted the diversification of the Fund’s investment asset class allocations and the fact that £90 million was moved from Equities to Alternatives prior to Quarter 4 provided some protection as Equities fell in Quarter 4.
  • As shown in paragraph 6.3 of the report, BlackRock was still the dominant player in terms of the Fund’s investment managers, with 65%; however this figure had since reduced by 12% and would reduce further due to the Wales Pension Partnership (WPP).
  • Returns varied greatly across the Fund’s asset classes, hence the need for diversification in investments.
  • In terms of individual manager performance, Fidelity Emerging Markets Fund had underperformed; however more concern and scrutiny existed around Standard Life.
  • Appendix 1 gave more detail around trade issues, US rates and issues across Europe.
  • October 2018 had been pretty poor for markets generally and Quarter 4 saw overall fund values drop by approximately 8%; however some market correction had taken place since.

 

5.3       Following questions from the Board, the HoP made the following points:

  • As of December 2018, 26% of the Fund’s asset allocation was in UK Equities, which was down from 28.5% in September 2018.
  • The final £30 million to be moved out of Equities had been delayed by the HoP due to timing issues around the currently volatile markets.
  • The Fund had not made any fundamental change to its approach to asset allocation, with 3% recently moved from Equities into Alternatives. He added that another 3% being moved from Equities into Alternatives would see the Fund achieve its target of 70% in Equities.
  • At the time of the Actuarial Valuation, the Pensions Committee could consider a fundamental change to the Fund’s approach to asset allocation. Conversations around this possibility had already started with the Fund’s Actuary.

 

5.4       Agenda Item 6 – Wales Pension Partnership; Joint Governance Committee Deputising Arrangements

The Chair confirmed that the Pensions Committee agreed to the appointment of Councillor Joanne Gauden as the Fund’s nominated representative to deputise in the absence of the Chair of Pensions at meetings of the WPP Joint Governance Committee (JGC).

 

5.5       Agenda Item 7 – Wales Pension Partnership; Stock Lending

The HoP provided the following update:  ...  view the full minutes text for item 5.

6.

Local Pension Board - Training to Meet Knowledge and Understanding Requirements / Bwrdd Pensiynau Lleol - Hyfforddi i Gwrdd â Gofynion Gwybodaeth a Dealltwriaeth pdf icon PDF 500 KB

Additional documents:

Minutes:

6.1       The HoP provided the following update:

  • Hymans Robertson had for the first time in recent months undertaken a national assessment of confidence across the Local Government Pension Scheme (LGPS) funds. This was due to the growing requirement that committees and boards had appropriate knowledge and understanding to demonstrate strong leadership and manage their funds.
  • The most confident topics and least confident topics across committees and boards could be seen on page 45 of the agenda.
  • Hymans Robertson was delighted with the 8 responses from Torfaen (4 from the Pensions Committee and 4 from the Pension Board), as some funds did not respond.
  • Due to the above response rate, the Fund was able to start a self-assessment of its further training needs. Appendix 4 highlighted the Torfaen specific results of the national assessment.
  • Paragraph 6.2 of the report outlined the areas that the Fund could consider further training and it provided an opportunity for joint training, involving the Pensions Committee and Pension Board.
  • Hopefully the Pensions Committee and Pension Board would demonstrate an improved confidence by the next assessment, following more training and awareness sessions.

 

6.2       The Chair agreed that as 4 of the 11 Board members had completed the assessment this provided a good basis for developing training and awareness sessions; however he hoped that more Board members would complete the assessment in future.

 

6.3       The Board agreed that joint training with the Pensions Committee was preferable, particularly around ‘Pensions Accounting and Audit Standards’ and ‘Procurement and Relationship Management’.

 

6.4       Meirion Rushworth suggested that the Board could undertake specific reviews into areas of the Fund, and training would help with this potential role.

 

6.5       John Wright stated that the knowledge and understanding of the Pensions Committee and Pension Board would fluctuate over time, due to changes in membership. The HoP agreed and added that focus on certain areas could leave knowledge gaps in other areas, depending on priorities.

 

6.6       Anthea Wellington left the meeting.

 

6.7       Following a request from Ian Reese, the Chair asked the HoP to update Board members around the structure of the Pensions Department, particularly in light of recent personnel changes.

 

6.8       Steve Harford suggested that an increased understanding of the audit process around the Fund would be helpful, including internal audits. The HoP explained that two internal audits were taking place during the current quarter around administration and governance statements. The Chair requested that these internal audits were reported at a future meeting of the Pension Board.

7.

Any other business / Unrhyw fater arall

Minutes:

7.1       In response to a question from Ian Reese regarding Cost Transparency Code templates, the HoP confirmed that a lack of consultation had occurred regarding central government’s expectations in this area and as a result the Fund was entirely unclear as to what was expected and what it needed to report. He added that the Fund was also awaiting information around changes to the Benefits Regulations, as nothing had been received from central government.

 

7.2       The HoP confirmed that some information around Cost Transparency Code templates may be available via investment managers; however the Fund probably needed to undertake some work in this area, despite the lack of information from central government.

 

7.3       Steve Harford asked how many admission agreements existed between the Fund and its contributing bodies, and whether they were published. The HoP explained that certain bodies outside of local authorities required admission agreements and there were just over 50 for the Fund. He added that the agreements would vary in structure and content, depending on when the organisations signed up and the current legal template was being restructured by Eversheds. The HoP confirmed that the agreements provided fundamental safeguards to the Fund and its finances. The HoP agreed to supply Board members with more detail around the agreements and the publishing requirements.

 

7.4       Steve Harford asked a question regarding refunds under previous schemes, as he believed that one was due in 2019. The HoP agreed to liaise with the Pension Manager around this query and supply Board members with his findings.

8.

Date of next meeting 24/4/19 / Dyddiad y cyfarfod nesaf 24/4/19

Presented By: Chair

Minutes:

8.1       The next meeting of the Pension Board will be on Wednesday 24th April 2019.

9.

Exclusion of Press and Public / Gwahardd y Wasg a'r Cyhoedd

To agree the exclusion of the press and public from the meeting as presentations and meeting papers are not for publication because in accordance with paragraphs 12 and 14 of part 4 of Schedule 12a of the Local Government Act 1972 (as amended by the Access to Information Variation Order Wales 2007), it contains information about a particular individual and information relating to the financial and business affairs of particular persons including the Council and in all the circumstances of the case the public interest in maintaining the exemptions outweighs the public interest in disclosing the information.

 

Cytunogwahardd y wasg a'r cyhoedd o'r cyfa rfod gan nad yw cyflwyniadau a phapurau cyf arfod i'w cyhoeddi oherwyddyn unol â pharag raffau 12 a 14 o Ran 4 o Atodlen 12A Deddf Llywodraeth Leol 1972 (fel y'i diwygiwyd gan OrchymynMynediad i Wybodaeth (Amrywiad) Cymru 2007), ei fod yn cynnwys gwybodaeth am unigolyn penod ol a gwybodaeth ynymwneud â materion aria nnol a busnes unigolion penodol yn cynnwys y Cyngor a than holl amgylchiadau'r achos, maelles y cy hoedd o ran sicrhau'r eithriadau yn gorbwyso'r budd i'r cyhoedd yn nhermau datgelu'r wybodaeth.

Minutes:

9.1       The Board agreed to the exclusion of the press and public from the meeting as presentations and meeting papers were not for publication because in accordance with paragraphs 12 and 14 of part 4 of Schedule 12a of the Local Government Act 1972 (as amended by the Access to Information Variation Order Wales 2007), it contained information about a particular individual and information relating to the financial and business affairs of particular persons including the Council and in all the circumstances of the case the public interest in maintaining the exemptions outweighs the public interest in disclosing the information.

 

9.2       Items 10 to 13 were exempt from the press and public.

 

9.3       The Pension Board requested that Cllr Glyn Caron remained in the meeting in order to contribute to agenda item 13.

10.

Exempt Minutes 24/10/18 / Cofnodion Eithriedig 24/10/18

11.

Exempt Minutes of the Pensions Committee 10/9/18 / Cofnodion Eithriedig y Pwyllgor Pensiynau 10/9/18

12.

Ongoing Monitoring Of Performance For Multi-Asset Funds / Monitro Cyfredol o Berfformiad ar gyfer Cronfeydd Aml-Ased

13.

Wales Pension Partnership Update / Diweddariad ar Bartneriaeth Pensiynau Cymru