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Agenda and draft minutes

Venue: Online Meeting

Contact: Ellen Ghey  01225 718259

Media

Items
No. Item

77.

Membership

To note any changes to the membership of the Board.

Minutes:

The following change in membership was noted:

 

·       Marlene Corbey would be appointed as a new member of the Local Pension Board, replacing Barry Reed as a Scheme Member Union representative, following confirmation of the appointment at the next meeting of Full Council on 20 October 2020.

 

The Chairman welcomed Marlene to the Board, and noted that Board member, Paul Smith, had completed The Pensions Regulator (tPR) toolkit training.

 

78.

Apologies

To receive any apologies for absence.

Minutes:

There were no apologies for absence received.

 

79.

Minutes

To confirm as a true and correct record the minutes of the previous meeting held on 6 August 2020.

 

The Board’s action log is also attached for members’ information.

Supporting documents:

Minutes:

The minutes of the previous meeting held on 6 August 2020 were considered, and it was:

 

Resolved

 

The Part 1 (public) minutes of the previous meeting held on 6 August 2020 were approved as a true and correct record, and the Board’s action log was noted.

 

80.

Declarations of Interest

To receive any declarations of disclosable interest.

 

Minutes:

There were no declarations of interest.

 

81.

Chairman's Announcements

To receive any announcements through the Chairman.

Minutes:

The Chairman reiterated the role of the Board as a non-decision-making body that seeks to support the Pension Fund in being compliant with legislation and regulations.

 

82.

Public Participation and Councillors Questions

The Council welcomes contributions from members of the public.

 

Statements

 

Members of the public who wish to submit a statement in relation to an item on this agenda should submit it to the officer named on this agenda no later than 5pm on Monday 12 October 2020.

 

Statements should:

 

·       State  ...  view the full agenda text for item 82.

Minutes:

There were no statements or questions from the public or Councillors.

 

83.

Minutes and Key Decisions of the Wiltshire Pension Fund Committee and Investment Sub Committee

To consider the Part 1 (public) minutes of the Wiltshire Pension Fund Committee on 24 September 2020. Minutes of the Investment Sub Committee attached under Part 2 of this agenda.

 

To note the outstanding audit report for the Fund’s Accounts.

Supporting documents:

Minutes:

The minutes of the Wiltshire Pension Fund Committee and Investment Sub-Committee held on 24 September 2020 and 10 September 2020 respectively were considered, and it was:

 

Resolved

 

The Part 1 (public) minutes of the Wiltshire Pension Fund Committee and Investment Sub-Committee held on 24 September 2020 and 10 September 2020 respectively were noted.

 

84.

Scheme, Legal, Regulatory and Fund Update

To consider a report providing an update on the latest Scheme, Legal, Regulatory and Fund developments for the Board’s information.

Supporting documents:

Minutes:

Andy Cunningham, Head of Pension Administration and Relations, updated the Board on the various Scheme, Legal, Regulatory and Fund developments.

 

Reforms to public sector exit payments were highlighted as being particularly challenging in respect of the proposed changes to the primary legislation. This meant that the Fund could be legally required to follow two pieces of legislation that contradicted one another for a period of time, in regard to the payment of exit and pension packages in line with the LGPS regulations. It was noted that as this was a national issue, and not one that just affected the Wiltshire Pension Fund, advice was being sought from the Scheme Advisory Board, LGA and MHCLG with updates and further information provided on a regular basis. It was noted that further clarity was needed to enable Fund officers to understand how best to administer the issues correctly and form subsequent operational actions to minimise the impact on scheme members. However, these issues were commented upon as being short term until the solution was formed.

 

In response to a question, officers clarified that the changes were twofold, with the first stage having been approved by Parliament. It was confirmed that once the legislation had been signed off then the changes would take 21 days to be applied and this 21 day ‘countdown’ would signify the start of the contradictory legislative position.

 

Members of the Board questioned the national impact and what actions could be taken by the Board to support the concerns already discussed, to which officers clarified that they were pursuing all options in regard to seeking advice from national pension bodies and putting appropriate policies in place. From an employer perspective it was noted that it was complicated for them to communicate with scheme members about the changes, and that timing in the short term was the biggest issue as organisations could be looking at redundancy exercises and this would cause a barrier to undertake such analysis due to the complexity of the legislative position. It was confirmed that officers were taking a cautious approach until more information was gleaned and were not providing any redundancy estimates to larger employers at present to mitigate the risk of providing incorrect figures.

 

After a question from the Chairman, Andy Cunningham confirmed that this topic would remain on this agenda item and would be brought forward to all future meetings until the issues were resolved. However, it was reiterated that once the reforms were fully in place and the transition phase settled, then business as usual would return in the long term.

 

Employer risk management was discussed, and it was noted that the Government had made changes that applied from 23 September 2020 and that the Fund needed to implement policy changes to reflect these (mainly to the Cessation Policy and Funding Strategy Statement). This had led to newly available options, notably employer contribution rates can change inter valuation as long as certain conditions were met, such as material changes in circumstances specific  ...  view the full minutes text for item 84.

85.

Training Update

To receive a brief report of Hymans online training platform and to remind members concerning the completion of the self-assessment questionnaire.

Supporting documents:

Minutes:

Richard Bullen, Fund Governance and Performance Manager, updated the Board on a new training and online development portal offered by Hymans Robertson.

 

Members were reminded to complete a self-assessment review that had been circulated that allowed them to provide officers with details of any training needs and strategy for 2021-22. Appreciations were also given to those members who had completed and returned their questionnaire.

 

Due to the COVID-19 restrictions preventing members from attending conferences, seminars and other events to aid in maintaining their current knowledge and understanding across topical pensions issues, alternative training methods had been considered. The online training platform from Hymans Robertson was noted as containing a broad range of subjects, with modules lasting approximately 10-20 minutes, at a cost-effective price. Members were asked to provide feedback on the subject and whether this proposal should be extended to members of the WPFC and Investment Sub-Committee (ISC). 

 

In response to a question from the Vice-Chairman, it was clarified that this portal would be as an addition to the existing member training assessments through the CIPFA Knowledge and Skills Framework and tPR toolkit. It was also noted by officers that this portal contained a module concerning the MiFID II requirements and would aid training for members of the WPFC and ISC alongside any additional training workshops and sessions held within the meetings.

 

One member of the Board stated that the ability to have different and innovative training tools on demand to facilitate in maintaining the level of education and skills necessary to understand the extent of complex historical and current pensions related topics and issues would be beneficial. The length of modules was also cited as being advantageous in consideration of maintaining a sensible work-life balance.

 

It was raised that unlike tPR toolkits there would not be any certifications for completion of the modules on the Hymans platform as the training would have a rolling element due to the continued introduction of newer modules. However, it was stated that there was a monitoring process involved which would produce a report of who had undertaken/completed modules which officers noted would be beneficial when gathering information ahead of the construction of future Local Pension Board Annual Reports and the Fund’s Annual Report and Accounts.

 

It was agreed by officers and members of the Board that in the event that the recommendations to the WPFC for all Committee members and substitutes to adopt the training platform was not approved, then members of the Board would still be signed up and would have access to the platform alongside certain Fund officers.

 

 

Resolved

 

1)    The Board unanimously approved their own use of this training platform.

2)    The Board unanimously recommended that the Committee members & their substitutes also adopt the introduction of this training platform for the next two years.

 

86.

Administering Authority Discretions Policy

To receive a brief report and review the changes to the Administering Authority Discretions Policy.

Supporting documents:

Minutes:

Andy Cunningham, Head of Pension Administration and Relations, introduced a report from officers that proposed amendments to four of the Fund’s regulatory discretions.

 

It was noted that the last time the Policy was updated and approved was in December 2015. In parts of the LGPS Regulations, the Fund was afforded discretion over how the rules of the Scheme operate, thus a degree of localised decision making was possible.

 

An employer had approached the Fund and requested a change to the Policy which officers agreed to bring forth to Board and WPFC, along with the other proposed changes, as part of a wider review. It was stated that the requested change was to mitigate a large financial issue for the employer; officers noted the need for the Fund to balance the protection of employers and the rights of members. The four discretions proposed to be changed were: acceptance of only certain ‘non-club’ transfers in; death grants; child pensions; and medical certificate requirements for APCs. It was clarified that the acceptance of any ‘non-club’ transfers in would be subject to agreement between the Fund and the employers on a case by case situation dependant on the context which meant in practice this restriction would be likely to affect only a small group of members.

 

It was confirmed by officers that the completed review report would be brought to the Board for feedback before being submitted to the WPFC.

 

Resolved

 

The Board noted the recently approved amendments to the Administering Authority Discretions Policy and the plans to undertake a further review either later in 2020 or early 2021.

 

The Board requested that the next update be brought to the Board first for comments before submission to Committee for approval.

 

87.

LPB Budget Monitoring

To receive a verbal update on the LPB year to date budget outturn.

Minutes:

Jennifer Devine, Head of Pension Fund Investments, delivered a verbal update on the Local Pension Board year to date budget outturn.

 

It was highlighted that due to the move to virtual working, there had been a significant travel and training underspend projected. Additionally, there was an underspend noted for consultancy charges which had not been used during the past financial year. Officers noted that although the underspend was projected as being relatively high, if the online training platform discussed in Item 9 was approved, the underspend figure would be lower.

 

88.

Board Insurance

To receive a verbal update on the LPB insurance cover.

Minutes:

Richard Bullen, Fund Governance and Performance Manager, delivered a verbal update on the Local Pension Board insurance cover.

 

It was noted that the Board’s insurance arrangement was put in place to protect the Board against certain claims and that this was due for renewal on 9 October 2020. Officers confirmed that they were liaising with insurance providers on the insurable interest and premium amounts, which were £2,500 plus VAT but it was noted that this would increase to £2,850 plus VAT, including commission.

 

Officers highlighted that the Scheme Advisory Board (SAB) was approached with regard to the need for insurance as the Local Government Association (LGA) had provided advice in the past and officers wanted to check that this legal advice had been updated with regard to Local Pension Board insurance requirements. It was noted that past advice stated insurance should be in place, but that this was during the inception of Local Pension Boards as there was uncertainty on how Boards would establish themselves. Officers had been informed by the SAB that the topic would be discussed in a meeting at the beginning of October 2020, with a subsequent survey intended to be circulated to all Boards for feedback. It was noted that officers were working alongside the Wiltshire Council insurance team and were exploring alternative providers to attain a more competitive insurance policy for the Board. Additionally, officers noted that the existing insurance provider had been approached to glean some more details surrounding their claims experience, but it could not be obtained as it was deemed commercially sensitive. Members were informed that the provider had offered an extension for the Board to allow for a decision to be made on how best to proceed.

 

The Chairman noted that the previous Chairman of the Board had felt insurance was needed to protect against the risk to members but that he felt that there was not an insurable risk due to the nature of the Board being a non-decision-making body. However, the Chairman noted his reluctance to terminate the cover as he felt it was inappropriate to do so unless all members of the Board agreed. It was noted that more information was needed before a final decision could be made. Officers noted that they had written to the Wiltshire Council Corporate Leadership Team and had asked for guidance on the matter and whether it was possible for a level of assurance to be provided to the Board to ensure that no action would be taken against them under any circumstances.

 

Members of the Board questioned an alternative route by contacting other Local Pension Boards to query if they had experienced similar issues. Officers noted that this had been done on an informal basis but that the majority of feedback had confirmed that many other Boards did not have insurance in place. Members explored the idea of not renewing the insurance cover but also discussed the adoption of a more cautious approach to not withdraw the insurance without hearing a  ...  view the full minutes text for item 88.

89.

Internal Audit 2020-21 (Part 1)

To receive a report presenting the findings of the 2020-21 internal audits covering the Fund’s internal financial controls, MiFID II & Data Protection Act 2018/GDPR compliance.

Supporting documents:

Minutes:

Andy Cunningham, Head of Pension Administration and Relations, and Richard Bullen, Fund Governance and Performance Manager, presented a report on the findings of the final Internal Audit Report for 2020-21 prepared by the South West Audit Partnership (SWAP), in respect of the Wiltshire Pension Fund.

 

The audit covered the Fund’s processes concerning its key financial controls, the Data Protection Act 2018/GDPR and MiFID II, and gave an opinion of “reasonable assurance”. Five areas of review were also highlighted: three were low priority and two were medium priority. Officers noted that under the GDPR item, SWAP conducted a survey on Fund officers for breach reporting and data protection which resulted in positive comments and a good level of understanding of the processes, roles and responsibilities. Members were informed that officers had requested that SWAP contact other Funds with regard to MiFID II and whether their approaches were similar to that of the WPF. It was confirmed that nine other Funds had been approached and the general feedback was varied but the underlying theme was that the WPF’s good practice approach for MiFID II was very high and officers expressed satisfaction at the recognition for the high-quality management of the area.

 

Jennifer Devine, Head of Pension Fund Investments, spoke of the i-Connect contribution issues discussed within the report. It was confirmed that the issues weren’t a risk in terms of the implementation of i-Connect, it was more the posting of the contributions data to the general ledger that caused issues within the accounting team. However, it was clarified that the problem had been identified and actions were being implemented to resolve those issues such as ensuring that employers were submitting simplified returns, and the development of spreadsheets that automatically uploaded the data onto the ledger system which would subsequently minimise the risk of errors. It was also noted that the accounting and investment team were developing a monitoring report that would be sent to the administration team to help the two teams work in tandem with more clarity.

 

Andy Cunningham followed on from this and highlighted one of the benefits of i-Connect; the ability to view data on a monthly basis instead of waiting for the end of year figures, thus allowing Fund officers to identify and solve any data issues at a faster rate. Officers noted that the short to medium term had produced complications and delays due to officers striving to simplify the process, but that the end result would put the Fund in a far better position for checking data with minimal errors. It was highlighted that this had been raised within the report, but that it was already being actioned by officers prior to the audit. Further improvements were cited as potential action points but that this was reliant on the software providers improving their reporting capabilities.

 

The recommendations were noted as having been accepted by officers, and actions were taking place, with a report to such being taken to the next meeting of the WPFC in December  ...  view the full minutes text for item 89.

90.

Internal Audit 2021-22 (Part 2)

To receive a report outlining the scope of recommended audits to the Committee which could be commissioned by the Committee.

Supporting documents:

Minutes:

Richard Bullen, Fund Governance and Performance Manager, presented a report that outlined the scope of the recommended auditing proposals to the WPFC, for inclusion in the Fund’s audit plan for 2021-22.

 

It was explained by officers that the established procedure was to put forward proposals that members could consider as WPFC recommendations for next year’s commissioning of audits; internal, external and self-assessments, with the primary purpose intended to retain consistency but to also challenge the Fund with new or topical items such as MiFID II. The Chairman requested an update on the recommendations made to the WPFC at the last Board meeting on 6 August 2020 concerning the inclusion into the 2021-22 audits of a review into the Brunel cost savings. It was confirmed by officers that the request had been considered and agreed upon and would be recommended to the WPFC. Officer also confirmed that the goal was to challenge the Fund with regard to i-Connect, GDPR and access controls and so forth in order to provide a complete scope of audit challenges and changes.

 

The Vice-Chairman highlighted the last sentence of Section 4 of the report concerning the request by the Fund of SWAP audits from other service areas within Wiltshire Council, and asked whether these requests would be for information only. Officers responded and informed members that this would be for key audits pertinent to the Fund, such as Wiltshire Council’s ICT systems audits following on from the cyber security item discussed at the last meeting of the Board. It was noted that any payroll audit reports could be beneficial for members to provide some oversight on how sizeable services that the Fund shares with the Council operate. Members noted that this could be advantageous for Fund officers in the event that the recommendations would adversely affect the Fund. After deliberations by members and subject to the respect for Council protocols, it was agreed that officers could request copies of the reports on behalf of the Fund.

 

The Chairman made a recommendation to the WPFC that Fund officers had sight of key financial systems reports for information, unless there were concerns, in which case the reports would be brought forth before the Board.

 

Cllr Richard Britton highlighted the update on Paragraph 6 of the report concerning the outstanding external audit of the 2018-19 Wiltshire Council accounts. It was noted that a lot of work had been undertaken but a satisfactory conclusion had not been found, and a decision had been taken between the Audit Committee (AC) and Deliotte to sign off the accounts at the AC November 2020 meeting leading to a qualification by the auditors. The Chairman noted the consideration written in the report by officers and proposed that the first recommendation be amended to include that if the AC does not approve the accounts at their November 2020 meeting then the Board would require a written explanation, but only if they are not signed off.

 

Newer members of the Board asked for a brief explanation  ...  view the full minutes text for item 90.

91.

The LPB's Register of Interests & Conflict of Interests Policy

To receive a brief report reviewing the Board’s Register of Interest & Conflict of Interest Policy.

Supporting documents:

Minutes:

Richard Bullen, Fund Governance and Performance Manager, introduced a brief report on the Local Pension Board Code of Conduct, Register and Conflict of Interests Policy’s.

 

It was noted that these were last reviewed in the Summer of 2018, and that the only material change highlighted within the past two years was the review of the Council’s Constitution with regards to the approval of Protocol’s 2A in respect of the WPFC, and 2B in respect of the Board. Changes to Protocol 2B effectively require the Board’s Code of Practice to be aligned to the administering authority’s Code of Practice, rather than operate as a standalone arrangement.

 

The Democratic Services Officer reminded all members that had not already to review their Register of Interests forms and to highlight any changes.

 

Resolved

 

1)    The Board approved the officer recommendations outlined in paragraph 5 of the report:

a)    That any declaration made on their own Register of Interests form continues to be complete and accurate;

b)    To consider extending the cycle of the current review period from two years to three, subject to c) below;

c)    On receipt of any updated guidance from the Pension’s Regulator in connection with tPR’s anticipated new “Single Code of Practice”, replacing the current Code of Practice 14, the policy is reviewed.

2)    Officers agreed to update the Board’s Code of Conduct, Register and Conflicts of Interests Policy to reflect Protocol 2B.

 

92.

Risk Register Update

To receive a report presenting the Risk Register for the Wiltshire Pension Fund for review by the Board.

Supporting documents:

Minutes:

Richard Bullen, Fund Governance and Performance Manager, presented an update to the Board in relation to changes made to the Fund’s Risk Register.

 

It was explained that the register had been updated to reflect the internal audit findings in terms of GDPR and MiFID II compliance (PEN009 and PEN049), and it was noted that PEN012, over reliance on key officers, had been raised to an Amber status due to the bespoke and specialist role that was being recruited for within the Accounting and Investment team. It was additionally highlighted that officers had become aware of a requirement for the Fund to make improvements to the website concerning accessibility for members who had additional needs such as impaired sight or hearing. Officers noted that they would be undertaking a project to ensure that the Fund was compliant and that it would be added to the Risk Register.

 

The Chairman noted his support at raising PEN012 to Amber and suggested that the topic be further explored within Agenda Item 22. The Vice-Chairman highlighted the use of the word “appear” within the Risk Register report in relation to PEN012 and asked for further clarification to which officers detailed the historic recruitment and logistical issues when approaching the search for a suitable appointment to the specific role.

 

Resolved

 

1)    The Board noted the attached Risk Register.

2)    The Board recommended the changes/actions made by officers in points 5 to 8 to the Committee.

3)    The Board requested that the matter of Accessibility Regulations be added to the Risk Register.

 

93.

Administration Quarterly Key Performance Indicators

To receive a report presenting the Fund’s administration Key Performance Indicators for review by the Board.

Supporting documents:

Minutes:

Andy Cunningham, Head of Pension Administration and Relations, presented a report on the Fund’s performance against its Key Performance Indicators (KPIs) in relation to the administration of pension benefits.

 

Attention was drawn to Appendix 2 (tPR Data Quality Scores) and it was noted that the Fund paid their software providers to undertake the required analysis annual due to the fees involved and the requirement for annual figures to be submitted to tPR. It was highlighted that the current figures were outdated, and it was confirmed that the Fund had already commissioned their software providers to update the figures which would be brought to the next meeting of the Board in February 2021.

 

The Chairman noted the positive nature of the report, particularly in relation to Appendix 1 and 2, and highlighted the fact that most Funds use the same provider for analysis which provided reliable benchmarking statistics for the WPF’s data quality results.

 

Resolved

 

The Board noted the current situation and the Fund’s plans for improvement.

 

94.

Annual Benefit Statement Update

To receive a report on the issuance of the 2020 Annual Benefit Statements by 31 August 2020.

Supporting documents:

Minutes:

Andy Cunningham, Head of Pension Administration and Relations, presented a report that summarised the outcome of this year’s Annual Benefit Statements (ABS) exercise for the year ending 31 March 2020.

 

Officers explained that the legal deadline for statements to be distributed was 31 August each year, but that there was some flexibility on how to produce them in terms of posting to home addresses or onto an online portal where members where given the opportunity to sign in to receive it or to opt out and instead receive the paper copy. As the online portal would be linked to i-Connect it allowed members to view their financial position on a monthly basis which would be more up to date than the annual statement.

 

It was noted that some participating employers sent their end of year returns in late, which led to Fund officers having less time to send queries and undertake standard data checks. These delays were cited as part of the reason for the goal of 99% active ABS being produced not being met. It was confirmed that the Fund’s production rate was instead 96.9% which although less than target was an improvement on last year’s 95%. However, it was highlighted that work was continued on those remaining ABS throughout September, bringing the total percentage up to 97.8% by the end of the month. It was noted that the onboarding of employers onto i-Connect would naturally improve this figure as well as it enabled the Fund to receive more up to date records earlier in the year, spreading out the queries and make the work needed at the end of year minimal.

 

Resolved

 

The Board noted the current situation and the Fund’s plans for next year.

 

95.

Urgent Items

Any other items of business which, in the opinion of the Chairman, should be considered as a matter of urgency. Urgent items of a confidential nature may be considered under Part II of this agenda.

Minutes:

There were no urgent items.

 

96.

Date of Next Meeting and Forward Plan

The next meeting of the Board will be held on 11 February 2021.

 

The Board’s Forward Work Plan is attached for members’ consideration.

 

Supporting documents:

Minutes:

The next meeting of the Board would be held on 11 February 2021.

 

It was noted that the Board’s Forward Work Plan was attached to the agenda pack for members’ consideration.

 

97.

Exclusion of the Public

To consider passing the following resolution:

 

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Item Numbers 22 - 25 because it is likely that if members of the public were present there  ...  view the full agenda text for item 97.

Minutes:

Resolved

 

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Item Numbers 22 - 25 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

 

98.

Accounting Update Report

The Board is asked to note the report from the Head of Pension Fund Investments in relation to the Fund’s accounting.

Minutes:

Jennifer Devine, Head of Pension Fund Investments, in relation to the Fund’s accounting to 30 June 2020.

 

Resolved

 

The Board noted the report.

 

99.

Minutes and Key Decisions of the Wiltshire Pension Fund Committee and Investment Sub-Committee

To consider the Part 2 (private) minutes of the meetings of the Wiltshire Pension Fund Committee and Investment Sub-Committee held on 24 September 2020 and 10 September 2020 respectively.

Minutes:

The minutes of the Wiltshire Pension Fund Committee and Investment Sub-Committee held on 24 September 2020 and 10 September 2020 respectively were considered, and it was:

 

Resolved

 

The Part 2 (private) minutes of the Wiltshire Pension Fund Committee and Investment Sub-Committee held on 24 September 2020 and 10 September 2020 respectively were noted.

 

100.

Brunel Governance Review Update

To receive an update on the Brunel Pension Partnership governance arrangements by the Head of Pension Fund Investments.

Minutes:

Jennifer Devine, Head of Pension Fund Investments, updated the Board on the Brunel Pension Partnership governance arrangements.

 

Resolved

 

The Board noted the report.

 

101.

Minutes

To confirm as a true and correct record the Part 2 (private) minutes of the meeting held on 6 August 2020.

Minutes:

The minutes of the previous meeting held on 6 August 2020 were considered, and it was:

 

Resolved

 

The Part 2 (private) minutes of the previous meeting held on 6 August 2020 were approved as a true and correct record.

 

 

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