Agenda and minutes

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Contact: Nikoleta Kemp, Senior Democratic and Electoral Services Officer  Tel: 07761 405898 Email:  nikoleta.kemp@harrow.gov.uk

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Items
No. Item

1.

Declarations of Interest pdf icon PDF 95 KB

To receive declarations of disclosable pecuniary or non pecuniary interests, arising from business to be transacted at this meeting, from:

 

(a)          all Members of the Committee;

(b)          all other Members present.

Additional documents:

Minutes:

RESOLVED:  To note that the declarations of interests had been published on the website and would be taken as read.

2.

Minutes pdf icon PDF 191 KB

That the minutes of the meeting held on 3 March 2022 be taken as read and signed as a correct record.

Additional documents:

Minutes:

RESOLVED:  That the minutes of the meeting held on 3 March 2022, be taken as read and signed as a correct record.

3.

Public Questions

To receive any public questions received in accordance with Committee Procedure Rule 17.

 

Questions will be asked in the order in which they were received.  There will be a time limit of 15 minutes for the asking and answering of public questions.

 

[The deadline for receipt of public questions is 3.00 pm, 25 July 2022.  Questions should be sent to publicquestions@harrow.gov.uk

No person may submit more than one question].

Additional documents:

Minutes:

RESOLVED:  To note that no public questions had been received.

4.

Petitions

To receive petitions (if any) submitted by members of the public/Councillors under the provisions of Committee Procedure Rule 15 (Part 4B of the Constitution).

Additional documents:

Minutes:

RESOLVED:  To note that no petitions had been received.

5.

Deputations

To receive deputations (if any) under the provisions of Committee Procedure Rule 16 (Part 4B) of the Constitution.

Additional documents:

Minutes:

RESOLVED:  To note that no deputations had been received.

6.

Appointment of Vice Chair

To appoint a Vice-Chair for the 2022/23 Municipal Year.

Additional documents:

Minutes:

RESOLVED:  That Gerald Balabanoff be appointed Vice-Chair of the Board for the 2022/2023 Municipal Year.

Resolved Items

Additional documents:

7.

Pensions Administration Update to 31 March 2022 pdf icon PDF 281 KB

Report of the Director of Finance and Assurance.

Additional documents:

Minutes:

The Board received a report on Pensions Administration Update for the quarter ending on 31 March 2022, which provided a summary of the Pension Administration Team’s performance and updated Members on a number of other items.

 

During the discussion that ensued, the following points were highlighted:

 

1)              The Pension Fund membership had increased further to 19,003 although a significant number of members had also retired during the last quarter.

 

2)              The three yearly re-enrolment exercise for members who had previously opted out of the Local Government Pension Scheme (LGPS) was coming to an end and was due to be completed by 31 July 2022.  Given the current economic climate, no significant increase in the number of members was expected.

 

3)              No known breaches of law were reported in the 2021/22 financial year.  However, in April 2022, there were challenges with the printing and distribution of payslips following a change of Harrow’s payroll arrangements, resulting in a small number of overseas members’ payslips being printed on the back of other members payslips.  In line with the Council’s procedures a breach of data protection requirements was reported, and action taken to rectify the situation and prevent it from re-occurring.

 

4)              One internal dispute, relating to ill-health retirement, had been dealt with and resolved under the Internal Dispute Resolution Procedure, with the member deciding to take early payment of their deferred pension at a reduced rate.

 

5)              No further updates had been received on the three complaints to the Pension Ombudsman since the last Pension Board meeting and minimal progress appeared to have been made by the Ombudsman.

 

6)              Consultation on the updated LGPS Regulations was still being awaited and unlikely to take place until after the summer recess at the earliest although further delays were still possible.  

 

7)              Data on the triennial evaluation was currently being processed with initial whole fund results, the proposed London Borough of Harrow contribution rate for the period 01/04/2023 to 31/03/2026 and a draft funding strategy statement by the Actuary expected to be reported to the Pension Fund Committee in September and the Pension Board in October as part of the consultation process.  Further reports would be submitted to the Pension Fund Committee and to the Board as the valuation work progressed.

 

8)              The pensions administration performance statistics were measured against the national benchmarks for the Quarter to 31 March 2022 and were set out in Appendix 1 to the officer report.  Service performance remained good and case numbers were added to the performance monitoring statistics set out in Appendix 1 for completeness.

 

In the discussion which followed, the Board raised a number of points, which were answered as follows:

 

9)              With regards to the status of the Local Ombudsman complaints the Board was advised that in all three cases, the independent medical practitioner’s reports had indicated that the individuals were not permanently unfit to work and therefore ill-health retirements were not awarded, resulting in the individuals referring their cases to the Ombudsman.  The cases had been  ...  view the full minutes text for item 7.

8.

Review of Pension Fund Committee Items pdf icon PDF 250 KB

Report of the Director of Finance and Assurance.

Additional documents:

Minutes:

The Board received a report which summarised the matters considered by the Pension Fund Committee (PFC) at its meetings on 9 March 2022 and 26 July 2022 and invited the Board’s comments.

 

During the discussion that ensued the following key points were highlighted in respect of the two meetings:

 

PFC – 9 March 2022

 

1)              Richard Romain and Colin Robertson were re-appointed as independent advisors to the Pension Fund Committee.

 

2)              Several items were considered including the Fund’s performance, draft work programme and risk register which was on the agenda for this Pension Board meeting.

 

3)              The four draft policies, reviewed by the Pension Board during the 2021/22 municipal year, were approved by the PFC and the Board’s recommendations incorporated in the final published version.

 

4)              Members were updated by the Fund’s Actuary on the approach and assumptions to be used in the forthcoming triennial evaluation.

 

5)              Following the PFC’s decision to change its emerging making equity investment manager, investments with GMO Emerging Domestic Opportunities Fund were liquidated and were now managed within the London CIV emerging market equity fund.

 

PFC – 26 July 2022

 

6)              In the absence of items for consideration and due to the number of new elected member appointed to the PFC following the May Local elections, the meeting was used as an informal briefing and training session with the Fund’s Actuary briefing members on the triennial evaluation.  The Committee also looked at performance and the state of the Fund’s investments as of 31 March and received an update on the Fund’s position as at the end of June.

  

7)              In response to a question on the benchmark against which performance figures were set, the Board was informed that this was set out in the investment strategy statement which would be shared for information with Members after the meeting.

 

8)              The triennial valuation was an assessment of the Fund’s historical and potential future liabilities, its assets, and assessment of future returns.  The latest figures showed that as at 31 March 2022, the Fund was approximately 101% funded – a figure referring to previous service liabilities and affected by both investments exceeding expectations and employers making secondary contributions in order to bridge the deficit gap.  However, one of the challenges the Fund continued to face was estimating the cost of future benefit accrual as the pension scheme was open to new joiners but to further benefit accrual by existing members.

 

9)              The Fund had committed £68 million to CIV infrastructure and £50 million to renewable infrastructure funds, invested through private markets.  In terms of the infrastructure fund, the Fund had already contributed £31 million and LCIV was gradually identifying further investments with the aim of reaching £68 million in the next 15 months.

 

RESOLVED:  That the Report be noted.

9.

Review of Pension Fund Risk Register pdf icon PDF 243 KB

Report of the Director of Finance and Assurance.

Additional documents:

Minutes:

The Board received a report which set out the updated Pension Fund Risk Register and invited Members’ comments.

 

By way of introduction, the Board was informed that the risk register was a regularly reviewed document, last considered by the Pension Board at its meeting on 16 December 2021.  The key risks remained unchanged since the last review and were rated as either “Amber” or “Red” as they were most likely to have the biggest impact on the Fund.  Three of the four biggest “red” risks were linked to markets, investment valuations and returns of investments and as such could not be eliminated.  Instead, the Fund had put in place a range of controls and mitigations strategies to help keep these risks manageable and these were set out in Appendix 2 to the officer report.

 

The Board welcomed the report and did not raise any questions or comments.

 

RESOLVED:  That the report be noted.

10.

Pension Board Draft Annual Report 2021- 22 pdf icon PDF 251 KB

Report of the Director of Finance and Assurance.

Additional documents:

Minutes:

Members were presented with the regular draft annual report, as required by the Board’s Terms of Reference and invited to make comments before a final version of the report can be submitted to Full Council in September 2022.

 

A key point raised in the discussion revolved around the membership of the Board with members stating that consideration should be given on either introducing reserves or expanding the cohort of members to ensure resilience and continuity of the Board.  Whilst appointment of reserves was considered, Members were reminded that the Board was an independent from the Council body and as such operated under different legislation, one which may not include provision for reserves. Increasing the existing membership was another option albeit challenging due to ongoing difficulties in recruiting and retaining members.  The Board did not raise any further comments.

 

RESOLVED:  That the annual report be noted and referred to Council subject to officers investigating queries about appointment of reserve members and expanding the structure of the Board and amending the report accordingly.

11.

Review of Pension Fund Governance Compliance Statement pdf icon PDF 255 KB

Report of the Director of Finance and Assurance.

Additional documents:

Minutes:

The Board received a report on the Pension Fund’s Governance Compliance Statement as set out in Appendix 1 and was invited to make comments for consideration by the Committee at its next meeting in September 2022.

 

During the followed discussions Board Members raised a number of points as follows:

 

1)              Referencing page 59 of the report the Board noted that except for representatives of the main employer, Harrow Council, the Pension Fund Committee (PFC) had no representation of any other employers or scheme members with the two trade union members having only an observer status and therefore could not be deemed fully compliant with Principle A. 

 

2)              Referencing page 55 of the report, the Board noted that Pension Board should be listed under the list of bodies/officers with delegated by the Council functions.

 

3)              Referencing page 62 of the report, the Board felt that access to information requirement set out in Principle G had not been fully met as PFC exempt reports were still inaccessible for independent members of the Pension Board, thus excluding them from potentially important information.  Whilst officers expressed sympathy with the situation, they noted that the matter had been pursued on several occasions and Harrow’s monitoring officer’s view is that the position remained unchanged.

 

4)              Whilst welcoming the progress to date made on the “Good Governance Review”, the Board expressed concerns over the significant delay in the government’s response on the review, the recommendations of which were yet to be published.

 

RESOLVED:  That the report and latest position on the LGPS Good Governance Review be noted.

12.

Work Programme for Future Meetings pdf icon PDF 301 KB

Report of the Director of Finance and Assurance.

Additional documents:

Minutes:

Members received a report on the Pension Board Work Programme, which reviewed the Board’s work programme to date, listed forthcoming meetings and invited the Board’s comments on a suggested work programme for the 2022/23 Municipal Year.

 

The Board questioned the order of which some of the Pension Fund Committee (PFC) and Pension Board meetings had been scheduled and noted that it would be helpful if going forward it could be ensured that the Board met before the PFC so that any advice or recommendations, particularly on policy reviews, can be taken into consideration in a timely manner.

 

The Chair also raised a point on the format of future Board meetings and sought Members’ views on whether these should remain virtual or move to in person or hybrid.  Whilst Members were amenable to continue meeting virtually and noted the advantages this may offer for any potential Board members recruitment, it was agreed that should there be a need to discuss a matter in person then a meeting would be arranged at the Council offices.

 

RESOLVED:  That the Report be noted.