Agenda item

Report of the Director of Finance.

The Board received a report of the matters considered by the Pension Fund Committee at its meetings on 21 November 2017 and 7 March 2018.

The Board reviewed the Communications Policy Statement, Funding Strategy Statement, Investment Strategy Statement and Governance Compliance Statement.  It was noted that the Statements were revised subsequent to actuarial revaluation or a change in direction or strategy.  The officer advised that the only major change had been the allocation review updating of the Investment Strategy and changes to the corresponding tables.

In regard to the Governance Compliance Statement, the Board expressed the view that it could not be fully effective in undertaking its role without access to all the discussions of the Pension Fund Committee.  The Chair referred to the legal advice from HB Public Law that had prevented his attendance during the private (Part II) part of the Pension Fund Committee meetings.  The Board reiterated its disagreement with the ruling stating that other Authorities allowed such attendance.  The Chair undertook to discuss the matter with CIPFA and report back on the view of the Pensions Panel.  The Panel agreed to the inclusion of a further report on Governance on the agenda for the next meeting to enable consideration of feedback from other authorities.

In response to questions from the Board it was noted that the Pension Fund Committee met quarterly and that any decisions required between meetings were delegated to officers in consultation with the Chair and reported to the next meeting of the Committee.  In response to a request from the Chair, the officer undertook to ensure that the minutes of the Pension Board were regularly included on the agenda to the Pension Fund Committee

In response to questions on the impact of the transfer of Harrow College to the London Borough of Hillingdon Pension Fund, members were advised by the Chair that at the time of transfer it was fiscally neutral although no modelling of future demographics had taken place.  The assets of Harrow College at the calculated transfer date had been valued at 3% of the Harrow Pension Fund at £30.4m.  It was noted that the part liquidation of assets had helped fund the transfer with the balance met from cash.

An officer stated that there was one item that he wished to bring to the attention of the Board:  the exemption to the Currency Hedging Regulatory Implications of European Market Infrastructure Regulation (EMIR) had resulted in the continuation of the status quo.

Following questions and comments from Board Members the officer advised that:

·                     the Board’s relationship with the London Collective Investment Vehicle (CIV) was by way of the Pension Fund Committee.  Due to a restructure, the main group of 33 representatives (one per Borough) had been replaced by a smaller group of eight members and four treasurers together with an annual meeting of all member boroughs.  The Chair stated that the London CIV had got off to a fast start prior to agreement of the pension pool regulations.  It remained to be seen how the smaller representation could be agreed to the satisfaction of all boroughs.  The Chair undertook to circulate a presentation from a session that he had attended on the pension boards and pooling;

·                     the Board did not have a risk register but tended to review the Pension Fund Committee risk register.  The Chair stated that the main risk was not reporting breaches that the Board was aware of.

RESOLVED:  That the report be noted.