Agenda and minutes

Venue: Committee Room A - County Hall, Llandrindod Wells, Powys. View directions

Contact: Carol Johnson  01597 826206

Items
No. Item

1.

Apologies

To receive apologies for absence.

Minutes:

Apologies for absence were received from County Councillors JG Morris and T J Van-Rees.

2.

Declarations of interest

To receive any declarations of interest from Members relating to items to be considered on the Agenda.

Minutes:

Members of the Committee declared interests as members of the Local Government Pensions Scheme.  These are personal interests, not prejudicial interests in accordance with Paragraph 12(b) (iv) of the Members Code of Conduct 2016.

 

 

3.

Minutes pdf icon PDF 56 KB

To authorise the Chair to sign the minutes of the last meeting held on 6 September, 2018 as a correct record.

Minutes:

The Chair was authorised to sign the minutes of the meeting held on 6 September, 2018 as a correct record.

 

 

4.

Pensions Board minutes pdf icon PDF 95 KB

To receive for information the minutes of the Powys Pensions Board meeting held on 10 July, 2018 and to receive a verbal report from the Board’s Chair on the meeting held on 21 September, 2018.

Minutes:

The Committee received the Board minutes for 10 July, having previously received the Chair’s report in respect of this meeting.  The Board’s Chair advised that at the meeting on 21 September, 2018 the main issues considered by the Board was the Code of Practice 14 and compliance.  He advised the Board was liaising with the Pension Fund Manager to do more work on this issue.  The Board had considered how breaches were being recorded.  It had considered a breach and it had agreed with the Pension Fund Manager that this should be a recorded breach rather than a reportable breach.  The Pension Fund Manager advised the Committee would consider this issue further in Agenda Item 8.  The Board’s Chair advised that the Regulator was monitoring Funds regarding breaches.

 

 

5.

Communications Strategy Statement pdf icon PDF 55 KB

To consider the Communications Strategy Statement.

Additional documents:

Minutes:

The Committee considered the revised Communication Strategy Statement and noted that electronic delivery of communications was now being encouraged.  It was noted that 62% of active members were signed up to the online system “My Powys Pension”.

 

RESOLVED

Reason for decision

That the revised Communications Strategy Statement be approved.

Statutory requirement.

 

 

 

6.

Data Improvement Plan pdf icon PDF 58 KB

To consider the Data Improvement Plan.

Additional documents:

Minutes:

The Committee considered the Data Improvement Plan.  This had been developed to address the Pensions Regulator (TPR) guidance regarding good practice for measuring the presence of member data.

 

TPR have set targets of 100% accuracy for data created after June 2010 and 95% accuracy for data created beforehand.  In March 2018, Powys Pension Fund completed a review of the administration system’s common pension data in line with the guidance and it was noted that 93% of records were accurate.  In response to questions the Pension Fund Manager advised that inaccuracies had been given a priority, with those potentially affecting member benefits being given the highest priorityThe Improvement Plan focused on high priority areas and the Committee would receive further reports on how these were being addressed. 

 

The Pension Fund Manager advised that annual data cleanses are carried out with employers, which supported the accuracy of data.

 

RESOLVED

Reason for decision

To note the content of the Data Improvement Plan.

Good governance and compliance with the Pension Regulator Code of Practice.

 

The Chair amended the order of the agenda.

 

7.

New Draft Policy - Reporting of Breaches pdf icon PDF 69 KB

To consider the draft Policy regarding the reporting of breaches.

Additional documents:

Minutes:

The Committee considered the draft policy for reporting breaches.  The Pension Fund Manager advised that a breaches log is maintained and breaches will be discussed and considered at Pension Board meetings. The Committee noted that there are two levels of breach:

·         record and if considered to be of material significance then

·         reportable to the Pensions Regulator.

 

The Pension Fund Manager advised that a breach had been logged as a recordable breach because correspondence had not been sent to pension fund members regarding deferred pensions within the required two months.  The Pension Board had discussed this breach and considered that this was not reportable.

 

The Pension Board Chair advised that the Policy should include a fast track process to enable the Pension Board to consider breaches as soon as they are logged rather than waiting for the next Board meeting.

 

RESOLVED

Reason for decision

That the draft Reporting of Breaches policy be approved subject to the inclusion of a fast track process to enable the Pension Board to consider breaches as soon as they are logged rather than waiting for the next Board meeting.

Statutory requirement and good governance.

 

 

 

8.

Pension Fund Annual Report 2017/18 pdf icon PDF 54 KB

To consider the Annual report.

Additional documents:

Minutes:

The Committee considered the Pension Fund Annual Report 2017/18.  It was noted that the Accounts had been approved by the Audit Committee and the Wales Audit Office.

 

RESOLVED

Reason for decision

That the 2017-18 Pension Fund Annual Report be approved and that the Annual Report be published by the 1st December 2018.

To ensure compliance with the Statutory requirements.

 

 

9.

Wales Pension Partnership Pooling - update

To receive a verbal report on the Wales Pension Partnership Pooling.

Minutes:

The Committee noted that a Joint Governance Committee meeting had recently taken place. 

 

The Pension Fund Manager advised that following the agreement in September to invest in the the Global Growth sub-fund,a Transition Manager had to be appointed by the eight Funds in the Wales Pension Partnership [WPP] to facilitate the transfer.

 

As it was likely that the transfer of funds would be completed before the next Committee meeting in December, it was recommended that the Committee delegate to the S151 Officer to approve the appointment of the Transition Manager.  The Committee noted that this was a time limited appointment and a Transition Manager would need to be appointed whenever funds were transferred.

 

RESOLVED

Reason for decision

the it be delegated to the S151 Officer to approve the appointment of the Transition Manager.

To enable the transfer of funds to the WPPP in respect of the Global Growth Fund.

 

The Committee noted that WPP was now considering the next tranche of sub funds.  It was noted that Aon Hewitt was reviewing what was being considered and whether this met the Powys Pension Fund’s needs.  This review would assist the Powys Pension Fund in its discussions at the WPP.

 

The Committee was advised that an update was to be sent to the Minister for Housing, Communities and Local Government (MHCLG)  on how work on the WPP is progressing. 

 

 

 

10.

Forward Looking Business Plan pdf icon PDF 122 KB

To consider a report by Aon Hewitt.

Minutes:

The Committee received the Forward Looking Business Plan and noted that the Investment Strategy would be considered next year when the actuarial valuation is undertaken and the diversity of the fund would also be considered during this review.  The Pension Board Chair indicated he would circulate press articles to the Committee on how other Funds were managing these issues. 

 

The Committee noted the issues for consideration in 2019 onwards and that the management of risk in a volatile equity market was an important issue for it to consider and understand.   It was agreed that this issue would be considered at the next Committee meeting.  In respect of Cyber crime, the Board Chair advised that TPR was visiting 10 Pension Funds and would be looking at their arrangements for addressing cyber crime. 

 

In respect of Responsible Investment, Aon agreed to circulate to the Committee a questionnaire which would assist the Members to consider their views on social policy and responsible investment.  Aon advised that climate change modelling was being undertaken to see what effect different levels of climate change could have on asset classes.

 

 

11.

Decisions Review pdf icon PDF 275 KB

To consider a report by Aon Hewitt.

Minutes:

The Decisions Review was noted.

 

 

12.

Exempt item

The Monitoring Officer has determined that category 3 of the Access to Information Procedure Rules applies to the following items. His view on the public interest test (having taken account of the provisions of Rule 14.8 of the Council's Access to Information Rules) was that to make this information public would disclose information relating to the financial or business affairs of any particular person (including the authority holding that information).  These factors in his view outweigh the public interest in disclosing this information.

Members are asked to consider these factors when determining the public interest test, which they must decide when considering excluding the public from this part of the meeting.

Minutes:

RESOLVED to exclude the public for the following items of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007).

 

The Chair changed the order of the remainder of the agenda as follows.

 

 

 

13.

Q2 MTAA Review

To consider a report by Aon Hewitt.

Minutes:

The Committee received the Quarter 2 Medium Term Asset Allocation [MTAA] report to 30 June, 2018.    The Committee noted the underperformance of 0.1% against the benchmark in the Quarter 1.  However, annually £2.5m had been added to the fund's value.  Assets were being constantly monitored to protect the Fund from risks and to also add value.

 

The Committee also noted the Transition market document [Item 18] and the issues affecting markets including Brexit, climate change, cyber issues, global markets. 

 

Aon provided the Committee with an overview of the high level issues which were considered by its Global Asset Allocation Team.  Issues highlighted included:

·         US trade wars and their impact on global trade

·         The impact of Brexit

·         Inflation

·         US Federal Reserve decisions

 

 

14.

Investment Strategy Statement [ISS] [AON Hewitt]

To consider the proposed changes to Section 9 of the ISS and the incorporation of information regarding the new Hedge Fund Managers.

Minutes:

The Committee received the updated Investment Strategy Statement [ISS] which included amendments to reflect the recent changes to the Hedge Fund Managers.

 

 

 

 

 

 

15.

MTAA 2018 Side letter hedge funds

To receive the MTAA mandate side letter in respect of the Hedge Fund structure.

Minutes:

The Committee received and noted the MTAA agreement.

 

16.

Asset allocation September 2018

To consider a report by Aon Hewitt.

Minutes:

The Committee noted that the value of the Fund as at 30 September, 2018 stood at £651.259m, which was an increase of £16m over Quarter 2.

 

 

17.

Q2 Quarterly Monitoring Report

To consider a report by Aon Hewitt.

Minutes:

The Committee received the Quarterly Monitoring report.  It was noted that the total asset value had increased by £15.0m over Q2. 

 

The Committee noted the changes in Funds and that Aon was monitoring these changes.  The Manager Ratings were new and with the movement of assets to the WPP, LINK would be asked for this data in the future.

 

In respect of responsible investments Aon advised it was looking at options and general information would be sent to the Committee.  It was noted that there was a balance between responsible investment and generating returns for the Fund and the Committee had to consider these.

 

 

 

18.

Transition market

To consider a report from Aon Hewitt.

Minutes:

The Transition Market report was considered with the Quarter 2 Medium Term Asset Allocation [MTAA] report to 30 June, 2018 above.