Minutes:
The Board noted that the Committee had, as recommended by the Board, agreed that where the Fund intends to enter into a contract with a manager to invest Fund assets, that the contract documentation is first scrutinized by the Fund’s legal advisers, in relation to the risk associated with investment manager insolvency.
The Board raised the following comments [the numbers shown are the Risk Reference numbers]:
· PEN 030 – It was noted that the Pensions & Investment Committee agreed on 9th February 2017, that when entering into new contractual arrangements with investment managers, contract documentation will be referred to the Fund's legal advisers for review and appropriate due diligence. As a result of this further control it was noted that the risk moved from High to Medium. The Board asked whether the Custodian would feature as a control especially in respect of Pooled Funds. The Secretary advised that further advice would be sought on this issue.
· The legal status of Pooled Funds was questioned and it was agreed that further advice would be sought.
· The Board discussed the merit of asking Burges Salmon to undertake a desktop review of existing contracts to advise on the security of assets if a fund manager were to go into liquidation. The Secretary advised that he would raise this issue with the Pension & Investment Committee due to the cost of such a review. He considered a review could be undertaken and a report be provided by the end of the summer.
· PEN011 Failure to comply with LGPS and other statutory regulations and PEN013 Failure to maintain and hold up to date and accurate pension records – staff training should be included as a control for both of these. Also in respect of PEN013 the consequences of fines by the regulator should be added in as a possible consequence.
· PEN019 Lack of expertise of members of Pensions & Investment Committee – as a control, training events should be provided for Committee members after an election.
· It was noted that no reference was included regarding the risk of insolvency of an admitted body. Reference to this would be included in the Risk Register.
· The Risk Register would be updated as required as any strategies etc are updated.
RESOLVED |
Action |
That advice would be sought on: i. whether the Custodian would feature as a control especially in respect of Pooled Funds. ii. The legal status of Pooled Funds. |
Secretary |
That the Pension & Investment Committee be asked to consider the merit of asking Burges Salmon to undertake a desktop review of existing contracts to advise on the security of assets if a fund manager were to go into liquidation, with a view to receiving assurances by the end of the summer. |
Secretary |
That the Risk Register: i. in respect of PEN011, PEN013, PEN19 and PEN030 be amended as detailed above ii. refers to the risk of insolvency of an admitted body and iii. be updated as required as any strategies etc. are updated. |
Secretary |
That the following Excel reports be printed on A3 paper for the Board: · Code of Practice Review · Risk Register · Recording breaches |
Clerk |
Supporting documents: