Agenda and minutes

To elect chair for 2019 - 20

RESOLVED - to defer the item until the next meeting on 24 September 2019

To elect vice chair for 2019 - 20

RESOLVED - to defer the item until the next meeting on 24 September 2019

To receive any apologies for absence

Apologies were received from Sharon Warnes and Osian Richards

To receive any declaration of personal interest

None to note

To note any items which are urgent business in the opinion of the Chairman so that they may be considered

None to note

The Chairman shall propose that the minutes of the meeting of this committee   held on 13 March 2019 be signed as a true record.

The Chair signed the minutes of this meeting, held on 13 March 2019, as a true record.

To submit, for information, minutes of the Pensions Committee meeting held on the 14.3.19 and consider any matters arising

The minutes of the Pensions Committee held on 14 March 2019 were accepted for information. There were no matters arising from the minutes.

To consider the report

Submitted - an amended draft report, prepared jointly with the Chair, which included the observations made by Board members at the meeting held in March 2019.  Members were reminded that the report would be included in the Gwynedd Pension Fund annual general report.

RESOLVED to accept the report.

To consider the Investment Managers report

Submitted - a table summarising the performance of equity and bond mandates, and it was reported that the majority were performing above the benchmarks. It was explained that not all Funds reported on their performance punctually, and therefore the returns had been estimated. It was explained that there was only just over six weeks' performance available for two of Wales Pension Partnership's sub-funds, namely the ‘WPP Global Growth Fund’ and ‘WPP Global Opportunities Fund’, and it was therefore accepted that an extended period was required prior to assessing performance. It was noted that performance monitoring was a long term process in the field of pensions, and that the situation would be monitored and reviewed carefully in moving forward.

A request was made to reveal the sum that remained in the Wales Pension Partnership pool once the situation had stabilised, in order to provide a clear picture as the assets were transferred.

RESOLVED to accept the information.

To consider the report and understand the risks relating to the Pension Fund and scrutinise the Risk Register

The risk register was presented to Members, so that they could scrutinise the latest version, and confirm that the identified risks were being monitored accurately. It was noted that the document was a working document, with the risks being regularly reviewed, and mitigation controls put in place. 

Members had already requested that the Risk Register be a standing item at each meeting, in accordance with a suggestion from CIPFA. It was agreed that this would be an item to report on changes only, not to open a discussion on any aspects.

Observations from the discussion:

·         There was a suggestion to include risk for case law (arising from the recent McCloud case).

·         In response to an employer failure, it was noted that employer contributions were collected on a monthly basis. Any concerns would be monitored, but the Fund had a guarantee from a previous employer.

·         As the Pensions Committee had agreed an additional investment in staff resources for the Pensions Administration Service, should the risk score for ‘adequate staff resources’ be reduced?  In response it was noted that the significant pressure on the Fund Investment Service would continue, in relation to reconciling transfers to the Wales Pension Partnership pool, and that the situation could be reviewed in 12 months' time.

·         Officers noted that the Pensions Administration Service had received punctual information from employers this year, which was a significant improvement, but the accuracy of the information had yet to be checked. With the development and use of the i-Connect system, officers anticipated that there would be further improvement in future. The officers were thanked for their work in strengthening the communication and engagement process with employers.

RESOLVED to accept the content of the risk register and to add the above proposals.

To consider the report

For information, a report was submitted on the Ministry for Housing, Communities and Local Government's consultation - Local Government Pension Scheme: Changes to the local valuation cycle and the management of employer risk policy. It was reported that the Westminster Government was proposing to amend regulations so that the Local Government Pension Scheme valuations would change from a three- year to a four-year cycle.

It was reported that a three-year cycle was appropriate for funded schemes, such as the Gwynedd Fund, and the initial argument was that it would be negligent to change to four-year cycle due to reasons of convenience and to standardise the UK Government's national arrangements. It was added that there were no clear reasons for the proposed change, and that there was no business case to justify it.

It was explained that the consultation would close on 31 July 2019, and that officers would seek guidance from the Fund's actuaries and other professional bodies. It was intended to prepare a draft response in consultation with the Pensions Committee Chair, and to submit this response for approval by the Pension Committee on 29 July 2019. 

In response, it was noted that the current arrangements were effective, and therefore the need for change was questioned - the reasons had not been clarified by the Ministry for Housing, Communities and Local Government, and that they had no business case. A request was made for Finance officers to circulate a copy of the guidance provided by the Fund's actuary, Hymans Robertson, and the draft response on behalf of the Gwynedd Fund. 

RESOLVED to accept the information and support the officers in their response to the consultation

To submit, for information, details and minutes of the Penison Board Chairs Engagement Meeting

A report was submitted for information, outlining the Wales Pension Partnership's engagement arrangements with the Chairs of the eight Local Government Pension Fund Board Chairs. The Chair explained that the desire to arrange a meeting had arisen in response to the need to find a practical method of sharing and discussing the work programme of the host authority, Carmarthenshire, and the concerns that had arisen. Although some Pension Board Fund Chairs proposed that concerns could be highlighted through correspondence, it was decided that a two-way joint discussion would be the best method of addressing these issues. A meeting had been held at County Hall, Cardiff on 2 April 2019, with the Head of Finance Department and the current chair of Gwynedd Pension Board in attendance, and reference was made to the minutes that were attached to the report.

It was reported that the meeting had been very beneficial, and solutions had been proposed. It was accepted that there would be inevitable teething problems when establishing a new Partnership:

The Chair noted the following matters that had arisen during the meeting:

·         much work had been undertaken in transferring investments

·         the host authority had a detailed action plan in place

·         acceptance of the need for improving communication and information on the website

·         the membership of some of the Boards were different, and therefore introduced different aspects of scrutiny and challenging

·         agreement that meetings would be held every six months – this was encouraging.

The information was accepted.

To consider the Head of Finance’s Report

For information, a report was submitted on the Westminster Government's consultation on capping public sector exit payments – implementing a £95k exit payment cap.

It was noted that the details in the report were somewhat ambiguous and that it currently led to more questions than answers, as Welsh Government had not yet decided their view on the matter. It was noted that Welsh Ministers had powers to relax the restrictions, and there was a suggestion within Welsh local government that an exit cap for Wales should not include pension strain. Welsh Government could relax the requirement as appropriate, and could consider reducing the £95k.

It was explained that the consultation would close on 3 July 2019, and that no direction on its implementation had been submitted by the Westminster Government. 

It was proposed that the response should express support for removing the pension strain from the exit cap, and that concern should be noted about restricting the flexibility. Officers were requested to investigate how many employees / members would be affected, especially those who would receive in excess of £50k.

RESOLVED to encourage Gwynedd Fund employers to respond to the consultation.

To receive verbal information from the Head of Finance

Following the Chair, Tony Deakin's announcement that he would be retiring at the beginning of August, the Head of Finance Department noted that he accepted his resignation, and that the process of recruiting and appointing a new employer representative for the Pension Board would commence by corresponding with employers.

He reiterated his gratitude to Tony Deakin for his service as a Board member and Chair, and congratulated him and Cartrefi Conwy on receiving an award at the Public Finance Award ceremony for alternative methods of service provision, that had offered employment opportunities to local residents.

The Chair, Tony Deakin, expressed his gratitude to the Head of Finance Department and officers for their support, and to the Board members for their good work and respect towards their work. He noted that he had enjoyed his time as Chair and all the experiences that he had gained.

On behalf of the Members, Mr Hywel Eifion Jones thanked the Chair, and wished him a happy retirement.

To submit information for the members of relevant dates for meetings

Submitted, for information, the dates of Pension meetings until May 2020 to enable members to plan accordingly.

Attention was drawn to a possible change to one of the dates. It was reported that it was possible that the Wales Pension Partnership Joint Committee meeting would be held on 4 September 2019, not 20 September, as noted in the report.

In accordance with the arrangements for nominating a Board member to observe a meeting of the Pensions Committee, Mr Tony Deakin was nominated to attend the meeting to be held on 29.7.19.  Further nominations at the next Board meeting would be needed for the subsequent meetings.

RESOLVED to accept the information and to review the attendance of Board members at Committees at the next meeting.

To select representatives from the Pensions Board to attend upcoming conferences

Submitted - a report informing the members about relevant conferences and events and seeking nominations for attendance on behalf of Gwynedd Pension Fund.

RESOLVED - the following, and suggesting a further discussion at the next meeting regarding nominations for the other events.

LGPS Local Pension Board Members’ Annual Event

26 June 2019

Osian Richards

Responsible Investor’s 12th Annual RI Europe Investment Conference

11 – 12 June 2019

Aled Evans

‘LGC Investment Seminar’, Carden Park, Cheshire

27 – 28 February 2020

Hywel Eifion Jones

To consider the above program and suggest additional items or changes

Submitted - the amended work programme for 2019/2020 following comments received at the last Board meeting. Members were reminded that the document was a working document, to be amended as required.

It was suggested that the following matters should be included in the work programme:

·         A benchmarking exercise in accordance with CIPFA's key performance indicators - there were currently concerns that Altair, the pensions administration software, was unable to provide all the necessary information in a format that was acceptable to CIPFA. The request for an update was approved.

·         An update on end of year returns – analyse information about the accuracy and quality of the returns.