Pension Board - Tuesday, 20th October 2020 at 2:00pm - Lewisham Council Webcasting

Pension Board
Tuesday, 20th October 2020 at 2:00pm 

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1 Declarations of Interest
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2 Minutes
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4 Draft Risk Register 2020/21

thank you very much of a good often and welcome to the meeting of the pension Board
we have a ONE apology FAPP since I understand
and that is from the Sukey who is an employee representative
item number one is declarations of interest

1 Declarations of Interest

and we have therefore in the agenda pack these standing item on declarations of interest could I confirm that the declarations of interest are up to date
and I will take that as a cent yet and other any declarations of interest that arm in any items on the agenda that you specifically need to highlight
no in which case I think we have dealt with this item on the agenda
the next item of the minutes which are presented on

2 Minutes

page 7 in the agenda pack or from the last meeting which was overly year ago on Friday the 11th of October
this is firstly for factual accuracy
I realised that her only one of the members of the panel here today will be to that meeting
and any observations on factual accuracy
I will take that as none in that situation can these minutes be approved
they can thank you very much and can I ask officers in particular Robert or if any update on the agreed actions in the minutes yes Chair so of course many of the the deadlines within the minutes have since passed harm many of those actions have been carried forward into the new action logs and work plan
are so if I was just to work down the matters arisings item 3 there in the minutes the risk register is is brought to this meeting
the breaches of law policy will I believe come to the next meeting in the work work programme
I am learning needs analysis is addressed later on in the agenda for Members to pick up again
and similarly the reports on the sieve and our assurances over its governance and risk management will be a report presented I believe it's on the on the work plan for the next meeting
many of the actions in item 4 for the compliance review where there were changes suggested have been implemented to the action plans so they should all be reflected now
and I believe
that is the majority of the the outstanding items
thank you a fine one thing I think might be helpful in the future clearly we have an action plan on the agenda which is from the inept review that was undertaken for the Panel but they may in future be matters of rising from the minutes with agreed actions which don't relate to that
and what may be helpful for future meetings would be an action plan stemming from the minutes and just a rolling one said the causes an accord what we've agreed what's been done and what still in hand
of course a great Yakut thank you I think then if the Committee member survey people with that I will ask for that for the next agenda as an item

3 Action Log and Work Plans

the next item on the agenda then item 3 action log and work plans what are you presenting on this one yes yes I will are but three days arm so as I've just explained on many of the items on this on the action plans as the foremost have been carried forward from last year
where we haven't made progress a knee interim one of the suggestions was to include a direction of travel so for the most part there won't be a direction of travel because there hasn't been any progress today there are a few items within the action logs
where we have actions those specific items and as such they'll Heather and upwards arrow to indicate that they been completed and they'll come out of the log arm for the next meeting but there just there at the moment so to show where we have completed items arm
there is of course a separate action plan for the board and the administration Authority
I believe there was an item or a request from the previous meeting for the initial authority to officially endorse a their action plan are so I'm hoping that David the present at this meeting would be willing to do that come with the caveat that some of the items in the the Ministry authority action log are
have been
actions in the past year but I need to arm unheated have a catch up or with the administration side of the team the Officers' net team because I'll be made aware that some of these are potentially after day have actually been actioned I'm so that's a fault of mine that they they've crept into this version of the Plan arm but it will be updated for the next meeting but he had David if you'll feel able to
arm officially have on the record that we that you endorse this plan you fully 30 perspective I'm happy to endorse it
good thank you
before we move on to Appendix 3 I'd like to open it up to the minutes of the Board and see if they've got any questions or observations
no I'm fine now
I can't hear you know one thing I find that as well OK thank you very much I have a couple of firstly clearly it's been a very unusual year there are quite a few commitments now of action within the next four and a half months
and I was just wondering how you are confident as offices that that will be possible
I think first and foremost
that goes hand in hand with my earlier caveat in that somebody's do need to come off in their nation being there so that will hope the clear some of those off
I do have at the start of 20 20 recruited an extra resource into my team so I do have someone working with me now to support me and
I envisage obviously it's been a difficult year arm I was offered us for the first couple of months of the year when she started a covert then hits has been very hard to no it's not been ideal circumstances in which to train someone up that say are but I I envisage that a body end of the year shall be over to help me nurses be much more including some of these items down which I think for the most part are policy related and given the right policies in place not date in them are
so I am confident that we'll be able to achieve what without lying for the next quarter arm in time for the next meeting
OK
can I I've got few other comments speech and probably easier to take them one at a time
ITEM C 1 conflicts of interest and as a comment here are considered we need a separate policy for the administering Authority and the pension board my general view is that because we're legally distinct yes it may actually be worded almost identically
and
yes
Kate
the three
the action here was about and updating the fund with side but the actual is very much about the pension Board being kept up to date now as always your satisfied that action has happened yet it can be removed from the login I think that's academic that
and then it was just a couple of was thought the lead times were exceptionally long which was K 12 on page 9 of the Supplementary agenda which is over 18 months away
yes I that's that's an error that should of course be 20 21 yes OK Anderson another one which is 0 it's Kate while on the other schedule so some San is 20 21 I don't get it does colleges for that
so you'll be in a position to up date those two documents I take it yet
in light of the discussions that you said were ongoing and and when that happened you've been position to share with pension Board members if the hospital in advance of the next meeting of the Board yes appendix 3 as well you included the forward work programme
yes the this
again this is kind of in line with what we had before it and it follows her
solace in a it was an attempt to have some sort of structured routine for review in are the key policies that the board should have oversight of Areley arm recognising that was missed a year of course arm but this timeline is more or less in line with with what we've had before are albeit that some of these haven't been in place to date some of the documents that are unknown to review but by the time that they are put together in line with the the action plans they should fall in line with this work programme for review and how many where you envisage in the next meeting of the Board will be well that will hopefully be something we discuss US as part of the agenda today but I'm
we we've obviously expressed before the need to try and structure in regular meetings far in advance and if we were attempt to try and get back to quarterly meetings and I would expect the next meeting to be a some time around January to February I think he from my perspective we've lost a lot of time and impetus
we have got
it is essential that we meet at least once more this
financial year if not twice but that is a matter I think we can have some discussions offline on and I did attend in an event organised by one of the Consultants and based on a survey I think only 6 percent of local authority pension Boards had not been able to meet up to that point during over it
and that was a couple of announcements I think we're very much in the minority and
though you had a question
yak my quaking very much desperate thing but they might time with last it would actually be quite useful if we could time the meetings where we have the things to discover because quite a lot of things on the White other it's policy updates that actually for me lifts at timing the meetings for the it's one more immoral this financial year we actually had the programme of what we were going to be looking out for those meetings because otherwise it's not count fear and Rob trying spring get meeting together and there's not a lot to bring to it so I think that would give us some focus and so is the I agree entirely it's got to be focused around things that we need to do and need to review
perhaps that's one we can come back to right of end of the meeting where we've looked at the materials we have today
a came next item on the agenda
the risk register

4 Draft Risk Register 2020/21

as well please yes yes
so again this that the risk register was something which which as you know came out of the compliance of view on which which I on undertook and one of the glaringly obvious points that that came out of their review as that our risk register was was quite limited in the let focus prudent predominantly on the financial risks are
with very little else and we subsequently became aware that the the administering officers of of the funds maintained their own version of a risk register to cover their risks so what we've aimed to do is is kind of merge their risk register with AZ but then bring us up to date by a line in it to the CIPFA guidance on
the different categories of risk that should be in the risk register are so much more closely align now with the with the inner official guidance as well as the the pension Regulator's sort of guidance template as well armed with a few extra columns in there for us to monitor progress and previous scores arm so can move on from there but one thing I I would like to stress is that this is very much a a sort of first draft are there there needs to be some further work between offices the different teams in in fleshing some of these out the bit it also hasn't been to investment Committee yet full of their approval but again
it was a case of making sure we have something now for for the board to give their initial input into and we can move on from there
well thank you for having ended I think it is so important step forward what's the likely timescale for the board that sorry for pension Committee view and finalisation
the next investment Committee meeting is the 30th of November so are intention was to take this virginal an updated version to the Committee for that meeting
but of course it is it's a live document and will bring it to the that every board meeting going forward for for a view so like I say will constantly be be changing an updated okay I'm other members of the board have you got any comments or questions the Los
my questions were more about the detail of the restaurant to start because one things that I thought looking at it even lots of existing controls there actually things that should be repaired so where it's you dot just do one communications with employs you actually doing more and what I quite like to see an air is almost care of actions to be taken and time frame at its this as well because we got things like saying all their digital requirements for example for example under a 0sex review benchmark that it doesn't tell us when that will be done and where it report to so it's actually about nicking a bit smarter Shaw
he so that's connection I think Bob said that officers will reflect on and take on board yes thank you
OK any any other observations form board members
I'm
from my perspective I've got quite a few detailed observations arrival shadows with officers in writing copying in other members of the board
the couple of just very generic comments I thought
there were a few instances where some of this seems to relate to the Pensions Board
and until I think that because the pictures Board oversees the events it gets a bit circular if you live in the references to the pension Board here
OK but as I don't think that part of the Internal vis management of the Council
OK and the other one that I thought was really important here was that was a risk in respect of pooling where it seemed to be
presented here as a much lower risk than of islets been presented to us previously at these committees or this board meetings
and I would I would be that by saying that the London-set of made a lot of improvements over the past 12 to 18 months in terms of their their governance arrangements are their key personnel their engagement with funds is come on a long way so that may be partly the reason why a brisk is is slightly lower
or reflected as such in the register
UK
I think it will be really important to have this back in its vision of to it's gone to the pension Committee our first review next time and then become a standing item and I presume it will be a standing item on the agenda gave a big yes the case and so might ask is to feed back to officers
and copying in the other members of the Board on my detail comments and happy to discuss those with officers and going forward
and UK what is the next item on the agenda is this general update
yes
so I will

5 General Update

sorry I I would like to actually arm formerly that there was a a recommendation on item 3 which we haven't addressed and that was for the board to agree to her a renewed compliance review early next year since it is two years since the last one arm I feel agree with that would be suitable inescapably a good idea
in my view and I think I've seen not as well I mean benchmarking where we are now against way we were just has to be sensible Craig thank you OK I thought it all mess went without saying but it should be said and recorded in the minutes thank you very much OK so back to item 5 then I don't think there's too much of great substance here to comment on are much of that is in item 7 but I'm just to summarise the items in here and and and highlight the the recommendations
so we have the standing items which is the the register conflict of interest which is appended and obviously doesn't there's no update to that today the breaches of the law log again it it's it's a slightly such slash slightly strange situation that we have the log but we don't have a clear policy yet set up as to how to use them and report breaches of the law arm which will address next quarter but obviously that log is there at the moment as a record
the risk register we've already touched upon a very brief update on the London sieve as I referenced earlier that there's been a lot of changes in the last 12 months are some key personnel had been recruited to now include in their the chief investment officer and I responsible investment officer their engagement with London boroughs improved substantially they've set up a number of monthly business updates now
to update
shareholders on on the progress they have in setting up new funds and performance of those funds at any funds are which are in development and on the back of that they've also now started setting up what they call seed investigates so where they have potential mandates that Boris may be interested in we come together to CIL of developer proposal to take forward and and that's been quite successful arm to date certainly in one that that Lewisham involved in as well which again I'll come on to later on the agenda are a key point net notice as well is that the number of what the value of assets under management now with the surfers as increased up to 9 point 5 billion arm at the end of August from 7 point 6 at the end of March solution still doesn't have anything directly invested with the sieve and that we do intend to change that are certainly within the coming 12 months with some are proposed investments again which will come on to in the Strategic update later in the paper
the internally Item number 8 in this paper suggested
members are aware that the latest analytic included back in July ear received a substantial assurance rating we would just to medium recommendations 1 was to update the risk register are which we've obviously donned and I'm working on our continually and the other was
regarding reconciliations that we undertake from an accounting perspective that they be done in a more timely manner so will obviously take on board and try to do that going forward
a couple of updates I wanted to bring to Members' attention from the scheme Advisory Board chaired believe you're certainly be aware of one of these and that is the good governance project arm which they're working together with Hymans Robertson on and it's basically on how to
whether there was some sort of large structural reform needed of how the LGPS is
how it functions in in conjunction with the administering Authority in if something needed to change their looking at methods of best practice are so it essentially the project commissioned two working groups to take forward
6 all phases of the project wants to look at standards and outcomes that they would wish to seem prudent for I want to look at establishing some sort of new compliance regime as to how those standards are might be set out and and made clear it did seem to be progressing quite nicely until obviously arm COVID hit so the project at the moment is his other standstill but they do expect that some of the outcomes from these two workstreams will eventually are be enacted by a new statutory the her guidance specific specifically I think on some of the governance around the funds I think one of the examples they were looking at was on the need to have a new governance compliance statement signed off buyers section 1 5 1 Officer
that obviously hasn't been that that project is back up and run in I'll bring further updates back to the Board
secondly with the SAB they went live with a new cost transparency system early this year so they have their own voluntary code of transparency are which over 100 34 managers of signed up to and they encourage their the for managers have signed up to the code to submit a template of of Cost data at year end for funds to disguise in their Statement of accounts arm obviously the intention is to set up without everything out in a standardised format which makes it an easy to compare across the sector as a whole and and between funds are
in its first year of implementation that there were a few technical hiccups some some funds don't seem
as engaged as perhaps they should be all or or might be are and I think I'll make a point there that of the funds 8 for managers 6 or signatures of the code we only had three managers submit their cost transparency templates to vire this new portal that the SAB of set up one very male and I'm in communication with the SAB the try and understand
while those other managers of ours was an interested code didn't actually submit that data are but hopefully going forward that will become much more streamlined will feed into our accounts to to provide much more transparent information ones on the Costa involved in managing the fund a final point there to highlight at 9 point 8 and 9 point 9 was the issue of a supreme court judgment which was which was made
earlier this year about the Government's how best the phrases the Government's wording of a in the statutory guidance as to how funds should or should not pursue investment strategies which are contrary to seek to UK foreign policy I'm in in the sense that there
the way it was phrased by the government that funds should not be a making such investments are but the the ruling of the supreme court
was that the government don't have the power to make that
state that a legally binding all funds and that although funds of of always had the ability to divest from
sensitive countries or companies on financial grounds we it's now be made clear that we can also consider non-financial factors in in making investment decisions are as a result of been a lot of
communications from certain pressure groups and freedom of information request about certain investments that fund my hold specifically are for example in Israel or certain funds which certain companies which have recently come to light on a on a UN report are I think about London 15 120 companies which have been identified but are you enters potentially facilitating arm
the ongoing violation of of well the ongoing occupation of of posting in territories so there's been a bit of fallout from that we we had advice from are funded visors on how we should be dealing with with those sort of requests it was confirmed that we we the fund does have exposure very small exposure to somebody's companies which are on that UN list think about 230 thousand pounds but we've stressed in our responses that the funds new investment policy will see us divest from our current equities into low-carbon equivalence and so as part of that we would envisage divesting away from those companies that exposure to at the moment arm but we we may come on to that a little more in in the Strategic update at item 7
her moving on quickly to item 10 the pink pension Fund Annual report members will be aware that every year we prepare a report which summarises the key performance metrics of the fund over the previous year as well as the statement of accounts and and key statutory documents that investment Strategy Statement and a funding Strategy Statement there's a recommendation that members agree to
delegate to the Chair the Brighton of the pension Board report which is normally in only a couple of pages which goes into the the report and reports on the the Board's activities over the past financial year so in that instance subtle be from April 2 thousand 19 2 March 20 20 if Members are happy to agree with that
I think you've just had agreement nodded thank you so much
and the final point from the general update is the knowledge and skills learn IT training are so there's I think is a couple of recommendations which which come out of this I'm firstly just to highlight that there is a a knowledge and training policy in place for the board and that's been appended to this report for reference
as I don't need to for every meeting of also attached a list of outcome in events webinars Exxon for example that may be of interest to the board and I hope her have some relevance as well
just to say that if Members members are welcome to come back to me and I can book those for them if there's anything of interest or or please you welcome to book yourselves Berlin all cases please do let me know what you do attend because I can then update the trainee log and keep an accurate record of what you do attend
also attended to this report is the current version of the training logs of the most up-to-date record I have of events that Members have attended arm since April 2 thousand and 19 which are relevant to your role on the board if you could please review that and let me have any amendments or updates because this will then be reported within the annual report up to March 20 20 of course
and my one final point there which is a an outstanding item from the October 2 thousand 19 meeting was that we we ask Members to complete a learning needs analysis template just to help identify where some of your learning gaps may be where we can focus training and I think at the time maybe it was just the Chair I think maybe or just had your response at the time are but again that's another recommendation that we ask Members to complete that I put in a date for the end of November which I hope isn't to unreasonable are but obviously that can be that can be moved that's quite flexible depended on on your views
might questions observations for mimsy board again I think we can come back to the recommendations
I think Brian is putting her hand
Adam Muslims and their needs analysis cannot be e-mailed out again to everyone in format then used film for court thanks
any other observations men despite I got a few of mine and in section 7 on the pooling update there's lots of description of how the Service working different what is the mechanism going forward as the Council boots money into the soup of obtain assurance that the controls that are now brilliantly despite to you are actually operating as intended
onto the flexible it is is potentially one to reflect on given that arm is difficult at the moment to to answer that given that we don't have anything direct invested with them and before we do invest it would be something that we need to make sure be certainly have have in place and have those assurances are
so yeah perhaps that is something that we reflect on I'm and come back to you and I think that may also be picked up in the risk register and the action in respect of the surplus this OK so I just just one think on any won't just be you will be other authorities in London the cause of exactly the same challenge they using a pool table out of the game the assurance Elizabeth did yeah I was just wondering whether we Robert could actually check with those who have got money in the surf how they are actually making sure that these controls are viable I mean it must be and must be meeting regularly they've not even if virtually
they discussed that there must be intelligence in in that area already yes a great year I mean something that struck me or worse you report elsewhere that you exceedance auditors of Tenant Review the copies of the controls assurance reports for the funds that you intend to invest in at the moment
but it is a controls assurance report prepared by a reporting a council that reporting accounting for the CIF
again I'd I would seem so but on we it may just be the case that we're not party to those because of our LAC investment to date but it's not a Catholic need something to think after the risk register and perhaps report back next time yes it's okay I can I just say I would act I'm sorry this is just which seem to be to be common-sense but it's have once our money the SIF could be proactive in sharing those things and I don't know if there's legally any reason why because we haven't put money in we can't get that information but it does seem to me to be
there
I don't know just minded on their point
I
forceful points here and actually if there were something out of this because one of our roles is to make recommendations to the administering Authority
and here I think there is a recommendation can probably go in the minutes looking at my colleagues that before committing funds to the suit the Authority should be satisfied that about the mechanisms could obtain assurance about both the design and the continuing ongoing operation of the controls in the set
would Members of the Board be happy of we made that Mecom addition included in the minutes absolutely we are I think we've got a clear action or K am minus point was just an internal hit would it be possible for members of the board to see a copy of the Internal Audit report please of course yes I thought our own
yet and so can we go back then to the recommendations at the beginning of the report
and
let's just go through them one by one I think we can say that we've noted the register conflicts of interest
her delegated we've already agreed the delegation of the drafting of the pensioned
Board Annual report at the view the training record and we've had five agreed I think don't get me to advise for of the and any amendments complete and return the lead NEET analysis is that feasible on the timescale that has been outlined
I think Lisbeth was a novel earth my done I'll do my best but I'm I'm mad I can't always I'm not sure I can do it by the time I'll do what I can in the time OK that's fine thank you may not be a complete return
I think it's better to have something
on a timely basis installed working with and we've noted the remainder as the report does that concludes the consideration of this item
to get doubts the next item is this also yours from it
the Strategic update yes
if David's there are going to as David just to give us a brief outline of the the triennial valuation and what we've done on the back of that
and the revised investment strategy if you don't mind David
sorry Amey to take it
at this point leave fails to pass a resolution that we need to parts which is on grounds of Our the necessary elements of confidentiality to exclude the press and public from the meeting are you or members of the Board agreeable to do accept
David I think it's over to you
from the thank you for