Agenda and minutes

Minutes of the meeting held on 2^nd February 2022, previously circulated

RESOLVED that the Minutes of the Meeting held on  2 February 2022 be

signed as a correct record.

Items which in the opinion of the Chairman should be considered at the meeting as matters of urgency.

No item was raised as a matter of urgency.

Director of Finance to report

The Director of Finance and Public Value reported that following contact with the admitted bodies/employers two prospective representatives had been submitted applications and the closing date was the end of May. An appointment would be made by the date of the next meeting.

Report of the Director of Finance (DF/22/38), attached

The Board considered the Report of the Director of Finance and Public Value Please (DF/22/38) on the Internal Audit Report for 2021/22 and the proposed

Internal Audit plan (appendix 1 of the Report) for 2022/23.   

Based on work performed during 2021/22, Internal Audit had provided ‘substantial assurance’ on the adequacy and effectiveness of the Fund’s internal control environment.

The audit plans for the financial year 2022/23 allowed for up to 40 days of internal audit support for the Pension Fund and 45 days of internal audit support for Peninsula Pensions, which provided 85 days of internal audit provision overall. Further detail was set out in Appendix 1 of the Report.

Members’ discussion points with the Head of the Devon Audit Partnership and other Officers included:

·         the use of a new accounting system with a review of the FINEST system would be referred to a project board in order that the needs of the Devon Pension Fund and Peninsula Pensions would be taken fully into their considerations; and systems were also in place to mitigate risks;

·         the audit plans were flexible and subject to change as matters progressed; 

·         information on the risk scoring methodology used would be circulated to members for information (now attached) and a view by a member that additional mitigations could be considered and assessed along with the impacts of the various risks (particularly the high ones) which required further review; and officers agreed that this could be the subject at a future training session; and

·         the Risk Register was available on the County Council’s website:

Pension Fund - Devon Pension Fund | Services | Risk Recording

Peninsula Pensions - Peninsula Pensions | Services | Risk Recording (devon.gov.uk)

It was MOVED by Councillor C Slade, SECONDED by Councillor S Randall Johnson and

RESOLVED that the Internal Audit Report for 2021/22 and the proposed Internal Audit plan for 2022/23 be noted together with the above comments.

Report of the Director of Finance (DF/22/39), attached

The Board noted the Report of the Director of Finance and Public Value

(DF/22/39) on Members’ attendance at meetings and training events and corrections provided by members at the meeting in relation to the training events.

Report of the Director of Finance (DF/22/40), attached

The Board noted the Report of the Director of Finance and Public Value

(DF/22/40) on an update on the current procedures for monitoring of timely payment of contributions from employers. 

Where contributions were received after the legal deadline and the Authority  considered that late payment was of material significance, the Pensions Regulator would be notified of the employer’s failure to meet the legal deadline. There had been no referrals.

The table in the Report summarised the monthly contributions received in Q3 2021/22. A total of 8 contributions had been received late during the quarter and these had been in the main one off events relating to Parish/Town councils. A previous issue reported to the Board at the February meeting regarding an Academy employer had been resolved.

Report of the Director of Finance (DF/22/41), attached

(Councillors J Hodgson and P Bullivant attended under Standing Order 25 and spoke to this item in support of the proposal for consultation with Fund members).

The Board considered the Report of the Director of Finance and Public Value (DF/22/41) on how stewardship met the requirements of the UK Stewardship Code 2020 and new accreditation with the Financial Reporting Council (FRC). The Report included a Stewardship Report Feedback from the FRC which referred to a proposal that a survey of fund members be undertaken to feed into the Fund’s policies on stewardship and climate change.

The intention was to put the survey on the Devon Fund website and send out a notification email to all the Devon fund members who had signed up to member self-service. In addition, fund employers would be asked to advertise the survey to their staff.

The survey results would be compiled and a report presented to the Investment and Pension Fund Committee.

Members’ discussion points with Officers included:

·         congratulations from the Board to the Service for its accreditation under the revised UK Stewardship Code 2020;

·         the need for consideration of regular surveys of fund members for example every three years aligned with the review of the Investment Strategy (or possibly more frequently);

·         within the sample survey attached to the report, consideration to a ‘don’t know’ option which would be useful; and review in relation to the emphasis on ‘Climate Change’ in the current draft survey in view of the many other Ethical, Social and Governance (ESG) issues (for example, relating to arms/weapons/defence; forced labour/working conditions; remuneration/governance, tobacco etc). These could be the subject to further surveys noting the need to keep any survey relatively short; and

·         concerns relating to wider access and not just via the on-line Member Self Service (used by 41% of members) and other options should be considered; and other presentation improvements should be made (in particular relating to the ranking of issues), noting that this remained a work-in-progress.   

It was MOVED by Councillor C Slade and SECONDED by Councillor A Bowman and

RESOLVED

(a) that the Devon Pension Fund accreditation by the Financial

Reporting Council as a signatory to the UK Stewardship Code 2020 be noted; and

(b) that the proposed survey of pension fund members of their views

of the Fund’s investment policies be supported, subject to consideration of the comments as outlined above.

Report of the Director of Finance (DF/22/42), attached

(Councillor J Hodgson attended under Standing Order 25 and spoke to this item relating to global instability and need for further information/signposting in regard to climate change policy information)

The Board considered the Report of the Director of Finance and Public Value (DF/22/42) on the Risk Register (attached at Appendix 1). The Register identified the key risks and outlined  current processes in place to mitigate the risk, and the planned improvements in place to provide further assurance. It incorporated the risk register of both the Investments Team and Peninsula Pensions.

At the Board’s request, the Devon Audit Partnership had reviewed the risk register to provide assurance that the mitigation actions were correctly noted. The Audit opinion was that of Substantial Assurance with three low priority suggested actions. These had been taken into account in this latest review of the register.

Taking account of the revisions above there were now 40 risks recorded in the Risk Register, 22 of which related to Devon Pension Fund management and 18 to Peninsula Pensions. Across Devon Pension Fund management and Peninsula Pensions, action taken to mitigate risks had reduced the number of high risks from 13 to 3.

Members’ discussion points with Officers included:

·         risks had been merged and rationalised and the Register would be re-re-numbered in due course (in the meantime consideration would be given to reference to the former numbers as suggested by a Board member);  

·         the rationale in scoring risk F6 at score 16 (relating to a global financial crisis); and risk F16 at score 15 (relating to McCloud)), which should be reviewed by officers as the scores were comparatively close and F6 appeared to have a significantly greater detrimental potential impact than F16; and

·         further information/signposting in regard to climate change policy information.

The Board noted the Report and the additional actions to mitigate risk and asked that the comments as outlined be considered by Officers.

Report of the Director of Finance (DF/22/43), attached

The Board considered the Report of the Director of Finance and Public Value

(DF/22/43) on the draft Devon Pension Fund Annual Report 2021/22 which would be considered by the Investment and Pension Fund Committee later this year prior to approval. The report would contain the statement of accounts together with other information about the Fund’s performance during the year, including the Devon Pension Board Annual Report on the work undertaken by the Board and recommendations that had been acted upon by the Investment and Pension Fund Committee. An initial draft of the Board report was attached Appendix 1 which was approved by the Board without comment.

Report of the Director of Finance (DF/22/44), attached

The Board noted the Report of the Director of Finance and Public Value

(DF/22/44) on the proposed annual training programme in compliance with the Pensions Act 2004 and the CIPFA Code of Practice on Public

Sector Pensions Finance Knowledge and Skills. The report also detailed  members’ attendance at training events which would now be held in person.  The Training Manual was now drafted and would be launched at a training event and published on-line.

Report of the Director of Finance (DF/22/45), attached

The Board noted the Report of the Director of Finance and Public Value

(DF/22/45) on the outturn budget for 2021/22 and the proposed budget for 2022/23. These related to the allowances and/or expenses for Board members; accommodation and administrative support to conduct its meetings and business; training; legal, technical and other professional advice (where required). These expenses were regarded as part of the costs of administration of the Fund.

Non-Devon County Council members asked for clarification on their insurance liability as there was no insurance line detailed in the budget. Information would be circulated to members (by email) on this in due course.  

Minutes of the Investment and Pension Fund Committee meeting held on 25th February 2022, attached

(Councillor P Bullivant attended in accordance with Standing Order 25 and spoke in regard to this item).

The Board noted the Minutes of the Investment and Pension Fund Committee meeting held on 25th February 2022.

Report of the Director of Finance (DF/22/46), attached

The Board considered the Report of the Director of Finance and Public Value (DF/22/46) on Peninsula Pensions’ internal service standard targets and monitoring performance against the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013, which set out the minimum requirements regarding the disclosure of pension information.

Team performance targets were monitored on a monthly basis via a task

management system and reporting tool within the pension database.

Member discussion points with Officers included:

·         the consistent high performance within the high priority areas;

·         the level of current vacancies which was being addressed;

·         the timeliness of information from Employers and a current work to address this including an exercise on historic data which would also assist with the McCloud remedy and improved follow-up processes in place and that any breaches would be reported to the Board; and

·         the number of compliments received and complaints which related to timeliness of data from Employers.  

The Chair and Board Members thanked the Lead Officer and the Team for the

overall excellent performance.

Report of the Director of Finance (DF/22/47), attached

The Board noted the Report of the Director of Finance and Public Value (DF/22/47) on an update on the latest developments affecting the LGPS which related to the relevant provisions of the Finance Act 2022, and McCloud letter to administering authorities.

Report of the Director of Finance (DF/22/48), attached

The Board noted the Report of the Director of Finance and Public Value (DF/22/48) on a proposed Future Work Programme detailed in the report for the next three meetings.

Members also noted that a report on the Peninsula Service Improvement Plan including reference to employer breaches would be brought to the Board in due course. Members asked that an interim Fund Valuation report be presented to the Board. Officers would consider the appropriate time for this. 

The Pension Board will meet at 10.30am on the following dates:

Tuesday 19th July 2022 (in-person at County Hall)

Tuesday 18th October 2022

Tuesday 7th February 2023

Tuesday 18th April 2023

Any update will be confirmed here: Browse meetings - Devon Pension Board - Democracy in Devon

Tuesday 19th July 2022 (in-person at County Hall) Tuesday 18th October 2022 Tuesday 7th February 2023 Tuesday 18th April 2023 (all at 10.30 am)

Any update will be confirmed here: Browse meetings - Devon Pension Board - Democracy in Devon