Present:-

Fund Employer Representatives

Councillor Greenslade (Devon County Council), Mr Smith (Devon Cornwall Police) and Mr Hearn (Tavistock Town Council)

Fund Member Representatives

Mr Bowman, Mr Henshaw, Ms Lewis and Ms Keightley

Also in Attendance

Councillor Gilbert (Chairman of Investment Pension Fund Committee)

Councillor Parker-Delaz-Ajete (Member of Investment Pension Fund Committee)

Mark Gayler (Devon County Council, Assistant County Treasurer Investments)

Dan Harris (Devon County Council, Investment Manager)

Angie Sinclair (Devon County Council, Deputy County Treasurer)

Shirley Cuthbert (Deputy Head of Peninsula Pensions)

Apologies

Councillor Brook (Fund Employer Representative, Devon County Council)

1 Election of Chairman and Vice Chairman

RESOLVED that Mr Henshaw and Councillor Greenslade be elected Chairman and Vice-Chairman respectively for the ensuing year.

2 Devon Pension Board Terms of Reference

The Board considered the Report of the County Treasurer (CT/15/56 - text only | pdf | supplementary information CT/15/56) which presented the Terms of Reference and operational arrangements and procedures for the Devon Pension Board, as ratified by the County Council in February 2015.

The County Treasurer also provided an update to the Board on the recruitment of the Board s Independent Member.

It was AGREED that henceforth the Board should meet at least twice yearly, with further meetings being arranged if and when required, and that the Board s Terms of Reference and operational arrangements be amended as necessary to reflect this.

3 Overview of the Devon Pension Fund

(Councillor Greenslade declared a personal interest in this matter by virtue of being the Vice Chairman of Devon Somerset Fire Authority).

The Board received the Report of the County Treasurer (CT/15/57 - text only | pdf CT/15/57) and a detailed presentation outlining the Investment and Administrative aspects of the Pension Fund, managed by the Investment and Pension Fund Committee.

The presentation covered the governance structure of the Pension Fund, the key responsibilities of the Administering Authority, funding sources, the Actuarial Valuation, investments, fund management, pension benefit calculations (including the change to a Career Average Revalued scheme in April 2014), the administration team s performance and future plans and challenges faced, for both the investment and administration aspects.

In response to questions raised the County Treasurer advised that:

opportunities for cost reductions through collaboration with other Funds would be considered in future;

it was the role of the Investment Pension Fund Committee to select new fund managers;

reporting mechanisms were in place to manage the performance of fund managers and that action would be taken by the Investment Pension Fund Committee to terminate mandates where appropriate;

investment advice and guidance was provided to the Investment and Pension Fund Committee by an Independent Investment Advisor;

the administration team used CIPFA benchmarking to monitor its performance and that, although still below the national average, the cost per pension scheme member had increased slightly in 2013/14 due to a one off investment in a new IT system;

the merging of administrative teams to form Peninsula Pensions between Devon and Somerset County Councils was primarily a cost saving venture and that savings would begin to be realised in the coming financial years;

plans for growing Peninsula Pensions further in the future would be considered, where beneficial to the Fund;

new developments such as the Member Self Service online facility were also helping to reduce administrative burdens and realise savings;

the cost of administering the Devon Somerset Fire Pension Scheme (which had historically been administered by Devon County Council) was calculated on a time spent basis and the Devon Somerset Fire Pension Fund charged accordingly;

cost of administering the Avon and Somerset Police Pension Scheme (which had historically been administered by Somerset County Council) had been charged at a flat rate, and that this rate had recently been renegotiated and increased;

following changes to pension regulations the administration team had dealt with a number of enquiries from pension scheme members interested in transferring their pension to buy annuity elsewhere, but that no administrative cost had been charged to those who chose to take up this option.

The Board also discussed whether the Investment and Pension Fund Committee should consider introducing fees for specific fund member service requests.

4 Minutes of the Investment and Pension Fund Committee

The Board received the Report of the County Treasurer (CT/15/58 - text only | pdf | supplementary information CT/15/58) on the composition and purpose of the Investment Pension Fund Committee together with the minutes of the meeting held in 12 June 2015.

In response to questions raised at the meeting the County Treasurer undertook to circulate the briefing note referred to at Minute *81 to members of the Board.

5 Statutory Statements Statement of Investment Principles

The Board considered the Report of the County Treasurer (CT/15/59 - text only | pdf | supplementary information CT/15/59) outlining the requirements of the Statutory Statements, focusing in particular on the Statement of Investment Principles.

In response to questions raised the County Treasurer advised that:

the Pension Fund is required to include a statement in the Statement of Investment Principles where it adopts any of the higher limits as set out in the Investment Regulations, and that the Devon Fund had recently adopted the upper limit in relation to investments in any single insurance contract and this was laid out in the Statement of Investment Principles;

if necessary, the Investment and Pension Fund Committee could liquidate certain assets and hold them as cash.

It was AGREED

(a) that the County Treasurers Investment Management Performance Briefing Note be shared with members of the Pension Board on a regular basis;

(b) that all four of the Statutory Statements be brought to meetings of the Board over the course of each year.

6 Devon Pension Fund Internal Audit Report 2014/15 and Audit Plan 2015/16

The Board considered the Report of the Head of Devon Audit Partnership (CT/15/60 - text only | pdf | supplementary information CT/15/60) outlining the audit work undertaken in 2014/15, giving reasonable assurance on the adequacy and effectiveness of the Fund s internal control environment, and providing details of the audit plans for 2015/16 which allowed for 40 and 45 days of internal audit support for the Pension Fund and Peninsula Pensions respectively.

In response to Members questions the County Treasurer and the Head of Devon Audit Partnership advised that:

the backlog of refund work identified during auditing was in part due to the impact of changes in legislation in this area, and had now been cleared;

one incorrectly calculated strain payment identified during auditing was considered to be an isolated incident and predominantly down to human error;

going forward the Investment Pension Fund Committee would consider the Audit Report s recommendation that they should receive quarterly performance information on custodian services.

The Board also raised concerns around the lack of a formal tender exercise undertaken prior to the appointment of the Independent Advisor in 2010 and the absence of measures currently in place to monitor the performance of the Advisor.

It was AGREED that the County Treasurer be asked to provide clarity around the process used to appoint the Independent Advisor and any plans to implement performance monitoring in this area, to enable the Board to discuss any further action necessary at a future meeting.

7 Devon Pension Fund Risk Register

The Board considered the Report of the County Treasurer (CT/15/61 - text only | pdf | supplementary information CT/15/61) highlighting the key risks affecting the Pension Fund, current processes in place to mitigate the risk and planned improvements to provide further assurance.

In response to questions raised the County Treasurer advised that:

the risk register had been produced inline with guidance provided by the Pension Fund s internal auditors and took into account both financial and reputational risk;

any changes to the risk register would be brought to the attention of the Investment Pension Fund Committee and the Devon Pension Board;

the pensioner pay run was held in the middle of the month, with the pension paid on the last working day of the month, which in conjunction with a 7 day disaster recovery plan, should mitigate the impact of any IT system failure.

It was AGREED that the Risk Register be updated to clearly identify the Risk Owner for each risk listed.

8 Training Plan 2015/16

The Board considered the Report of the County Treasurer (CT/15/62 - text only | pdf | supplementary information CT/15/62) setting out the training to be provided over the coming year, to ensure that both the Investment and Pension Fund Committee and the Pension Board had the knowledge and skills required by the CIPFA Code.

The County Treasurer advised the Board that an in house self assessment tool for Members of the Investment and Pension Fund Committee and the Pension Board was currently being developed.

It was AGREED that a Knowledge and Skills Guide be provided for the Board, setting out the specific knowledge and skills expected of members to meet the requirements of both the CIPFA Code of Practice and Section 248A of the Pensions Act 2004, and providing details of the relevant sections of key legislation and guidance relating to this.

9 Future Work Programme

The Board considered the Report of the County Treasurer (CT/15/63 - text only | pdf CT/15/63) outlining the proposed future Work Programme for the Board.

Members acknowledged that the Work Programme, including standing items, would be developed over time and would be informed by issues raised at the both the Board s meetings and at training sessions. Members of the Board noted that the November training session on the Pension Fund s performance could be used to inform to the future Work Programme on this topic.

It was AGREED

(a) that the Work Programme as laid out in the Report be implemented, subject to an amendment to bring all four of the Statutory Statements to the Board over the course of each year, and to the addition of the draft Pension Fund Internal Audit Plan for 2016/17 in April 2016;

(b) that the County Treasurer provide the Board with a lifecycle of reports and events affecting the Pension Fund, to help inform the Board s Work Programme.

10 Dates of Future Meetings

The date of the next meeting of the Devon Pension Board was Thursday 22 October 2015.

It was AGREED that future meetings of the Pension Board begin at 10.30am, preceded by an informal briefing session for members at 10am.

The meeting started at 10.00am and finished at 12.17pm

The Minutes of the Committee are published on the County Council s Website at: