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Agenda and minutes

Venue: Virtual meeting. To view the meeting, please use the link below

Contact: Gerry Rufolo 01392382299  Email: gerry.rufolo@devon.gov.uk

Note: To be conducted in line with The Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020: To see the live stream, copy and paste this link into your browser: https://teams.microsoft.com/l/meetup-join/19%3ameeting_NTYyNWQ4ZDAtMjY5NS00ZjQ2LTg3OGYtNzAzZWViYWQ1NTkw%40thread.v2/0?context=%7b%22Tid%22%3a%228da13783-cb68-443f-bb4b-997f77fd5bfb%22%2c%22Oid%22%3a%223d9c340a-0429-4b53-a982-1317fcf719c1%22%2c%22IsBroadcastMeeting%22%3atrue%7d 

Items
Note No. Item

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203.

Standards Committee

Minutes:

The Chair welcomed Mr I Hipkin who was attending the meeting in his  capacity as a Co-opted Member of the Council's Standards Committee to observe and monitor compliance with the Council’s ethical governance framework.

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204.

Minutes

Minutes of the meeting held on  22nd January 2021 (previously circulated)

Minutes:

RESOLVED that the Minutes of the meeting held on 22 January 2021 be signed as a correct record.

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205.

Items Requiring Urgent Attention

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

Minutes:

No item was raised as a matter of urgency.

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206.

Membership

Two representative board member positions expire in 2021.  The Independent Board member term is also subject to renewal.

Minutes:

The County Treasurer reported that two Fund Member representatives’ positions would expire in 2021.

 

The Board supported the proposed continued membership of Mr A Bowman and Mr C Shipp for a further 4 years, subject to County Council approval at its meeting on 27 May 2021. The Independent Member Bill Nicholls would be retiring from the Board and the position was being advertised.  Members  passed their best wishes and thanks to Mr Nicholls for his service to the Board.    

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207.

Internal Audit Report and 2021/22 Audit Plan pdf icon PDF 220 KB

Report of the County Treasurer (CT/21/36), attached

Minutes:

The Board considered the Report of the County Treasurer (CT/21/36)

on the Head of the Devon Audit Partnership assurance opinion on the system of internal control of the Pension Fund and Peninsula Pensions.

 

The Head of the Devon Audit Partnership confirmed that the findings showed that following risk based reviews and sample testing, that there were no major weaknesses in the system of control.

 

The final audit reports also included an action plan which identified responsible officers, and target dates, to address control issues identified during the review. Implementation of action plans were subject to review during subsequent audits or as part of a specific follow-up process.

 

Overall, and based on work performed during 2020/21 and prior years, Internal Audit provided ‘reasonable assurance’ (previously substantial assurance) on the adequacy and effectiveness of the Fund’s internal control environment.

 

The Board’s discussion points with the Head of the Audit Partnership included:

 

·         methodology (both quantitively and qualitative) for the assessment of the performance of the Investment and Pension Fund’s Independent Adviser on which further information would be sought by the Head for a written response to Members;

·         definition of ‘reasonable assurance’ and ‘substantial assurance’, with the Board noting that whilst the overall finding was ‘reasonable assurance’ the majority of individual areas covered had rated ‘substantial assurance’;

·         the implications of the impending  McCloud/Sargent judgement had been excluded from the audit plans as the judgement was still subject to management consideration and actions if appropriate and could in future be included in audit plans as these were flexible and subject to change;    

·         confirmation that the management action plan relating to Employer Self-Service had now been completed and which was now not being supported by the current provider and Peninsula Pensions had opened negotiations with a software provider; and

·         confirmation that Peninsula Pension was now developing its own Communications Policy as well as being part of the overall communications strategy for the Pension Fund.

 

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

 

RESOLVED  that the Internal Audit Report for 2020/21 be noted and the comments as above be reported to the Investment and Pension Fund Committee.

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208.

Review of Attendance pdf icon PDF 81 KB

Report of the County Treasurer (CT/21/37), attached

Minutes:

The Board noted the Report of the County Treasurer (CT/21/37) on 

the Members’ attendance log. Overall attendance at training events and Board meetings had been good and there were no outstanding issues. 

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209.

Devon Pension Fund Risk Register pdf icon PDF 125 KB

Report of the County Treasurer (CT/21/38), attached

Additional documents:

Minutes:

(Councillor J Hodgson attended in accordance with Standing Order 25 (2) and spoke to this item and referred  to the lack of reference within the Risk Register relating to investment in companies associated with fossil fuels; and Councillor R Bloxham attended in accordance with the Standing Order and responded on behalf of the Investment and Pension Fund Committee (owner of the Risk Register) and referred to the investment industry leading work being carried out by the Brunel Partnership in this area on behalf of the Devon Fund and as referred to at F17 of the Risk Register)

 

The Board considered the Report of the County Treasurer on the Risk Register previously considered at its meeting on 22nd January 2021. The Register (attached to the Report) highlighted the key risks in relation to the Pension Fund, the 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. A one-page summary on risk management and the matrix used to assess risks was attached at Appendix 2.

 

The Investment and Pension Fund Committee was the ultimate risk owner for

the Pension Fund and the Risk Register was presented to the Committee on an annual basis. The register was last approved by the Committee at its

meeting held on 19th June 2020.

 

Any further risks which arose from future decisions by the Investment

and Pension Fund Committee or from changes in legislation and

regulations would be added, assessed, and mitigation actions identified.

 

Board Members in discussion with the Officers referred to:

·         the timeline for the Fund’s remaining non-Brunel holdings, comprising infrastructure and private debt investments which would not transition but  be held until the end of their various fund lives (on which more information would be sought for a written response to Members);

·         regular review and refreshment of the Investment Strategy last completed in 2018/19 with use of independent consultants in relation to F7 (Funding and Investments – Substantial changes to UK or global economies); 

·         F17: (Climate Change) referring to the Carbon footprint of the Fund and the significant reductions achieved as at 31 March 2019 and 31 December 2019 using the Weighted Average Carbon Intensity matrix which was widely considered to be the most accurate and Officers undertook to obtain more information for Members; and Officers also undertook to review the wording to give greater emphasis to the mitigation actions;

·         duplication of the risks identified at F12 and PP9 relating to potential transfer of pensions to other providers and which would now be reviewed by Officers; and

·         reassurance in regard to the high quality security arrangements in regard to Peninsula Pensions data (PP19) justifying the low risk rating. 

 

The identified actions and reviews would be carried out by the Officers.  

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210.

Pension Board Annual Report pdf icon PDF 116 KB

Report of the County Treasurer (CT/21/39), attached

Minutes:

The Board received and noted the Report of the County Treasurer (CT/21/39) on a draft of the Devon Pension Board Annual Report 2020/21 (appendix to this Report) which outlined the work undertaken by the Board during 2020/21. The Report highlighted the areas reviewed by the Board, and the key recommendations that had been reported to and acted upon by the Investment and Pension Fund Committee.

 

The Board’s Annual Report would be included in the Investment and Pension Fund Committee’s annual report which would contain the statement of accounts together with other information about the Fund’s performance during the year. 

 

The Board approved the draft subject to some minor drafting amendments  relating to the completion of all training by Members and to refer to ‘regular or quarterly’ review of the Risk Register.  

 

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211.

Training Review and 2021/22 Training Plan pdf icon PDF 205 KB

Report of the County Treasurer (CT/21/46), attached

Minutes:

The Board noted and received the Report of the County Treasurer (CT/21/46) on the proposed Training Plan for 2021 (at Appendix 1) in order to ensure that both the Investment and Pension Fund Committee and the Pension Board maintained the knowledge and skills required in accordance with the CIPFA Code.  A training needs analysis would be undertaken in the Autumn after the toolkit had been completed in order to identify areas of training for future events. The Training Plan had been reviewed to ensure that it reflected current best practise.

 

The Report also contained a register of attendance at each of the training events.

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212.

Funding Strategy Statement and Support Policies pdf icon PDF 506 KB

Report of the County Treasurer (CT/21/40), attached

Minutes:

(Councillor J Hodgson attended in accordance with Standing Order 25 (2) and spoke to this item and requested that the obligations arising from climate change policy be referred to in the Funding Objectives (section 4) of Funding Strategy Statement)

 

The Board considered the Report of the County Treasurer (CT/21/40) on a draft Funding Strategy Statement (FSS) prepared  in consultation with all participating employers. The purpose of the FSS was to explain the funding objectives of the Fund and how the cost of the benefits provided under the Local Government Pension Scheme were met though the Fund. It also defined the objectives in setting employer contribution rates and the funding strategy.

 

As a result of the new regulations and guidance, revisions were now proposed to the Funding Strategy Statement, and a revised version was attached at

Appendix 1 to this Report. The revised FSS made reference to two new

policies, one in relation to contribution reviews and one in relation to Deferred Debt Agreement and Debt Spreading Agreements (DSAs). These were also attached as appendices 2 and 3 to this Report.

 

Members’ discussion points with Officers included:

 

·         Ethical, Social and Governance (ESG) matters including climate change was referred to in the Investment Strategy Statement but could also be considered as part of this Statement;  

·         the appeals process referred to at section 6 of the Statement whereby Employers could appeal to this Board, on which further information would be provided by Officers relating to the powers of the Board;

·         the consultation timeline with Employers before consideration and approval by the Investment and Pension Fund Committee;

·         the triannual review process by the Actuary of the valuation of the Fund, subject to any major changes (involving Employers) which could trigger an exceptional review; and

·         the potential to include in the Risk Register the implications of any exit from the Fund by HE or FE institutions which the Officers undertook to review.       

 

It was MOVED by Councillor A Bowman and SECONDED by Councillor S Randall and

 

RESOLVED 

 

(a) that the revised Funding Strategy Statement set out at Appendix 1 to this Report be endorsed, subject to any changes arising from the above discussions;

 

(b) that the Contributions Review Policy set out at Appendix 2 to the Report be endorsed;

 

(c) that the Deferred Debt and Debt Spreading Agreement Policies set out at Appendix 3 to the Report be endorsed. 

 

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213.

Pension Board Budget Report pdf icon PDF 96 KB

Report of the County Treasurer (CT/21/41), attached

Minutes:

The Board considered the Report of the County Treasurer (CT/21/41) on the

proposed Board Budget for 2021/22, Monitoring Statement and forecast outturn position for the financial year ending 31st March 2021.

 

It was MOVED by Councillor C Slade and SECONDED by C Piper and

 

RESOLVED

 

(a) that the outturn for the Devon Pension Board budget 2020/21 be noted; and

 

(b) that the Devon Pension Board budget for 2021/22 be approved.

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214.

Investment and Pension Fund Committee pdf icon PDF 201 KB

Minutes of the Investment and Pension Fund Committee meeting held on 26th February 2021, attached

Minutes:

Councillors R Bloxham and J Hodgson attended in accordance with Standing Order 25 and spoke to this item.

 

Councillor Hodgson referred to the press release (copied to all members of the Council) on climate change policy on which she had received some comments.

 

Councillor Bloxham summarised the main points arising from the last meeting of the Investment and Fund Committee referring to the current value of the Fund and its recovery from the recent low in 2020 largely attributable to the pandemic, the climate change strategy being implemented by the Brunel Partnership involving positive engagement with companies, performance of the Brunel Patronships and delivery of savings as planned, and on the external advisers in relation to the investment strategy.  

 

The Board thanked Councillor Bloxham for the feedback and received the Minutes of the Investment and Pension Fund Committee held on 26 February 2020.

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215.

Peninsula Pensions Administration - Performance Statistics pdf icon PDF 170 KB

Report of the County Treasurer (CT/21/42), attached

Minutes:

The Board noted the Report of the County Treasurer (CT/20/42) on Peninsula Pensions’ internal service standard target and 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.

 

Members’ discussion points with the Officers included;

 

·         the small increase in outstanding cases which related to one pay roll provider and the general trajectory remained downwards;

·         Peninsula Pensions updated website;

·         ongoing work and planning in regard to the Mcloud Sergeant judgement; and

·         the increasing number of ‘self-service’ sign up by fund members which was encouraging.  

 

 

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216.

LGPS Update Report pdf icon PDF 70 KB

Report of the County Treasurer (CT/21/43), attached

Minutes:

The Board noted the Report of the County Treasurer (CT/20/43) on the latest developments affecting the Local Government Pension Scheme.

 

The Report covered the removal of the Exit Cap, the guaranteed minimum pension indexation, and proposed increase in the minimum retirement age.

  

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217.

Actions and Recommendations Trackers pdf icon PDF 148 KB

Report of the County Treasurer (CT/21/44), attached

 

Minutes:

(Councillor J Hodgson attended in accordance with Standing Order 25 and spoke to this item and referred to data relating to Fund investments in companies involved with fossil fuels. Councillor Bloxham attended in accordance with the Standing Order and responded and referred to the current data, active and positive engagement with companies and the good progress being made, as previously reported).

 

The Board received the Report of the County Treasurer (CT/21/44) on progress on completed actions arising from internal audits and Pension Board recommendations and requests.

 

The Report detailed the progress against last year’s audit plan many of which related to urgent pandemic responses. 

 

The next report would include the Audit Log (actions/progress) for the Investment Fund.

 

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218.

Future Work Programme pdf icon PDF 60 KB

Report of the County Treasurer (CT/21/45), attached

Minutes:

(Councillor J Hodgson attended in accordance with Standing Order 25 and spoke to this item and referred to the need to include updates on the climate change strategy. Councillor Bloxham attended under the Standing Order and responded and referred to performance as previously reported).

 

The Board received and noted the Report of the County Treasurer (CT/21/45) on the Board’s Work Programme over the next three meetings.

 

Member discussion points included:

 

·         the role of the Board in overseeing the work of the Investment and Pension Fund Committee, the regular reporting and Statements to that  Committee on Ethical, Social and Governance (ESG) policy and matters including climate change strategy and progress; and

·         future business would include reports on good governance currently being considered by the Scheme Advisory Board, the Pension Regulator’s Code of Practice, and a breaches report was being developed with the software provider; and completion of Audit Reports which Officers agreed to add to the programme as a standing item.

 

The programme would be amended as described above relating to future business.

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219.

Dates of Future Meetings

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

 

Tuesday, 13th July 2021

Monday 11th October 2021

Wednesday 2nd February 2022

Wednesday 4th May 2022

Minutes:

Tuesday, 13th July 2021

Monday 11th October 2021

Wednesday 2nd February 2022

Wednesday 4th May 2022


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