Agendas, Meetings and Minutes - Agenda and draft minutes

Agenda and draft minutes

Venue: County Hall, Worcester

Contact: Simon Lewis, Committee Officer 

No. Item

Available papers

The members had before them:


A.    The Agenda papers (previously circulated); and


B.    The Minutes of the meeting held on 31 October 2018 (previously circulated).


Apologies (Agenda item 1)




Declarations of Interest (Agenda item 2)


Mr K Bray declared general interests in his role as the Forum Officer of the Local Authority Pension Fund Forum (LAPFF) - the Worcestershire Fund is a long-standing Forum member and in relation to work he undertook with a firm of US lawyers who were involved with Shareholder Litigation and had the County Council as one of its clients.



Confirmation of Minutes - 31 October 2018 (Agenda item 3)

To confirm the Minutes of the meeting held on 31 October 2018 (previously circulated)


RESOLVED that the Minutes of the meeting held on 31 October 2018 be confirmed as a correct record and signed by the Chairman.


Pensions Committee - 28 November 2018 and 21 January 2019 (Agenda item 4)

Pensions Committee 28 November 2018

·         Equity Protection

·         Administering Authority - Administration Update

·         Pensions Investment Update

·         Government Actuary Department (GAD) Pension Review Update

·         Risk Register

·         Stewardship Compliance Statement

·         LGPS Central update


Pensions Committee 21 January 2019

·        Local Governments Pension Scheme Central (LGPSC) Budget and Business Plan 2019/20

·        Funding Strategy Statement update for changes to LGPS regulations

·        Covenant Monitoring update.


The Agenda papers and Minutes have previously been sent to you (apart from 21 January Minutes which will be sent in due course). Please bring your copy with you to the meeting.


The Board received the Agenda papers and Minutes of the Pensions Committee meetings held on 28 November 2018 and 21 January 2019. Members received a brief summary and commentary on various items considered by the Committee.


Equity Protection

·         The external providers of the equity protection policy had a vested interest in this Fund continuing with their policy. It was important that the Committee made a decision on equity protection based on the benefits to the Fund going forward

·         Rob Wilson advised that an Asset Allocation Review had been commenced which would be carried out alongside the Triennial Valuation. As part of this process, external advisors had been commissioned to consider the appropriate approach to equity protection for the Fund. The Fund’s actuary was keen for a decision to be made prior to the next valuation and in March, officers would be discussing with the actuary the impact of equity protection on employers’ contributions

·         It would be helpful to have a clear understanding of the impact of equity protection on the Fund in monetary terms. Rob Wilson indicated that this information would be reported to the March Committee meeting


LGPS Central Update

·         The Board noted the concerns expressed by the Pensions Committee about LGPS Central at its meeting held on 28 November 2018 and offered its support to the Committee in its views.


Funding Strategy Statement update for changes to LGPS regulations

·         The key issue to note in the Statement was that the target recovery period was 18 years at the last valuation. Rob Wilson responded that the target recovery period would be reassessed at the next valuation. At the last valuation, the Fund was 75% funded. It was now 92% funded which would impact on the deficit recovery period.


Covenant Monitoring

·         Rob Wilson explained that the Administering Authority had not yet received all this year’s employer responses to requests for covenant monitoring information. In future it was hoped that employers would have a better understanding of what was necessary and response rates would improve

·         Was the actuary likely to change its view on employer contribution rates? Rob Wilson advised that it was possible that the actuary could say that unless an employer provided a response to the Fund’s request for covenant monitoring information then the rate could be set for the next three years with no way of changing it. Bridget Clark added that the Pension Regulator provided guidance on covenant reviews

·         In response to a query, Rob Wilson commented that work was being concentrated on the larger employers as well as those employers rated as a red risk.


LGPS Central Budget and Business Plan 2019/20

·         The presentation of the Budget and Business Plan by LGPS Central was poor and lacked a clear Executive Summary

·         The proposed budget had a disproportionate impact on certain funds within the Pool and this was a particularly concerning development for this Fund. Since the introduction of the pooling arrangements, the outcome at the end of the recovery period for the Fund would be a  ...  view the full minutes text for item 122.


Administration Strategy (Agenda item 5) pdf icon PDF 65 KB

Additional documents:


The Board considered the Administration Strategy.


In the ensuing debate, the following points were raised:


·         Bridget Clark indicated that the Administration Strategy had been brought to the Board for comment as part of the consultation exercise. It was hoped that the language in the Strategy was easy to understand. A copy had been issued to all employers with the aim of encouraging employers to be aware of their responsibilities

·         In response to a comment, Bridget Clark acknowledged that some of the professional advisors set out in the further information section of the Strategy had been listed incorrectly and undertook to revise the list accordingly.


The Board noted the Worcestershire Pension Fund Administration Strategy.


Work Plan (Agenda item 6) pdf icon PDF 24 KB

For review/action by the Board.


The Board considered its work plan.


The Board noted its work plan.


Any Other Business (Agenda item 7)


McCloud Judgement

The Chairman indicated that a challenge had been made under age-discrimination legislation to the arrangements for the cut-off period for the transitional protection for employees within 10 years of retirement. The Court of Appeal had subsequently upheld this challenge. Rob Wilson commented that the implications for members of the Fund was that potentially their contributions would either stay the same or go up. Bridget Clark added that the Government was appealing this decision. As a result of this decision a degree of uncertainty had been created about the cost cap.


Strategic Asset Allocation Review

The Chairman commented that the role of the pool was essentially to select stock however he emphasised that the key decisions rested with the Fund in terms of sourcing key markets. This issue would be a main focus for the Board going forward.