Agenda item

The Committee considered the Pension Fund governance arrangements.

The report set out the background to the Pension Fund governance arrangements, the Council approved Pension Fund governance arrangements, the Pension Fund Policy Statement and Terms of Reference, the Pension Fund Scheme of Delegation, details of the arrangements for the appointment of the Chairman of the Pension Investment Advisory Committee.

In introducing the report, the Chief Financial Officer and the Human Resources - Service Centre Manager highlighted the following key points in the extended Scheme of Delegation to the Chief Financial Officer (CFO):

Investment and Reporting

·         No. 18 – This delegation would allow the CFO to rebalance the fund's assets so that it stayed in line with investment policy when the occasion demanded without unnecessary delay

·         Nos. 19 – 21 – These delegations allowed the CFO to make decisions on transactional activities following consultation with the Chairman and Vice-Chairman without the need to bring a report back to this Committee and thereby speeding up the decision-making process. In particular with the transfer of assets and cash, it would ensure that money was at the right place at the right time

·         No. 25 – This allowed the CFO to negotiate and agree fee discounts without delay and reduce the potential for lost opportunities to make savings

·         Nos. 27 and 28 – These delegations allowed the CFO to carry out the day-to-day Pension Fund business in a timely fashion

Administration

·         No. 29 - This delegation allowed the CFO in consultation with the Head of Legal and Democratic Services to implement the admission arrangements as quickly as possible 

·         No. 49 – Where disagreements arose, members of the Fund had the right of appeal. It was important that the CFO had the ability to respond to these issues as quickly as possible

·         Nos. 51 and 52 – This delegation allowed the CFO to manage assets and accept transfer values in a timely manner.

In the ensuing debate, the following principal points were raised:

·         Did the delegation of the transfer and allocation of assets have an impact on the Joint Property Vehicle? The CFO advised that this delegation related to the investments of the Pension Fund whereas the Place Partnership's responsibility related to the Council's property portfolio investments

·         Who was responsible for presiding over disagreements raised under the Internal Dispute Resolution Procedure in respect of administering authority matters? The Human Resources - Service Centre Manager advised that a complaint considered at Stage 1 of the complaints procedure would be presided over by the Pension Fund Manager or herself and should the complaint proceed to Stage 2 the presiding officer would be vice-versa

·         In response to a query about the role of the Pension Investment Advisory Committee, the CFO commented that the emphasis of the new Pension Scheme arrangements was that decisions were vested in this Committee whereas previously under the shadow pension arrangements, responsibility was vested in the CFO. The role of the Advisory Committee had not been diminished but representations were made to the Committee rather than to the CFO. There were a number of day-to-day decisions that were delegated to the CFO. These changes had been implemented to reflect best practise

·         In response to a query, the Human Resources - Service Centre Manager stated that there had been an increase in the uptake of requests from members for information but there had not been a significant number of members asking for estimates. The uptake of transfer of values would be continually monitored. The regulations provided that if you wished to transfer your pension funds to another Pension scheme, you could do so within 12 months of the date of employment. Any request outside the 12 month period would need to be agreed by the employer

·         The role of the Pension Board was effectively to act as a type of scrutiny committee. It was important that the agenda of the Pension Board mirrored that of this Committee. The Board would want to monitor the performance and Value for Money arrangements of the Pension Fund. There was a danger that the Board duplicated the work of the Committee but hopefully this would be avoided

·         The CFO advised that he was confident that an individual appointed to the role of Independent Chairman of the Pension Board would have the appropriate knowledge and skills for the role. The role of the Independent Chairman of the Board would be to liaise with the Chairman and Vice-Chairman of this Committee to ensure value was added to the process and to avoid duplication.

  RESOLVED that:

a)    the updated Pension Fund Governance Policy Statement be noted;

b)    the Pension Committee Terms of Reference be noted;

c)    the Pension Board Terms of Reference be noted;

d)    the extended Pension Fund Scheme of Delegation be endorsed; and

e)    the arrangements for appointing the Chairman of Pension Investment Advisory Panel be noted.