The report from the City Treasurer is attached. Guidance on the creation and operation of Pension Boards and Westminster’s Pension Board’s Terms of Reference are also attached.
5.1 David Hodgkinson (Assistant City Treasurer) introduced the report and advised that it was a new statutory requirement for local authorities to have Pension Boards. The Board’s main functions included acting as a scrutiny body to the Pension Fund Committee, including reviewing the work of the Committee, the administering of the Pension Scheme and to ensure that regulations were being complied with. David Hodgkinson advised that training would be provided to help the Board have a greater insight into the Pension Fund and he asked Members to consider what they wanted from the training, what type of scrutiny should the Board undertake and whether Members wished to attend Pension Fund Committee meetings.
5.2 During Members’ discussions, clarification was sought as to whether the Board’s primary role was to undertake scrutiny of decisions made in respect of the Fund and whether the Chair of the Pension Fund Committee would attend Pension Board meetings. A Member emphasised the importance of training, particularly as Members had legal obligations to adhere to. He suggested that scrutinising the way the Pension Fund Committee challenged the decisions made by investment managers would be an appropriate function for the Board, as well as how investment managers were chosen and how often they were rotated. He added that reviewing the Fund’s performance and ensuring robust measures were in place were also important roles for the Board to play.
5.3 Members suggested benchmarking of performance of Fund Managers and the costs and fees involved should be looked at. It was suggested that the Board should receive the same reports that the Pension Fund Committee received. It was also suggested that the Board receive the same training as Pension Fund Committee members, although it was remarked that there should not be undue replication as the Board’s role differed from that of the Committee. A Member suggested that a comparison of the effectiveness and costs between when the HR aspect was operated under LPFA and the new contract under Surrey County Council be undertaken.
5.4 In reply to the issues raised, David Hodgkinson referred to the role of the Board as set out in the report that emphasised its functions in securing compliance with the Local Government Pension Scheme (LGPS) governance regulations and other relevant legislation concerning governance and administration of the LPGS. The Board also played a role in securing compliance with any requirements imposed by the Pensions Regulator and in ensuring effective and efficient governance and administration of the Scheme. David Hodgkinson added that the role of the Board was to review, assist and monitor the administration of the Scheme, which was distinct from the Pension Fund Committee’s role in making operational and investment decisions concerning the Fund.
5.5 Nikki Parsons (Pension Fund Officer) added that the Board could consider the decisions made by the Pension Fund Committee and Board Members could also attend Pension Fund Committee meetings as observers. The Board heard that the Chairman of the Pension Fund Committee was not intending to attend Pension Board meetings, however he had suggested a meeting with the Chairman of the Pension Board. Nikki Parsons advised that the training would be tailored to help Members understand the role of the Pension Board and in helping its review and monitoring functions.
5.6 Trevor Webster (Senior HR Manager) stated that the HR aspect of the Fund had been outsourced to Surrey County Council. He advised that information from Surrey County Council could be provided to Members, however he suggested that a programme detailing what information the Board wanted was sent well in advance to Surrey County Council in order to ensure there was sufficient time to compile the information. The Board noted that BT, who had a working relationship with Surrey County Council, were responsible for the payroll function.
5.7 The Board agreed to a Member’s suggestion that it should receive the same reports and at the same time that the Pension Fund Committee received. Members then discussed the frequency of meetings for the Board. The specific dates would be agreed later in the year as the Board formulated an idea as to when would be appropriate. It was agreed that the Pension Board meet on a quarterly basis, reflecting the same frequency that the Pension Fund Committee met. The Board noted the Terms of Reference and discussed the possibility of nominating substitute Members. Christopher Smith (Scheme Member Representative) advised that he wished to nominate a substitute from Unison, Jim Howard, who had received substantial training and had attended Pension Fund Committee meetings. He added that it was important that substitutes attended the same training that Members received. Susan Manning (Scheme Member Representative) advised that there was no-one in her organisation sufficiently acquainted with the Pension Fund to be nominated as a substitute. She enquired if a written submission would be accepted in the case of absence from the meeting and the Chairman indicated that this would be acceptable. It was noted that Dr Norman Perry (Scheme Member Representative and Marie Holmes (Employer Representative) would not be able to nominate a substitute.