Agenda and minutes

Pension Committee - Tuesday, 15th March, 2022 7.00 pm

Venue: Civic Offices, St Nicholas Way, Sutton SM1 1EA

Contact: Andy Gemmell, Committee Services Officer Tel: 020 8770 4990 | Email: committee.services@sutton.gov.uk

Media

Items
No.	Item
26.	Welcome and introductions Minutes: The Chair, Councillor Jill Whitehead, welcomed those present and those watching on the live stream.
27.	Apologies for absence and declarations of interest View the background to item 27. Minutes: There were no apologies for absence.
28.	Minutes of the previous meeting View the background to item 28. To approve as a correct record the minutes of the meeting held on 21 September 2021. Supporting documents: Minutes , 21/09/2021 Pension Committee , item 28. PDF 66 KB Restricted enclosure 5 View the reasons why document 28./2 is restricted Minutes: RESOLVED that : 1. the minutes, including the exempt section, of the meeting held on 21 September 2022 be agreed as an accurate record.
29.	Any urgent business View the background to item 29. To consider any items which, in the view of the Chair, should be dealt with as a matter of urgency because of special circumstances (in accordance with S100B(4) of the Local Government Act 1972). Minutes: There was no urgent business.
30.	Governance Review Supporting documents: (5) Governance Review_ (R) _ Pension Committee _ 20220315 , item 30. PDF 171 KB (5a) Appendix A - Governance Review - Sutton and Kingston Pension Funds - Summary report - issued 12112021 - Sutton Fund , item 30. PDF 430 KB (5b) Appendix B - Governance Review Actions 31_12_21 - Sheet1 , item 30. PDF 77 KB Minutes: The Head of Pensions Investments and Richard Simpson, Strategic Director of Resources and Dan Kanaris, AON presented the report. Members discussed inclusion of members of the committee from roles other than that of elected members, such as a Trade Union representative. The Head of Pensions Investments explained that the Committee had agreed the addition of Co-optees to the committee at its meeting in June 2021, and that this would be recommended to Council in May, and a report updating the Pension Committee on progress would be presented to the June 2022. Members discussed the importance of training for members of the committee to ensure that they have the required understanding of the decisions presented. They also requested that training should be short and specific, and be for Sutton Members only rather than shared with Kingston. Members also asked that arrangements including the timing of training suit the needs and commitments of all members of the committee. Officers noted this request, and it would be considered for the members of the newly formed committee formed following the May election. Officers confirmed that an Induction session was being planned for the newly formed committee which would be for Sutton Members only. Officers explained that planned training is usually linked to upcoming agenda topics, and the requirement was that Members of the Committee had a working knowledge of topics on the agendas. The Head of Pensions Investments explained that the LBS Pension Fund had received a Green Flag in the Governance Review, and the only weakness identified had been the lack of a Conflict of Interest policy, which had now been introduced. The requirement for a Conflict of Interest policy for LGPS funds had recently become a mandatory requirement and few funds had had such a policy in place in the past. Previously conflicts of interest had previously been managed through Councils’ policies, as had been the case for the Sutton fund, rather than funds having a specific policy. Resolved that: 1. The Governance Review and Recommendations Report (page 1 page 11 agenda item 5) Governance Review be noted 2. The Officers’ responses to the recommendations and action plan for implementation included in Appendix B to the report be noted. 3. The process for selection of the scheme member and employer representatives for the Pension Committee is in progress be noted.
31.	Pensions Administration Update Supporting documents: (6) Pensions Administration Update_ (R) _ Pension Committee _ 20220315 , item 31. PDF 190 KB Minutes: The Head of Insurance and Pensions Administration presented the report. There were no further questions. Resolved that: 1. The report be noted
32.	McCloud Remedy Project Update Supporting documents: (7) McCloud Remedy Project Update_ (R) _ Pension Committee _ 20220315 , item 32. PDF 171 KB (7a) Sutton and Kingston - Project Charter for McCloud implementation v1.3 signed , item 32. PDF 720 KB Minutes: The Head of Insurance and Pensions Administration presented the report. Members discussed the arrangements for final salary schemes and career average schemes. There was further discussion on the arrangements for members of the fund whose benefits were accrued, so that the benefits covered periods which were under both final salary and protected career average arrangements. The Head of Insurance and Pensions Administration explained that following the finding of discrimination, the government would be amending the relevant regulations, which were now expected to be in place from October 2023. Resolved that: 1. The report and project charter be noted.
33.	Pension Fund Conflict of Interest Policy Supporting documents: (8) Pension Fund Conflict of Interest Policy_ (R) _ Pension Committee _ 20220315 , item 33. PDF 158 KB (8a) Appendix A - Sutton PF Draft Conflict of Interest Policy , item 33. PDF 146 KB Minutes: The Pensions Finance & Investments Manager presented the report. There were no further questions. Resolved that: 1. The London Borough of Sutton Pension Fund Conflicts of Interest Policy at Appendix A of the report be approved
34.	Triennial Actuarial Valuation Timeline Supporting documents: (9) Triennial Actuarial Valuation Timeline_ (R) _ Pension Committee _ 20220315 , item 34. PDF 165 KB (9a) Appendix A - Outline Timetable for the 2022 Valuation , item 34. PDF 54 KB Minutes: The Head of Pensions Investments presented the report. There were no further questions. Resolved that: 1. The proposed timeline for completing the Actuarial Valuation in line with statutory requirements be noted.
35.	Pension Fund Risk Management Policy and Risk Register Supporting documents: (10) Pension Fund Risk Management Policy and Risk Register_ (R) _ Pension Committee _ 20220315 , item 35. PDF 175 KB (10a) Appendix A - LB Sutton draft Risk Policy , item 35. PDF 177 KB (10b) Appendix B - Risk Register 31.12.21 - LBS Pension Fund - Risk Register , item 35. PDF 103 KB Minutes: The Pensions Finance & Investments Manager presented the report. The Pensions Finance & Investments Manager confirmed that the conflict in Ukraine had been added to the risk register. Members discussed the definitions of likely and unlikely as related to the percentage figures, and noted that the categories of likely and unlikely formed a combination of a) the likelihood of a risk and b) in addition to how frequently it was likely to occur. Resolved that: 1. The London Borough of Sutton Pension Fund Risk Management Policy at Appendix A of the report be approved. 2. The London Borough of Sutton Pension Fund’s current Risk Register be noted
36.	Work Programme Update Supporting documents: (11) Work Programme Update_ (R) _ Pension Committee _ 20220315 , item 36. PDF 159 KB Minutes: The Senior Pensions Governance Lead presented the report. There were no further questions. Resolved that: 1. The updated work programme for the Committee be noted.
37.	Investment and Manager Performance to 31 December 2021 Supporting documents: (12) Investment and Manager Performance to 31 December 2021_ (R) _ Pension Committee _ 20220315 , item 37. PDF 179 KB (12a) Appendix A - Ukraine and Russia Action Checklist (1) , item 37. PDF 577 KB (12b) Appendix B - London Borough of Sutton - Quarter to 31 December 2021 , item 37. PDF 3 MB Restricted enclosure 31 View the reasons why document 37./4 is restricted Restricted enclosure 32 View the reasons why document 37./5 is restricted Minutes: The Senior Finance Lead - Pensions Investments & Reporting presented the report. The Senior Finance Lead confirmed that exposure of the fund related to the Russia/Ukraine conflict was low at 0.0024%. The Head of Pensions Investments explained that the funding ratio of the LBS Pension Fund at the end of December 2021 was 96%, and this was an increase compared to the March 2019 position of 90%. However, recent events could mean that the funding position at 31 March 2022 might not follow the upward trajectory. The main potential impact being higher inflation rates on the liability side of the fund - it is for this reason inflation had been highlighted as a non-rewarding risk. On the asset side there was a potential impact that the value of the Fund at 31 March 2022 could lead to a £40m reduction which would result in assets being valued around £860m. Members asked about investment in gold, bitcoins and commodities. The Pensions Finance & Investments Manager explained that there was diversified growth in the funds, and that included commodities amongst the diversification, but there was no specific allocation to commodities, which were known to be volatile. Resolved that: 1. The performance of the Fund during the quarter ended 31 December 2021 be noted
38.	Exclusion of the public and press The following motion should be moved, seconded and approved if the committee wishes to exclude the public and press to deal with reports revealing exempt information: “That the public and press be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in paragraph X Schedule 12A of the Local Government Act 1972.” Minutes: The motion to exclude the public and press was moved by Councillor Jill Whitehead and seconded by Councillor Muhmmad Sadiq. Resolved that: 1. the public and press be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information as defined in paragraph 3 Schedule 12A of the Local Government Act 1972.
39.	Investment Strategy Implementation Supporting documents: Restricted enclosure 34 View the reasons why document 39./1 is restricted Restricted enclosure 35 View the reasons why document 39./2 is restricted Minutes: The minutes of this item were exempt.
40.	London Collective Investment Vehicle Update Supporting documents: Restricted enclosure 37 View the reasons why document 40./1 is restricted Restricted enclosure 38 View the reasons why document 40./2 is restricted Minutes: The minutes of this item were exempt.