Agenda and minutes

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Items
No. Item

49.

APOLOGIES FOR ABSENCE AND ANNOUNCEMENT OF SUBSTITUTE MEMBERS

Minutes:

Apologies were received from Councillors Jason Frost and Stephanie Nunn together with John Giles and Andy Hampshire.

 

Councillor Ray Morgon attended as substitute for Cllr S Nunn and Councillor Dilip Patel attended as substitute for Cllr J Frost.

50.

DECLARATIONS OF INTEREST

Minutes:

There were no declarations of interest.

51.

FUNDING STRATEGY STATEMENT pdf icon PDF 138 KB

Additional documents:

Minutes:

Consideration was given to the report of Debbie Ford, Pension Fund Accountant, who detailed the salient aspects to the Committee.

Ms Ford indicated that the Funding Strategy Statement (FSS) was a statutory statement prepared in accordance with Regulation 58(4) Local Government Pension Scheme Regulations 2013 as amended.  It sets out the objectives of the Borough, in its capacity as Administrative Authority, for the funding of the London Borough of Havering Pension Fund. The Statement applies to all employers participating in the Fund.

The statement attached at Appendix 1 of the agenda is the Draft Statement for agreement by the Committee which has been distributed for comment to all participating employers in the Fund.  The closing date for the consultation was 10th February, 2017.  No comments had been received from other employers in the fund.

The final statement will be published and will take effect as of 1st April, 2017, being the second version of the FSS since the implementation of the 2013 LGPS regulations.

The FSS has been produced in consultation with The Fund’s actuary Hymans Robertson under the regulations and in accordance with the guidance published by CIPFA.

On agreement, the FSS will be updated and published on the Councils website.  It will also be appended to the minutes of the meeting.

 

It was noted that all of the reports under discussion at the meeting were linked and that there were no significant changes in the FSS other than formatting which is slightly changed in accordance with the revised guidance.

 

The Pensions Committee:

 

 Agreed the Funding Strategy Statement.

52.

2016 ACTUARIAL VALUATION DRAFT REPORT pdf icon PDF 206 KB

Additional documents:

Minutes:

Debbie Ford presented the 2016 Actuarial Valuation Draft Report to the Pensions Committee.  This had been prepared by the Fund’s actuary in accordance with Regulation 62 of the Local Government Pension Scheme Regulations, 2013 using the data supplied with assumptions applied and rates set as a result.

The report details the assumptions which had been agreed by the Council’s s151 Officer at the time, Andrew Blake-Herbert.

The report sets out the actuarial valuation of the assets and liabilities of the Pension Fund as of 31st March, 2017.

This report is a statutory report which must be published by 31st March, 2017 before which the actuaries will sign off the document.

The funding level of the Fund has improved since the last valuation in 2013 which was then at 61% but is now at 67%.  Contributions are collected from employers at 22% via payroll.

An extra £11 million was agreed as a lump sum payment and this has been allowed for in the Capital Strategy.

It was noted that salary growth is currently restricted but salary increases have been projected over a 20 year period which also takes account of scale increases which continue to be applied even in the absence of pay increases.  The projection amounts to 2.4% over the twenty year period.  Scale increases are at present automatic but under the new terms and conditions these will be based on developmental and performance related progression.

 

The Pension Committee:

 

Noted the DRAFT 2016 Actuarial Valuation Report presented at Appendix A of the agenda.

 

The final report will be attached to the minutes of the meeting.

53.

INVESTMENT STRATEGY STATEMENT pdf icon PDF 163 KB

Additional documents:

Minutes:

The Committee gave consideration to the report of Debbie Ford and the Draft Investment Strategy Statement (ISS).  This Statement is required by regulations and requires an administering authority, after taking proper advice to formulate an ISS which must be produced in accordance with guidance issued by the Secretary of State.

The ISS at Appendix 1 of the report sets out the London Borough of Havering’s policies, in its capacity as Administering Authority, for the investments of the Borough’s Pension Fund.

The authority will publish the final ISS no later than 1st April, 2017. This will be the first ISS published under the new regulations.  It sets out how investments will be made and assumes 4% growth.

 

It was noted that the ISS must include certain information as set out at paragraph 1.7 of the report and in line with regulations the authority must consult on the content of the Investment Strategy.  The draft ISS was distributed to all employers, the actuary, the Local Pension Board and Fund Managers in accordance with these regulations. No comments were received from the consultees.

 

The Committee noted the statement of compliance which demonstrates the Fund’s performance against the six Myners principles.  The principles were reviewed in accordance with the CIPFA guidance to show that the Fund is compliant but needs to consider further, Principle 5 - Responsible Ownership.

That is “Administering Authorities should recognise and ensure that their partners in the investment chain adopt the FRC’s UK Stewardship Code.”

 

It was indicated by Ms Ford that most investment decisions are now delegated to the Fund Manager and the authority are encouraged to sign up to the code and be more collaborative in approach.

 

The Pension Committee will be asked in the future to consider their membership of the Local Authority Pension Fund Forum (LAPFF) and the Pensions and Lifetime Savings Association (PSLA).  The LAPFF have indicated that a representative would be able to attend and deliver a presentation at a future Committee meeting. Members believed that would be helpful and look forward to receiving the report at the next meeting.

 

The Committee noted that the Fund has joined the London CIV with approximately 40% of the fund involved.  At present the CIV are not able to offer an infrastructure product but members are free to invest as they wish. Further focus is on bonds which will be considered in detail by the Bond Manager.  Any further matters will be brought back to Committee for decision.  The Global Equity Sub Fund has been developed which may become a future option.  Some money is held by managers which allows for investment as and when productive offers and schemes come up.

 

The Pension Committee:

 

·       Adopted the proposed Investment Strategy Statement as set out at Appendix A.

·       Agreed the administrative Authority’s position in respect of reporting compliance against the Myners investment principles as set out in Appendix D; and

 

·       Agreed to receive a further report and consider whether it is interested in becoming members of LAPFF and  ...  view the full minutes text for item 53.