Agenda item

Report attached and verbal update to be given by officers.

Members received a document which outlined how the London Borough of Havering complied with The Pensions Regulator’s (TPR) Code of Practice No. 14 Governance and Administration of Public Service Pension Schemes (the TPR Code) in relation to the management of the London Borough of Havering Pension Fund, which is part of the Local Government Pension Scheme (LGPS).

The document highlighted all the key elements of the TPR Code and evidenced whether the London Borough of Havering met these areas of best practice.  A Compliance Summary Table was circulated at the meeting and members agreed that Section B, Knowledge and Understanding and Section E, Managing risk and internal controls, would be discussed at the meeting due to a number of TPR requirements being reported as partially compliant.

The following sections were discussed and points noted:

Section B - Knowledge and Understanding

B8 – Are all pension board members investing sufficient time in their learning and development?  - Once an annual training plan had been established, the TPR requirement would be fully compliant.

B9 – Does the Fund offer pre-appointment training for new pension board members or mentoring by existing members? – Pre-appointment training had not been offered, however potential new pension board members were invited to discuss the roles and referred to yourpension.org where roles and responsibilities were explained.  Induction training had been delivered late to new members and in future would be delivered in a more timely manner to ensure that the TPR requirement was fully compliant. It was agreed that the section be amended to state ‘fully compliant’. 

B12 – Have the pension board members completed the Pension Regulator’s toolkit for training on the Code of Practice number 14? – Pension board members were responsible for completing the online training module.  It was agreed that this requirement remain at partially compliant as part of ongoing member development.

Section E - Managing risk and internal controls

E1 – Is there an agreed process for identifying and recording scheme risks? -

There was a process for identifying and recording scheme risks.  Internal controls of the scheme assets included monitoring these quarterly and presenting formal reports to the Pensions Committee and risk was addressed as part of the quarterly monitoring processes.  Risk implications were a standard inclusion in the reports to the Pensions Committee and the Local Pension Board.  There was a need to ensure that the risk register was maintained and current.

E2 – Does the fund have an adequate process to evaluate risks and establish internal controls? - Work was ongoing with LPP regarding procedures on admission agreements and documenting procedures would be built up over time.  Internal documentation was currently under review.

E3 – Does the Administering Authority have a risk register to record all risks identified and action taken?  - The risk register had not been updated since June 2015, however it had been identified on officer’s work plan to be reviewed.

E4 – Does the Administering Authority review the effectiveness of the risk management and internal control systems of the Fund? – The requirement was non-compliant due to the non-maintenance of the risk register, however once adequate processes were in place to evaluate risks and internal controls established, the requirement would be reassessed.  It was requested that once internal controls had been reviewed, that internal audit be asked to carry out a check to ensure that procedures were sufficiently robust.

E5 – Does the Administering Authority regularly review the risk register? – Discussed under E3 above.  Once reviewed, the revised Risk Register would be presented to the Pension Committee. 

E6 – Is there a standing item on the Pension Board agenda to review scheme risks? – Officers were requested to seek confirmation as to the best method to cover off this requirement.

E7 – Does the Administering Authority have adequate systems, arrangements and procedures (internal controls) in place for the administration and management of the Fund and are they documented? – There were a large range of internal controls in place and these are currently under review. 

E8 - Do these procedures apply equally to outsourced services, are internal controls reflected in contracts with their party providers and is there adequate reporting in relation to those controls? – Confirmation to be sought on whether the Council’s AVC arrangements with Prudential and Standard Life need to be included in this section.   In response to a change in legislation, confirmation as to whether the products remained fit for purpose was required.  A review of the AVC providers had started – Officers to determine how to progress this review.

It was requested that an update on actions be provided at the next meeting.

It was agreed that the following priorities be discussed at forthcoming meetings in the following order:

i)          Conflicts of interest (C) and Maintaining Contributions (G)

ii)         Maintaining accurate member data (F) and Providing Information to members and others (H)

iii)       Internal Dispute Resolution (I) and Publishing information about schemes (D)

It was agreed that section A, Reporting Duties and section J, Internal Dispute Resolution were not priorities as they were fully compliant.

Actions:

i)          Once internal controls and an adequate process to evaluate risks are in place, CB to contact Sarah Bryant to suggest internal audit carry out a review to ensure that procedures are sufficiently robust.

ii)         Compliance checklist (E6) – Is there a standing item on the Pension Committee agenda to review scheme risks? To seek confirmation as to what was required – Debbie Ford

iii)       Compliance checklist (E7) - To seek confirmation on whether the AVC arrangements with Prudential and Standard Life need to be included in this section – Caroline Berry

An update on actions from sections B & E of the compliance checklist to be provided at the next meeting – Debbie Ford and Caroline Berry.