Board ~ Pension Fund Public Session 13 th December 2016 Introductory Matters PF1773 Item No. 2

Transcription

1 Board ~ Pension Fund Public Session 13 th December 2016 Introductory Matters PF1773 Item No. 2 Apologies None received Declarations of interest No new declarations received in advance of the meeting. Skip McMullan declared a standing conflict with matters under discussion as the shareholder representative nonexecutive director of LPP. Minutes of the previous meeting The minutes of the Board Pension Fund Public meeting held on 4 th October 2016 are attached for formal approval. Matters arising Verbal update from the Board Strategic and Corporate Session in the morning of 13 th December Governance issues The formal approval of minutes is required under Standing Order 8. The dates of all Board and Committee meetings are posted on the corporate website along with the agenda for each meeting. Board is asked to: [1] Approve that the minutes of the Board Pension Fund meeting on 4 th October 2016 be agreed and signed as a true and accurate record. Report date: 25 th November 2016 Lead Officer: Ed Williams

2 Board Pension Fund s Public Session minutes of the meeting held on 4 th October 2016, at 169 Union Street, London, SE1 0LL, Room G.04 Present Board members Skip McMullan (Meeting Chairman in Sir Merrick s Kerry Adby absence) Anthony Dalwood Mike O Donnell Tamlyn Nall Terence Jagger Cllr Stephen Alambritis Principal Officers Mike Allen Managing Director Tricia Clark Financial Controller/s151 Officer Ed Williams Monitoring Officer In attendance Officers Greg Smith Director of Strategic Projects & Group Company Secretary, LPP Chris Rule CIO & Investments Managing Director, LPP I) Luke Webster GLA representative Guests Anastasia Klimenko EA to the Managing Director Minutes Rebecca Pitt Governance Advisor, LPP Apologies Sir Merrick Cockell (Chairman Non-Attendance) The Meeting Chairman (Skip McMullan - SM) declared that the meeting was quorate and the Pension Fund s Public Session was open. The Meeting Chairman (SM) welcomed the members of the public, in particular those from Divest London. 1. PF 1755 INTRODUCTORY MATTERS The Executive Report PF 1755, which included the minutes and action points from the public meeting held on 5 th July 2016, was provided to the meeting for formal approval. No new declarations of interests were received, apart from the Meeting Chairman s (SM) standing conflict as the LPP Shareholder Director. Ed Williams provided an overview of the matters considered in the Strategic and Corporate session: The Board had approved the minutes of the Corporate & Strategic Session of the LPFA Board meeting on 5 th July, noted the factual changes to the Constitutional Document and had approved the signatory lists subject to some technical amendments. Page 2 of 6

3 Barnett Waddingham had presented the final valuation assumptions and the results of the Triennial Valuation for The Board noted and agreed the proposed assumptions. The Funding Strategy Statement had also been agreed prior to further consultation with Fund Employers. It was noted that the LPFA Managing Director had provided an overview of the contracts administration performance for the LPFA and third parties and that it was expected for London Fire and Emergency Planning Authority (LFEPA) to sub-contract with effect from 1 st November The Board discussed the action points from the LPFA Board Awayday, and it had been noted that these would be used to help form the outline of the Strategic Policy Statement for 2017 onwards. The LPP Group Company Secretary had provided an update detailing the progress made during July-September 2016 in the implementation and integration of the LPP. The Board had also noted the progress made on the expansion of the Greater Manchester Pension Fund & LPFA infrastructure platform (GLIL). The Board had been advised that a governance review had taken place and that the outcome would be shared at the following Board meeting. The regular investment report had been presented; the Board had specifically noted the strong performance on equities. An overview had also been provided on passive breaches against the IMA and AMA. The minutes and actions from the Audit and Risk Committee had been considered and the revised Group Investment Strategy (GIS) had been approved. [1] APPROVED the minutes and actions of the public meeting held on 5th July 2016 as a true and accurate record. 2. PF 1756 MANAGING DIRECTORS REPORT The Executive Report PF 1756, containing a second quarter summary of administration performance against set targets and an update of activities since the Board meeting in July 2016, was provided to the meeting for noting. The Board noted the summary of the LPFA fund performance for the second quarter of It was highlighted that the administration performance target had been achieved. The Board noted that the complaints received in the first quarter of were in relation to the Spring Newsletter. The Managing Director assured the Board that this was an isolated error and the document had been amended before publication. It was noted that an internal process had been implemented to ensure such errors did not occur again. The Year in Review (Summary Annual Report) had been circulated to over 50,000 members with no comments received to date. The Managing Director highlighted that the London Borough of Havering had approved the initial stage of work to assist them with their administration. The Board noted that no material breaches had been reported to the Pensions Regulator and that the LPFA continued to implement appropriate controls and systems to ensure compliance with COP14. The Board noted the data protection and ISO incidents. [1] NOTED the content of the report. 3. PF 1757 INVESTMENT REPORTS Page 3 of 6

4 The Executive Report PF 1757, which included a financial analysis of LPFA s Solvency and Cash-flow as at 31 st August 2016 and Investment performance as at 31 st July 2016, was provided to the meeting for noting. The Board noted that the LPFA assets were in line with the Strategic Asset Allocation (SAA) portfolio and that Public Equities, Private Equity, Credit and Real Estate were the main contributors to the strong performance as at 30th June It was noted that the funding ratio level was above 90% and the trend continued to be positive. The LPP CIO confirmed that the LPFA did have an interest in green energy with an investment in a Scottish windfarm and that this investment had been entered into as a part of the joint venture with the Greater Manchester Pension Fund (GLIL). The LPP CIO emphasised that such investments would not be concentrated in any sector. The Board noted that the cash-flow remained within policy and that the risk rating remained stable from a GLA perspective. The Board [1] Noted the financial report. 4. PF 1758 LOCAL PENSION BOARD The Executive Report PF 1758, which included the minutes and action points of the Local Pension Board (LPB) meeting held on 12 th September 2016, was provided to the meeting for consideration. The LPB had an additional meeting on 12 th September 2016 to discuss various matters. The Managing Director gave an overview to the Board: The Board noted that Skip McMullan attended the LPB meetings in his capacity as an LPFA Board Member and LPP Shareholder Director. He had provided an overview of his past and current trustee roles, and some background information on the governance structure of LPP. The Group Company Secretary of the LPP had provided an update on how the LPP had developed in the last few months, including an overview on the SLA schedule. The LPB had discussed the forward agenda planner for 2017, including the process for LPB Member appraisals. The Board noted that a draft procedure note for the LPB to report breaches had been received and discussed future training requirements for the Board collectively. The Board noted that the Managing Director had given an overview of the first draft of the Annual Pension Fund Report 2015/16, and highlighted the progress against the actions in COP14 Internal Audit Report. The Board noted that in preparation for the 2016 Triennial Valuation, the LPB would be provided with a brief update on the process of employer categorisation and how the LPP categorised LPFA employers dependant on the risk posed. The Financial Monthly Reports had been presented to the LPB for noting; which had included solvency and cash-flow as at 31 st July 2016, investment performance as at 30 th June 2016 and the LPFA s administration performance for Quarter /17. [1] NOTED the decisions and actions set out in the minutes of the Local Pension Board meeting held on 12 th September Page 4 of 6

5 5. PF 1759 AUDIT AND RISK COMMITTEE The Executive Report PF 1759, which included the minutes and action points of the Audit and Risk Committee held on 19 th September 2016, was provided to the meeting for consideration. The Audit and Risk Committee (ARC) had a meeting on 27 th June 2016 to discuss several matters, such as the Annual Report for 2015/16. The Chair of the ARC provided an overview to the Board: The Committee had received a final draft of the Statement of Accounts for recommendation to the Board for their approval, which included the Letter of Representation, which was finalised as part of the completion of the audit. An update had been provided on the progress of the external audit. The draft Audit Findings Report for the 2015/16 accounts and a progress report had been provided by Grant Thornton. Grant Thornton also provided an unqualified audit opinion in respect of the financial statements and anticipated opinion on the pension fund annual report. The Committee had noted the progress on the internal audit recommendations and the progress report provided by KPMG. The Committee had also been informed of the planned internal audit work for the upcoming months which would focus on the following areas: Core Financial Systems, Benefits and contribution, Service Level Agreement, Risk Management, and Corporate Governance. The Committee had been asked to note that the LPP Board would be making changes to its internal audit and governance arrangements at its next meeting in October. The Committee had noted a summary of key risks associated with the partnership, including fraud related risks, progress made on the LDI hedging strategy, an analysis of the solvency of the LPFA Fund, an annual review of the LPFA s Residual liabilities, and approval of the Q1 Gifts, Hospitality and Expenses Register. [1] NOTED the decisions and actions set out in the minutes of the Audit and Risk Committee meeting held on 19 th September There being no other business the Chair declared the meeting closed at Pension Fund s Public Session minutes signed as a true and accurate record: Skip McMullan 13 December 2016 Meeting Chairman (SM) Page 5 of 6

6 Date of Action Lead Deadline Progress meeting LPFA ACCOUNTS GLC/ILEA LIABILITIES Begin to find a common ground on which to collaborate with all stakeholders with a view to submitting a joint proposal to DCLG or at least having a date by which the inherited GLC/ILEA liabilities needs to be agreed. LW MA new date , New date In progress Before his departure, Luke Webster (LW) met with representatives of London Borough representatives. Timeline agreed. LPFA will provide detailed analysis of assets and liabilities for each Borough. Page 6 of 6