Agenda item

The Head of Corporate Resources introduced the report.

Following a question from the Scheme Representative about the reasonableness of the fees, Board Members were informed that the fees paid by the Council across the funds were competitive. It was noted that one of the managers had reduced their fees and another was in discussion with officers to reduce its fees.

Board Members asked about the benefits of diversifying the pension investments. Officers advised Board Members that they rely on the advice of the Council’s Advisers, and currently they were happy with the performance of the Scheme.

Board Members were concerned about the pressures on the fund given the fewer number of staff employed and the impact of improvements in longevity. The Head of Corporate Resources said that the fund was maturing and there had been a net cash out flow for the last 3 years. He informed Board Members that there had been an enrolment drive and the 50/50 option had been highlighted to staff. This was to attract those who might not be able to afford the full contribution.

Board Members wanted to know the ratio of staff leaving and joining the Council, and were told this information was not at hand. Board Members also wanted to know about funding strategy to meet the Fund’s liability, and were told this would be provided for the next meeting. Members were informed that the next actuarial evaluation was in 2019.

Board Members commented that their role as the Pension Board would include looking at the reasonableness of the Scheme’s investment strategy, including the advice received from the Scheme’s Investment Advisors. They also noted that the actuarial view that improvements in longevity seemed to have tailed off. Officers said they received actuarial advice, including an  annual Scheme funding update.

Board Members asked how the fund could be sustained if receipts was less than outgoings, and were told that the Council was faced with sustainability risk. Board Members asked whether the pension scheme was usually mentioned during induction of new staff and were told this was done. Members commented that the recruitment strategy ought to be robust and emphasised the importance of communication to members. The Pensions Manager said processes were being put in place for regular communications.

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Board Members asked whether officers were in a position to know of major funding changes and take action if need be, and were told that there was an annual update on movements of contributors and this would be reported to the Pension Board. Officers were also asked why they had not made any investment as yet as part of the pooling group. They responded that they were currently observing the market but that the funds currently offered by the London Collective Investment Vehicle (LCIV) do not align with the Funds current strategy, although the Fund remains committed to the LCIV. Board members asked whether performance of a pooling member could affect the others and were told that this was not the case.

It was agreed that officers would provide information on the following before the next meeting of the Board:

·         Fund strategy

·         Effective member communication

·         Investment strategy

·         Approach and transition to pooling