Agenda item

The Treasury and Investment Manager presented an update report relating to the work of the Board that arose since the last meeting on the following matters:

(1)           Draft Annual Report and Accounts 2022/23

The Board considered the updates, and noted the following:

·            That the Council’s external auditors, Grant Thornton, were finalising their work on the 2022/23 Accounts.

·            That the draft annual Pension Fund report for the period was subjected to audit adjustments and would be presented at the next meeting of the Pension Investment Committee (PIC) prior to presentation to the Board for consideration and subsequent resubmission to the external auditors for their consistency opinion. 

In response to a question, Officers clarified to the Board as follows:

·            That the delay in signing the Pension Fund report was because the Technical Review Team and the Audit Team made a couple of queries about valuation and sought additional statements, and that there was nothing substantive to suggest that materiality had impacted on the accounts. 

(2)           Draft Administrative Strategy (AS) and Data Improvement Plan (DIP)

The Board considered updates relating to the draft AS and DIP, and noted the following:

·            That both documents were reviewed by officers and revised to reflect comments made at the last Board meeting, and that the next steps would involve meetings with data suppliers, training for staff in the use of new tools, and the development of a project plan with formulated deadlines.

·            That the Administrative Team and the Investment Team had respective roles in the development of the AS and the DIP, and how the duties were working together were outlined in the report. 

·            That the Council was satisfied that the AS was within the expected thresholds in relation to current processes, both in terms of materiality and time-in value.

The meeting noted requests from Officers for more ideas and suggestions to inform future updates, and the Board’s view was that to further understand current processes:

·               Officers should produce a project plan and data development pointers with indicators of priorities, dependencies, and expertise. 

·               The plan should include potential risks, targets and timescales using the pensions industry’s benchmark and the Pensions Regulator’s levels for consideration as an agenda item at the next meeting of the Board.

·               There should be clarification in regarding timescales and long-term targets of the measures of data quality, and explanations about how achievements would be monitored.

·               That additional information about what ongoing measures would be, such as targets for the number of missing addresses, rather than simply having the baseline right would be welcomed. 

·               That revisions to draft or ‘live’ documentation should always be circulated with control pointers to highlight comparisons between earlier versions.

·                That while it was understood that some elements of data quality were more important than others, officers should identify the prioritising elements in terms of expected achievements.

·                That some data fields could be developed to identify satisfaction levels, probably by traffic lighting the different data development to aid understanding about priorities, dependencies, and expertise, with an explanation about the rationale for prioritising the various elements.

Action:

To circulate the next updated

AS and DIP drafts to the Board for comment

when submitting to PIC.

(3)           Policy for Reporting Late Payment of Contributions

The Board considered and noted the updates in the report.

Action:

To report back to the next meeting,

outlining efforts and actions applied

to identify repeated offenders of late

payments; to include measures

 and formalised escalation routes,

with tracked changes.

(4)           Climate Transition and Net Zero Policy

The Board noted the following:

·            That the policy developed by PIC was divided into four areas and would operate as a ‘live’ document. 

·            That the baseline and alignment were considered in the development of the policy to assess the Investment Strategy against the carbon budget pathway and other metrics.

·            That the recommendations for more effective climate-related disclosures would aid further informed decisions to enhance stakeholders’ understanding about the concentrations of carbon-related assets and exposures to climate-related risks.

In response to questions raised, the Board was advised as follows:

·            That the policy, subject to amendments, would enable PIC to balance the ensuing climate considerations within the expected responsibility of the fund as part of the quarterly evaluation process with individual fund manager’s performance.

·            That the external auditors used the Storebrand baseline exercise at the start of the 2023 evaluation period.

·            That officers also applied the Storebrand approach to the 2019 common baseline of the low carbon and energy mandates that drove much of the activities through 2021/22.  Thus, the draft action plan detailed how officers achieved the ambition and intent of the policy alignment with the annual baseline and reporting period. 

·            That because of the different classes of carbon reduction, not all the data were available at the time of reporting as much of the contents were related to net zero climate ambition.  It was stated that given that the policy would be considered on a regular basis within its scope, it would be updated as data becomes available across funds.

(5)           Risk Register

In considering the update report, the Board:

·                Noted the varying movements in the category of risk.  It was understood that two of the risks had not improved, but three had, and that a total of nine reached their target score. 

·               Commented on the thought process, and highlighted its observation that there were no additional requirements or faults recorded in the report to highlight the reasons for the latest changes.

Action:

To ascertain whether there should

 be additional controls and

outline reasons for tolerating the risks

when reviewing existing controls.

(6)           Pension Board Representation

The meeting noted Mark Booker’s appointment as the new employer representative, and the Chair, Stephen Warren, gave a warm welcome on behalf of members of the Pension Board.

RESOLVED that the report be noted.