Agenda and minutes

There were no declarations of interest on this occasion.

The Director for Corporate Services reminded the Committee that spaces were still available for the Local Government Association’s Fundamentals Training for Pensions Committee and Local Pensions Board Members. Members of the Committee were asked to inform the Director for Corporate Services if they were interested in attending the meeting so spaces could be booked as soon as possible.

RESOLVED – That the minutes of the meeting of the Pensions Committee held on 25 March 2022 be confirmed and signed by the Chairman.

RESOLVED – That the minutes of the meeting of the Pensions Panel held on 8 June 2022 be received.

Oral report of the Director for Corporate Services.

RESOLVED – That the following Members be appointed to serve on the Pensions Panel for the 2022/23 municipal year:

• Philip Atkins
• Mike Davies
• Colin Greatorex
• Mike Sutherland
• Stephen Sweeney

Report of the Director for Corporate Services.

The Committee considered the final outturn position for the financial year 2021/22 together with a summary of the key achievements against the Business Plan, provided at Appendix 2 to the report.

Members attention was drawn to the continued high levels of service being provided throughout 2021/22 to scheme members and employers. Specific achievements during 2021/22 included:

(i)  Pensions Administration Team

·      Tendering for an Administration System provider, to incorporate an external hosting platform service, and testing and implementing the new system;

·      Completing the long running Guaranteed Minimum Pensions (GMP) exercise with HMRC;

·      Finalising the development of an Employer Covenant Monitoring Process and implementing regular funding reviews;

·      Development of a series of regular / shorter virtual Employer Practitioner Workshop(s);

·      Undertaking a Training Needs Analysis and producing a Training Plan for Pensions Committee and Local Pensions Board Members in 2022/23; and

·      the Team have taken the Pensions Pledge and implemented the regulatory changes required in relation to Transfers.

(ii)Pensions Investment Team

·      Developing a Pension Fund Climate Strategy and Climate Stewardship Plan;

·      Developing investment reporting in line with the Task Force for Financial Disclosure (TCFD) requirements; and

·      Reviewing the ongoing appropriateness of the Fund’s Investment Strategy and Strategic Asset Allocation, ahead of the 2022 Actuarial Valuation & in line with the Pension Fund’s new Climate Strategy.

The Committee heard that there had been two Staffordshire Internal Audit Service reviews across the Teams throughout the year. The Pensions Administration Audit maintained its ‘substantial’ assurance rating for the fourth year in a row; and the Pension Fund Investment Audit, focussing on Investment Performance Reporting, which tied in with similar themed Audits at LGPS Central, also received a ‘substantial’ assurance rating.

The Committee were presented with the Pensions Administration Team’s Service Standards for 2021/22 and were informed that the Team had achieved a 90% performance target in 14 of the 15 published standards.  As well as providing assurance that the necessary controls were in place, this re-affirmed the hard work and effort of the Teams, and their ongoing commitment to the Fund, despite the increasing complexities of delivering the service whilst working remotely.

Members were informed that there had been difficulty in recruiting experienced team members and focus continued to be on training and ‘growing our own’. The increase in turnover had created a situation where the Fund would be recruiting to maintain current resource, as opposed to increasing it. To maintain Service Standards going forward there would be a need for recruitment to continue at pace. The Team had also committed to explore other recruitment options, such as Apprenticeships. Members were reassured that focus would remain on delivering a service to the end user that was not sub-standard or in direct contravention of the Pensions Regulators Disclosure requirements.

Members heard that in 2021/22, the Fund’s investment return was +12.2% versus its strategic benchmark return of +11.9%, an outperformance of +0.3%. The Fund’s longer-term annualised performance numbers, at 31 March 2022, remained in excess of 8%, well ahead of the long-term investment return assumptions used by  ...  view the full minutes text for item 40.

Report of the Director for Corporate Services

The Committee considered a report of the Director for Corporate Services on the Fund’s Risk Register.

The Committee was informed that Risk management was good practice and central to the management of the Pension Fund, asreflected by the coverage of risk in several key documents, such as the Funding Strategy Statement and the Investment Strategy Statement.

The Committee was also informed that officers reviewed the risk register every quarter, focusing in on the detail of one of four key areas, (Governance, Funding, Administration and Investment), along with a review of any emerging risks. As part of the review, Members of the Local Pensions Board attend the review meetings and take an active role in the discussions. They had also begun to discuss the specific area under review each quarter at formal board meetings in an effort to widen the general understanding of each area. The Board’s comments on the Risk Register and the review process were attached at Appendix 2 to the report.

It was also suggested that the Committee may wish to consider asking members of the Local Pensions Board to continue with their role in the ongoing review process.

The Committee were presented with a summary of the high-level risks associated with the objectives, attached at Appendix 3 of the report. This summarised the highest score of the detailed risks associated with each of the high-level risks and provided a summary of the controls and sources of assurance currently in place. This was intended to give the Committee an overview of the main risks the Pension Fund needed to consider and the controls in place to mitigate them.

The Committee were reminded that as part of the annual review, it was agreed that the Pensions Committee would review emerging risks to the Fund. It was important to recognise that some of the greatest risks faced by the Pension Fund arose from change. Several transitional areas were reflected in Appendix 4 to the report, which provided more detail on the emerging risks perceived to be faced by the Pension Fund.

The Committee was informed that the Pension Regulator’s Code of Practice recommended that a Pension Fund has a Risk Management Policy in place and that this was reviewed periodically. The risk management policy covered key areas such as:

• The Fund’s attitudes to, and appetite for risk;
• Aims;
• Risk measurement and management; and
• Responsibility.

The updated Risk Management Policy for the Staffordshire Pension Fund was attached at Appendix 5 to the report and was submitted for approval.

RESOLVED – a) That the summary of the high-level risks and emerging risks from the current Staffordshire Pension Fund Risk Register, as presented in Appendices 3 and 4 respectively, be noted.

b) That the content and recommendations of the Local Pensions Board review of the Staffordshire Pension Fund Risk Register, attached at Appendix 2, and the continued involvement of the Pensions Board in the ongoing review, be noted.

c) That the Risk Management Policy of the Staffordshire Pension Fund, attached at Appendix  ...  view the full minutes text for item 41.

RESOLVED – That the public be excluded from the meeting for the following items of business which involve the likely disclosure of exempt information as defined in the paragraphs of Part 1 of Schedule 12A of the Local Government Act 1972 indicated below.        

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Report of the Director for Corporate Services

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Presentation by LGPS Central Limited

(Quarterly Financial Shareholders Report at 31 March 2022 attached for information)

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