Pension Sub-committee And Pension Board - 05/03/2018

At a JOINT MEETING of the PENSION SUB-COMMITTEE of the POLICY AND RESOURCES COMMITTEE and the PENSION BOARD held at Dundee on 5th March, 2018.

Present:-

PENSION SUB-COMMITTEE

BAILIES

COUNCILLORS

PENSION BOARD

Bailie Willie SAWERS, Convener.

I DECLARATION OF INTEREST

There were no declarations of interest.

II MINUTE OF PREVIOUS MEETING

The minute of the meeting of 4th December, 2017 was submitted and approved.

III TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 79-2018 by the Executive Director of Corporate Services updating the Risk Register for the Tayside Pension Funds.

The Sub-Committee and Board approved the updated Quarterly Risk Register for the Tayside Pension Fund and Tayside Transport Pension Fund and noted the following changes to the risk profile from the previous report:-

- NEW RISK 18 EMPLOYER COVENANT RISK

Following exercises undertaken by the Government Actuaries Department in this area, this had been identified as a risk to funding levels of LGPS for employers who were without guarantee if circumstances occur whereby employers had to make an unplanned exit from the Fund. Following receipt of the Actuarial Valuation as at 31st March, 2017 and the receipt of respective employers cessation liabilities, an exercise would be undertaken to assess their strength of covenant, and appropriate measures would ensue.

- RISK NO 1 - FAILURE TO PROCESS PENSION PAYMENTS AND LUMP SUMS ON TIME

This risk had been heightened due to recent system downtime outages in respect of the Council's payroll system and also issues with completeness of information received from the system. Whilst the causes were still being investigated, this risk would be reduced once causes were identified, and controls put in place.

- RISK NO 4 - FAILURE TO KEEP SERVICE GOING DUE TO LOSS OF MAIN OFFICE, COMPUTER SYSTEM OR STAFF

This risk was heightened during the period since last report due to IT outages as a result of the recent power surge which resulted in no pensions system being available for three days and the subsequent impact this had on performance. Improvements had been made following this event, and there was now additional comfort in the stability of the new hosting platform and the further allocation of a specialist team to deal with pension fund issues. This risk had been subsequently reduced to the previous categorisation as a result of these measures, and also after receiving confirmation that the Altair system was now provided with tier 1 status in terms of disaster recovery alongside the Council's other key systems.

- RISK NO 13 - FAILURE TO HOLD PERSONAL DATA SECURELY

This risk had been heightened due to risk of incoming data protection legislation (GDPR) in May, 2018 which placed additional legal requirements on funds. Until the Fund were confident that all requirements of the new legislation were met, this risk would remain at new level due to the increased likelihood of failing to accommodate the new requirements.

IV PENSION ADMINISTRATION PERFORMANCE

There was submitted Report No 80-2018 by the Executive Director of Corporate Services providing information on the recent quarters operational performance in relation to Pension Administration.

The Sub-Committee and Board noted the content of the report.

V PENSION ADMINISTRATION STRATEGY UPDATE

There was submitted Report No 81-2018 by the Executive Director of Corporate Services providing an update as to how the Fund had been able to meet the strategic performance measures against which the Fund and participating employers were assessed with performance being reported to the Committee and Board.

The Sub-Committee and Board noted the content of the report.

VI ADMINISTERING AUTHORITY DISCRETION - REQUEST TO AMEND THE TRANSFER POLICY

There was submitted Report No 82-2018 by the Executive Director of Corporate Service reviewing the current policy of Tayside Pension Fund in respect of the policy which stated that only pension rights accrued with a scheme participating in the Public Sector Transfer Club could be transferred into the LGPS Fund. The report also commented on the policies of the other Scottish LGPS.

The Sub-Committee and Board approved that, in circumstances where scheme members had been subject to TUPE/Fair Deal and who subsequently were returned to their employer following that period, they be allowed to transfer in the pension rights accrued whilst in the pension arrangement provided during the period they were subject to TUPE/Fair Deal, and agreed that the policy be amended in order to be more compatible with modern working practices and in line with other Scottish LGPS Funds.

VII LGPS (SCOTLAND) PEER PERFORMANCE OVERVIEW

There was submitted Report No 83-2018 by the Executive Director of Corporate Services providing information on peer analysis of Tayside Pension Fund over the 12 month period to 31st March, 2017.

The Sub-Committee and Board noted the content of the report.

VIII TAYSIDE PENSION FUND ANNUAL AUDIT PLAN 2017/18

There was submitted Report No 84-2018 by the Executive Director of Corporate Services providing a summary of the responsibilities and approach in respect of Tayside Pension Fund for 2017/2018.

The Sub-Committee and Board noted the information contained in the report.

IX TREASURY POLICY

There was submitted Report No 85-2018 by the Executive Director of Corporate Services revising the Council's Treasury Policy Statement which was intended to govern all treasury activities carried out by the Pension Fund.

The Sub-Committee and Board approved the policies and procedures laid out in the attached 'Treasury Policy Statement 2018/2019', noting that the Treasury Policy Statement must be maintained reviewed annually.

X TREASURY MANAGEMENT STRATEGY

There was submitted Report No 86-2018 by the Executive Director of Corporate Services reviewing the Treasury Management Strategy for Tayside Pension Fund.

The Sub-Committee and Board approved the Treasury Management Strategy for Tayside Pension Fund.

XI FUNDING STRATEGY STATEMENT

There was submitted Report No 87-2018 by the Executive Director of Corporate Services reviewing the Funding Strategy Statements for the Tayside Pension Fund.

The Sub-Committee and Board approved the Funding Strategy Statement for Tayside Pension Fund.

XII TAYSIDE PENSION FUNDS BUSINESS PLAN 2018/2019

There was submitted Report No 88-2018 by the Executive Director of Corporate Services introducing the annual business plan for the Tayside Pension Funds.

The Sub-Committee and Board noted the information within the report and approved the 2018/2019 Business Plan which applied to the administration and management of the Tayside Pension Funds.

XIII PROFESSIONAL SERVICES PROCUREMENT

A verbal update on upcoming procurement exercises, for Investment Consultancy Actuarial Services and the Employer Covenant Review, was given to the Sub-Committee and Board.

XIV TAYSIDE PENSION FUNDS ACTUARIAL VALUATION AT 31ST MARCH, 2017

There was submitted Report No 91-2018 by the Executive Director of Corporate Services updating the Committee on the Actuarial Valuation of Tayside Pension Fund at 31st March, 2017.

The Sub-Committee and Board noted the information contained within the report.

The Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the press and public be excluded from the meeting for the undernoted items of business on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.

XV TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 89-2018 by the Executive Director of Corporate Services relating to Performance Summaries for the quarter 1, 3 and 5 year time periods to 30th December, 2017 reviewing the investment performance of the Main Fund's seven Fund Managers for the quarter 31st December, 2017. It also considered the performance of the Transport Fund which invested with four of these Managers. The report compared investment performance of the Fund with the specific benchmarks which consist of various stock and security market indices.

The Sub-Committee and Board noted the information contained therein with regard to the performance of the Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 90-2018 by the Executive Director of Corporate Services, summarising investments and transactions during the period 1st October to 31st December, 2017 reviewing the investment activities of the Main Fund's seven Fund Managers for the quarter to 31st December, 2017 summarising the transactions of each Fund Manager and showing the market values of the Main Fund.

The Sub-Committee and Board noted the information contained therein with regard to the activities of the Tayside Pension Fund and its Fund Managers.

XVI ANNUAL REVIEW OF INVESTMENT PERFORMANCE

There was submitted Report No 92-2018 by the Executive Director of Corporate Services considering reports by the Tayside Pension Fund's Investment Consultant.

The Sub-Committee and Board noted the report by the Investment Consultant and, in particular, the recommendations on individual investment managers.

XVII PRESENTATION

Due to adverse weather conditions, it was not possible for a presentation to be given from Alliance Bernstein.

However, it was noted that the Fund was continuing to perform above the benchmark.

Willie SAWERS, Chair.