Agenda and draft minutes

Pensions Board - Monday 1 August 2022 6.30 pm

Venue: Committee Room (B6) - Lambeth Town Hall, Brixton London, SW2 1RW

Contact: Chloe Morris, Democratic Services,  Email: cmorris2@lambeth.gov.uk

Note: Information on how to access the meeting is set out in the agenda. However, if you just want to watch the live broadcast you can copy and paste the following link into your browser: https://bit.ly/3zltO1W . The video will remain available to view for 180 days. 

Items
No. Item

1.

Declarations of Pecuniary Interest

    Under Standing Order 4.4, where any councillor has a Disclosable Pecuniary Interest (as defined in the Members’ Code of Conduct (para. 4)) in any matter to be considered at a meeting of the Council, a committee, sub-committee or joint committee, they must withdraw from the meeting room during the whole of the consideration of that matter and must not participate in any vote on that matter unless a dispensation has been obtained from the Monitoring Officer.

    Minutes:

    There were none.

2.

Minutes of the Previous Meeting pdf icon PDF 162 KB

    To approve and sign the minutes of the meeting held on 13 April 2022 as a correct record of the proceedings.

     

    Minutes:

    RESOLVED: The minutes of the meeting held on the 13 April 2022 were approved as a correct record of proceedings.

3.

Work Programme 2022-23 pdf icon PDF 119 KB

    Minutes:

    The work programme was noted.

4.

Pensions Administration Performance report for the period April 2022 to June 2022 pdf icon PDF 433 KB

    (All wards)

     

    Report Authorised by: Fiona McDermott, Strategic Director Finance & Investment

     

    Contact for enquiries: Linda D’Souza, Head of Payroll and Pensions, 07854 752186, ldsouza@lambeth.gov.uk

     

    Additional documents:

    Minutes:

    Linda D’Souza, Head of Payroll and Pensions introduced the report and noted to the Board that the report would be presented at every board meeting throughout the municipal year. As new members were on the Board, Linda D’Souza explained the purpose of the Board and stated that:

    ·         Members of the Board were encouraged to look at the pensions fund website, a link could be found at paragraph 2.7;

    ·         A training policy and plan had been developed and this would come to the Board during the forthcoming year;

    ·         An online training portal was being procured and Members would be contacted in due course to explain how to access the portal;

    ·         It was noted that when members undertook training, they should report this back to Sarah Hargraves, Treasury and Pensions, Governance and Compliance Officer to be logged;

    ·         A Pensions dashboard programme was underway to allow members of the public access to all their pension information electronically. Updates on the dashboard would be provided to the Board.

     

    In response to Members’ questions Robert Browning, Head of Treasury and Pensions explained that it was good to invest in several asset classes as this enabled diversification within the fund. Social housing was a key priority for London funds and Lambeth would look at their investment strategy and may consider bringing down the property allocation to address the current underweight property position.

     

    In addition, the overall Local Government Pensions Scheme (LGPS) and Lambeth’s exposure and impact due to the Ukraine and Russia war was minimal. However, this would create a wider social impact including inflation and supply chain issues. Therefore, focus generated on low carbon transition may be paused due to pressures of the war. Furthermore, the Decarbonisation pathway plan would be presented to the Board in October 2022, this would explain how Lambeth would reach net zero by 2040.

     

    RESOLVED that the Board:

    1.    Noted  the Pension Administration Service Performance update covering April 2022 to June 2022.

     

    2.    Agreed to report any comments or recommendations to the Pensions Committee of which there were none.

     

5.

Risk Register pdf icon PDF 175 KB

    (All wards)

     

    Report Authorised by: Fiona McDermott, Strategic Director Finance & Investment

     

    Contact for enquiries: Linda D’Souza, Head of Payroll and Pensions, 07854 752186, ldsouza@lambeth.gov.uk

     

     

    Additional documents:

    Minutes:

    Linda D’Souza Head of Payroll and Pensions and Robert Browning, Head of Treasury and Pensions introduced the report, it was noted that along with the performance report, the Risk Register would be presented at every Board meeting. It was also noted that the Risk Register followed the same format as Lambeth’s Corporate Risk Register which worked within a matrix. This assessed the impact and likelihood of risk. Two changes had occurred since the last meeting in April, which were outlined in paragraph 2.4 of the report.

     

    In response to a question raised by a Member, it was explained that as inflation increased, so would liability and Pension payments. Lambeth partially hedges against the impact of inflation on liabilities through the Liability Driven Investment (LDI) portfolio. Lambeth were looking to increase hedging over the coming months to further reduce pressures on liabilities, particularly relevant when setting contribution rates as part of the current triennial valuation.

     

    RESOLVED that the Board:

    1.    Noted and reviewed the Lambeth Pension Fund Risk Register and the additional actions proposed to mitigate risk.

     

    2.    Agreed to recommend any possible amendments or actions to the Pensions Committee of which there were none.

     

6.

Investment Performance - Q1 2021-22 pdf icon PDF 280 KB

    (All wards)

     

    Report Authorised by: Strategic Director for Finance and Investment: Fiona McDermott

     

    Contact for Enquiries: Robert Browning, Head of Treasury and Pensions, 07394 402801, rbrowning@lambeth.gov.uk

     

    Additional documents:

    Minutes:

    Robert Browning, Head of Treasury and Pensions, introduced the report, and it was noted that Mercer prepared the report. It was highlighted that the report reflected fund mangers’ performance to the end of March 2022. It was explained that, although the fund underperformed against the one-year benchmark, over a three- and five-year term the fund had been above or in line with benchmarks.

     

    The Head of Treasury and Pensions responded to Members’ questions, stating that funds Lambeth invested in had exclusion factors. Lambeth did not invest directly into companies who had a high fossil fuel exposure.

     

    It was also stated that, a 17 – 20-year period was a useful proxy for investment performance benchmarking. However, each asset strategy would have their own performance benchmarks. In addition, Lambeth had access to data from an external provider who benchmarks wider LGPS fund performance and therefore could benchmark Lambeth’s performance against other boroughs.

     

    Robert Browning agreed to circulate a revised figure for the fossil fuel exposure indication as the figure set out at paragraph 2.10 of the report was incorrect, the estimated figures was 0.97% which was more in line with that of the previous quarter.

     

    RESOLVED that the Board:

    1.    Agreed to note the report, together with the information in the accompanying performance report at Appendix One.

     

7.

Draft Annual Report 2021-22 pdf icon PDF 159 KB

    (All wards)

     

    Report Authorised by: Strategic Director for Finance and Investment: Fiona McDermott

     

    Contact for Enquiries: Robert Browning, Head of Treasury and Pensions, 07394 402801, rbrowning@lambeth.gov.uk

     

     

    Additional documents:

    Minutes:

    Robert Browning, Head of Treasury and Pensions, introduced the report and noted that the audit of the statement of accounts were underway. It was explained that when auditors completed this piece of work a, review would be carried out so that the information within the accounts would not conflict with other information elsewhere within the report. This would be published online on the pensions fund website. The deadline to do so would be 01 December 2022.

     

    RESOLVED that the Board:

    1. Agreed to note the draft Annual Report.

     

8.

Business Plan 2022-23 pdf icon PDF 156 KB

    (All wards)

     

    Report Authorised by: Strategic Director for Finance and Investment: Fiona McDermott

     

    Contact for Enquiries: Robert Browning, Head of Treasury and Pensions, 07394 402801, rbrowning@lambeth.gov.uk

     

     

    Additional documents:

    Minutes:

    Robert Browning, Head of Treasury and Pensions, introduced the report and explained that the report was not statutory but was in place for best practice. The report set out key priorities which would be delivered and implemented over the coming 12 months. It was also noted that Lambeth were to retender their investment management contract.

     

    In response to Members’ questions it was noted that:

    ·         The Pensions Committee and Board had training on 20 July 2022.

    ·         The self-directed learning portal contained key induction material.

    ·         An updated annual training plan would come to the board, this would have targeted and tailored training for Committee and Board members

    ·         A skills audit would be undertaken via a survey which will be circulated to members of the Committee and Board.

    ·         The Mercer contract was retendered in 2014, since then this had been a rolling contract as Lambeth had no issues with the services provided. However, a retender was good practice.

     

    RESOLVED:

    1.    That the Business Plan for 2022/23 be approved

9.

Manager Performance - Q1 2022

    (All wards)

     

    Report Authorised by: Strategic Director for Finance and Investment: Fiona McDermott

     

    Contact for Enquiries: Robert Browning, Head of Treasury and Pensions, 07394 402801, rbrowning@lambeth.gov.uk

     

     

Minutes:

RESOLVED: Unanimously that members of the Press and Public be excluded from the remainder of the meeting under Section 100A(4) of the Local Government Act 1972 on the grounds that: (i) it involved the likely disclosure of exempt information as defined in Paragraph 3 (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part 1 of Schedule 12A of the Act; and, (ii) that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

 

 

10.

Net Zero Update

    (All wards)

     

    Report Authorised by: Strategic Director for Finance and Investment: Fiona McDermott

     

    Contact for Enquiries: Robert Browning, Head of Treasury and Pensions, 07394 402801, rbrowning@lambeth.gov.uk

     

     

Minutes:

RESOLVED: Unanimously that members of the Press and Public be excluded from the remainder of the meeting under Section 100A(4) of the Local Government Act 1972 on the grounds that: (i) it involved the likely disclosure of exempt information as defined in Paragraph 3 (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part 1 of Schedule 12A of the Act; and, (ii) that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.