Hounslow Council


Agenda and minutes

Venue: Committee Room 2, Civic Centre, Lampton Road, Hounslow. View directions

Contact: Carol Stiles Tel: 020 8583 2066 Email:  carol.stiles@hounslow.gov.uk 

Items
No. Item

1.

Appointment of Chair and Vice Chair

The Appointment Panel appointed Councillor Sam Hearn as Chair and Neil Mason as Vice Chair for the period up to May 2018.

Minutes:

The appointment of Chair and Vice Chair had been agreed as part of the recruitment process and the appointments were confirmed as Councillor Sam Hearn, Employer Representative as Chair and Neil Mason, Member Representative as Vice Chair.

 

The Chair, in opening the meeting, called for each member to introduce themselves and their experience with pensions. He explained that the Chair of the Pension Fund Panel, Councillor Mukesh Malhotra, would attend the meeting around 4 p.m.

 

The Chair set the scene for the inaugural meeting of the Board. It was proposed to have two meetings per year. There was a standard agenda. The Lead officer was Lorelei Watson, Head of Treasury, Pensions and Capital and Deputy S151 officer.

 

The Chair recognised that there were grey areas for the Board in starting out and fulfilling its governance role. They needed to strike a balance in their approach, avoiding being too aggressive whilst not being too tentative in their ability to challenge. The Board needed to develop their relationship with the Pension Fund Panel. He noted that the Hounslow Pension Fund was a successful scheme but the Panel needed to make strategic decisions about the management of the Fund and the Board would need to understand why the Panel was moving in the way they had determined.  

 

 

2.

Apologies for Absence

Minutes:

All members were present.

 

3.

Declarations of Interest

Minutes:

The Chair called for declarations of interest. Mr Cassell declared an indirect interest in that as a Trustee of the Heston and Isleworth Old People’s Welfare charity the Trust was seeking to buy property from the borough at the lowest price. Mr Cassell had no commercial involvement. It was noted that this had no bearing on the pension scheme.

4.

Hounslow Pension Board Terms of Reference pdf icon PDF 116 KB

Additional documents:

Minutes:

See the report by the Head of Treasury, Pensions and Capital – Agenda Item 4.

 

Lorelei Watson, Head of Treasury, Pensions and Capital, introduced the report and drew members’ attention to the Terms of Reference of the Pension Fund Panel. These showed the Panel to be a decision making body, responsible for investments, performance, voting rights and the Fund’s administration. In contrast the Terms of Reference of the Pension Board showed its role was to assist the administering authority in securing compliance. The Board did not replace the role of the Panel and was not decision making. It was a compliance body. The Board was accountable to the Cabinet and its minutes would go to the Cabinet. The Board had been set up for the life of the administration so until May 2018.

 

In response to questions, it was explained that the Terms of Reference for the Board had been developed from the shadow Board proposals but that there would be the opportunity to look at other Boards and their Terms of Reference over time. It was recognised that Neil Mason’s experience and expertise would be useful in this respect.

 

There needed to be at least three members present for the Board to be quorate. In response to a question, it was confirmed that any decision to ask the Pension Fund Panel to do something or to make a recommendation to the Cabinet could not be done with fewer than three members.

 

Mr Cassell, seeking to be clear about the Board’s role, suggested that if the Pension Fund Panel had not considered an important fact, the Board could ask them to consider it, with the implication that the Panel would give an assessment and say how they had taken this information into account. It was confirmed that this was correct.

 

Mr Mason asked whether it was clear how the Pension Fund Panel exchanged information with the Pension Board and vice versa. The Chair advised that the minutes of the Pension Board would be sent to the Pension Fund Panel 15 days before if the Board was requesting action.

 

One of the requirements for the Board was to ensure it acted effectively and efficiently so the Chair proposed that on one of the meeting agendas each year there should be an item for the Board to review its own performance.

 

The Board explored whether two meetings per year would be sufficient, as this was the minimum requirement, and the protocol for calling further meetings. The potential need for further meetings was especially true at the outset as there would not, for example, be much monitoring at this meeting which focused on training. It was recognised for the formal Board meetings there was a resourcing issue for officers in additional meetings and also the requirement to meet the Access to Information requirements for a public meeting.

 

However, the Board discussed the option of holding informal meetings in order to plan the strategy to take to the formal meeting  ...  view the full minutes text for item 4.

5.

Hounslow Pension Board Code of Conduct and Conflicts of Interest pdf icon PDF 59 KB

Additional documents:

Minutes:

See the report by the Head of Treasury, Pensions and Capital – Agenda Item 5.

 

Lorelei Watson, Head of Treasury, Pensions and Capital, introduced the report which requested the Board to adopt the Code of Conduct and procedure for informing the Chair of declarations of interest. The report provided information about the Code of Conduct as in the Council’s Constitution and its application to the Pension Board. Ms Watson drew members’ attention to the Nolan principles for public bodies and the information in Appendix 2 of the report which gave guidance on declaring interests and the distinction between pecuniary and non pecuniary interests. Examples of pecuniary interests to be declared would be employment by a stakeholder of the Pension Fund such as Northern Trust or securities such as a private equity investment or hospitality in excess of £25.

 

It was confirmed that declarations of interest should be made at the beginning of the Municipal Year and at each meeting.

 

Resolved:

 

That members noted the requirement for them to adopt the Hounslow Code of Conduct and to declare any conflicts of interest to the Chair.

6.

Mandatory Training Requirements pdf icon PDF 83 KB

Additional documents:

Minutes:

See the report by the Head of Treasury, Pensions and Capital – Agenda Item 6.

 

The Chair, in introducing the report, stressed the training which would be undertaken by the members of the Pension Fund Panel and the need for Pension Board members to demonstrate to the Pension Fund Panel that they were equally up to date with appropriate training.

 

Lorelei Watson, Head of Treasury, Pensions and Capital, explained the statutory requirement for Pension Board members. The National Shadow Board recommended an e-learning programme with 9 core modules and 7 public sector modules, so 16 modules in total. Paragraph 4.6.6 of the report gave the website address for members to work through the training. There was an award for completion. Neil Mason had already completed the programme. The Board needed to set themselves a deadline to complete the training.

 

The Chair asked Neil Mason for his experience of the training toolkit. Mr Mason explained that extra modules had been added. He advised that there were 11 essential modules related to the public sector in the toolkit and these spoke directly to this role. The modules related to the 2014 legislation and he agreed they should be used. Surrey County Council had set a year for Board members to complete the training. The modules were relevant to investment and related to aspects of the work of the Pension Fund Panel but were relevant to the public sector. In response to a question, he also confirmed that there was not repetition across the modules. Each module took at least 20 minutes. It was helpful to have done the reading in advance and helpful to have a paper copy of the Code of Conduct from the Pension Regulator to hand.

 

William Cassell explained that he did not have access to the internet and did not have an email address; both of which he would need to complete the modules. It was agreed that, once in post, a newly appointed Business Support officer should be able to offer support to Mr Cassell to set up IT access so he could undertake the training.

 

The Chair proposed that members of the Board should agree to complete the training within a year and to report back on progress at the next meeting. This was agreed.

 

Lorelei Watson asked members for their availability to attend the three day Local Government Association (LGA) training course. All members confirmed that they were available on the London training dates. The Chair had attended the training previously as a member of the Pension Fund Panel but felt that he should undertake the training again given the time lapse and changes in the scheme. Lorelei Watson agreed that she would register all members for the training and send them the details. She explained that the three training days did not have to be done in any particular order so if there were difficulties with these dates one day could be done next year.

 

The Chair noted that there was a  ...  view the full minutes text for item 6.

7.

Training

Presentation to be provided on the day by Lorelei Watson, Head of Treasury, Pensions and Capital and Deputy S151 Officer, and by Hitesh Sharma, Strategic Pensions Manager.

Minutes:

A pack of training slides was provided for the members of the Board in addition to the policies and statements referred to as part of the training. Lorelei Watson, Head of Treasury, Pensions and Capital, and Hitesh Sharma, Strategic Pensions Manager, took members through the training pack.

 

This explained the categories of membership of the scheme – contributing members, deferred members and pensioners. There had been an increase in membership in all categories. Information was also provided on the employing bodies. The London Borough of Hounslow represented 95% but there were more academies and outsourced bodies included so the administration of the scheme had become more complex.

 

Mr Cassell felt that it was confusing when trying to identify the respective roles of the London Borough of Hounslow and Capita. It was explained that Capita was responsible for the benefits administration and that queries such as pension payments and tax deductions should be directed in the first instance to Capita. It was further explained that Capita were developing their website with a model that would allow information on different scenarios and that their newsletter was another source of information.

 

The Board was informed of the key facts relating to the market value of the Pension Fund, the nature of the investments and the terms of reference of the Pension Fund Panel. There was full compliance in respect of governance compliance requirements. There were five elected members on the Panel who undertook mandatory training. There were also co-opted members representing Employers, Staff and Pensioners. The vacant Employer Representative post had recently been filled by Jackie Willis, an Academy school governor and bursar at Beavers Primary School.

 

The Board noted that they had now approved the Terms of Reference for the Board and it was agreed that these could be included in the Governance Compliance Statement appendix once the latest guidance was issued.

 

Hitesh Sharma, Strategic Pensions Manager, explained in more detail the role of Capita in the administration of the Fund. They had been the providers of this service since 2009 under a ten year contract. The service was based in Surbiton and officers from the borough met with Capita regularly. The Service Level Agreement had 40 key performance indicators to be met. Payments were made through the Council’s payroll and lump sums would be paid in house by the payments team. The success rate for the Service Level Agreement was relatively high but there had been a dip in performance last year. There were reasons for this including the new pension scheme with new features, automation not being ready and an office move which resulted in the loss of experienced staff. There had been a backlog over the summer and autumn of 2014 but the Council had worked in partnership with Capita and performance was back on track.

 

In response to questions, Mr Sharma explained that the benchmark target was 100% but it was important to consider that the number of cases handled had doubled because of the increase  ...  view the full minutes text for item 7.

8.

Future meetings - two meetings per annum - timing to be discussed

Minutes:

The Board agreed that it would be appropriate to meet again after Board members had completed their training. As all four members of the Board would be attending the same training days there was the opportunity to meet informally around those training days if needed.

 

It was proposed that the next meeting should be scheduled for January 2016. It was also agreed that it would be helpful for the clerk to circulate contact details amongst the members of the Board.

 

Councillor Malhotra suggested it would be helpful for the Pension Fund Panel to understand the Board’s role too and suggested the option of running a training session for the two panels together so that each understood their respective roles. Councillor Malhotra also stressed the need to ensure members kept abreast of developments and took advantage of training opportunities. He explained that he, Councillor Purewal and Councillor Todd as members of the Pension Fund Panel regularly attended sessions run by the Fund Managers. He noted that Councillor Lambert, who had been newly appointed to the Pension Fund Panel, also had financial experience from involvement with the credit union. He suggested that the two committees might work closely together in respect of training.

 

The Chair saw sense in this but also stressed the need for the Board to keep its distance from the Panel. It was recognised that members of the Pension Fund Panel had the right to attend the Board meetings as observers and similarly that members of the Board could observe the Panel meetings as well as having access to the respective committee papers. The Chair suggested that it would be helpful if prior to a meeting of the Board, the Chair of the Pension Fund Panel could clarify if it would be helpful for him to update the Board directly on any topic.

 

The Board considered, with two meetings per year, that January and July would be appropriate timings. Monday was the preferred day of the week and Mr Cassell asked ideally to avoid the third Monday in each month. It had been agreed that the Board should meet in working hours.

 

Members sought to clarify that the role of the Board was to ensure that the Pension Fund Panel had followed its statutory obligations and due process in line with the Statement of Investment Principles. It was not to discuss investment decisions. However, Mr Cassell was of the view that the Board must also reassure itself that the Panel had balanced risk against returns in line with its risk profile.

 

The Chair clarified that the Board would want to understand any change in strategy by the Panel and the advice on which any change was based. The Board’s role was to ensure a decision was made following the correct process and to understand how the decision was reached, even if it were a decision that Board members might not have made themselves.

 

Councillor Malhotra felt it would be useful to explain how the Panel worked. He explained that  ...  view the full minutes text for item 8.

9.

Urgent Business

Any business which the Chair agrees to accept on grounds of urgency.

Minutes:

There was no urgent business.

10.

Policies and Statements pdf icon PDF 154 KB

  • Statement of Investment Principles
  • Funding Strategy Statement
  • Governance Compliance Statement
  • Pension Administration Strategy
  • Pensions Discretions Policy
  • Communications Statement

Additional documents:

Minutes:

Members had been provided with a pack of relevant policies and statements in the agenda pack. These were:

 

  • The Statement of Investment Principles
  • Funding Strategy Statement
  • Governance Compliance Statement
  • Pension Administration Strategy
  • Pensions Discretions Policy
  • Communications Statement.