To receive any apologies for absence.

There were no apologies for absence.

To receive any declarations of interest.

Nikki Craig declared an interest as Head of HR for RBWM, as the administering authority.

To approve the minutes of the meeting held on November 20^th 2020.

RESOLVED UNANIMOUSLY: That the minutes of the meeting held on November 20^th 2020 be approved as an accurate record.

To note and review the contents of the Action Tracker.

Tony Pettitt stated he had attended the LGA pension seminar in January, and Nikki Craig stated she and Jeff Ford had both attended the Barnett Waddingham spring seminar. All of these had been recorded. Kevin Taylor told members it would be useful to supply copies of any certificates of training attendance they received, as this would help with the recording process.

To receive a verbal update.

Kevin Taylor informed members he had circulated a draft paper earlier in the day, that he would present at the next Committee meeting, regarding the issue relating to the £95,000 exit cap. He said the Treasury had issued the revocation regulations at the end of the previous week; prior to that, guidance to employers and scheme members relating to the disapplication of the exit cap had also been issued. The revocation meant the Berkshire Pension Fund would be able to continue to pay benefits to scheme members aged 55 and over who had  been made redundant or  retired for reasons of business efficiency, while expecting the employer to pay the full strain cost. Members were told the policy whereby scheme members could either reduce or defer pension payments, which had been approved by the Committee in December, was now void as a result of the Treasury implementing the revocation regulations.

Kevin Taylor said there had only been one scheme member where action had started to be taken, although it was possible there may be a few more affected. Philip Boyton told members that all cases relating to retirement had been immediately reviewed.

Members thanked Kevin Taylor for his work on the new paper and expressed frustration that a lot of work had gone into implementing changes only for them to be revoked. It was noted that the use of the word ‘unjustified’ used in the paper came from government and did not represent the view of the Board as it could be thought to be politically motivated.

To consider and note the contents of the report.

The Board was advised that the latest report covered the quarter period from 1 October to 31 December 2020 and was due to be presented to the next Pension Committee meeting.

Alan Cross asked if there was an issue with academies’ use of iConnect, noting there was a compliance rate of only around 70 per cent when there was a desire for this to be 100 per cent. Philip Boyton said many academies outsourced their payroll service, and there was a great variation in the providers that were used. Discussions were continuing with the academies and payroll providers to ensure compliance with meeting timescales was met. The Board was reminded of the benefits of using iConnect, chiefly that data quality was improved and information could be disseminated in a more timely manner.

Alan Cross queried the delayed submissions onto iConnect from Reading and RBWM shown on page 5 of the report and asked if this had been resolved. It was noted that late submissions were generally one or two days past the deadline and although it did not have an overall effect on the Pension Fund, it could impact on the quality of information available to the actuary. It was agreed that discussions should take place outside of the meeting to understand the root cause of the issue. Despite the delays, the Pension Fund was still meeting its key performance indicators as there was evidence to prove this.

Tony Pettitt said chart 5 needed to be amended to clarify if this related to the number of sessions that had been run, or the number of attendees and mode of delivery. Philip Boyton said two sessions had been run remotely, and these had been popular. There had been a pause in the ability to run sessions due to Covid. However, it was now possible for surgeries to be run remotely over a number of days, rather than having them restricted.

Jeff Ford asked if the report covered the topic of complaints within its remit. Kevin Taylor said the report used to contain a section on comments and complaints. Although the number of submitted comments and complaints was low, it was agreed that it should be reintroduced to the report, if only to state the number of complaints or comments that had been received. The Annual Report contained information on complaints, either submitted by scheme members or through the Internal Dispute Resolution Procedure (IDRP).

To consider the contents of the report.

Alan Cross introduced the item and explained the paper set out a proposed future model of operation for the Board, which would provide greater flexibility. It was suggested there could be six or eight members, although it was recognised if the size of the Board membership was increased to eight and there ended up being vacancies then this could create problems with meetings being quorate. One suggestion was to have substitute members, who would have the same level of training as full-time Board members.

Jeff Ford said he supported the proposals but expressed some concern that it could be a lengthy process to train some potential new members if they were not familiar with pensions on a day-to-day basis. He also said it may be difficult to recruit new members. Alan Cross said having substitute members would enable them to step up as a ready-made replacement when a Board member left, which would cause less concern about filling a vacancy on the Board itself.

Members agreed with the Chairman’s recommendation in the report and this would be taken forward (for information) to the Pension Fund Committee.

To consider and note the contents of the report.

Members were advised that the report had been considered and approved at the Audit and Governance Panel on 16 February 2021. It set out the main findings and general observations taken from the 2019/20 audit.

Members queried the overnight loan where £1.2million was borrowed by RBWM from the Pension Fund, as it appeared that it had not been properly disclosed. Kevin Taylor stated this was being investigated by the Head of Finance and was still currently under review. It was hoped that a formal response could be given at the next Pension Committee meeting. Kevin Taylor confirmed the transaction did not put the Pension Fund at any risk and the monies were repaid, with some interest, the following day. Tony Pettitt said the main issue appeared to be there was no control mechanism in place to authorise the transaction at a senior level. He asked if members could be updated on whatever recommendations were agreed to be put in place.

Regarding the concerns raised over the administration system editing rights, Kevin Taylor said finding a resolution was an ongoing situation. An audit meeting had been held earlier in the day. Kevin Taylor stated his belief that assigning a third ‘super user’ would create further risks to the Fund. Nikki Craig said a similar situation was in place with the RBWM payroll, and safety checks were carried out on an intermittent basis. Philip Boyton said all transactions on the system were fully auditable and were time and date stamped.

Alan Cross advised that the overall structure of the Pension Fund was being considered, and this would be included in the final report.

It was noted that the report stated there had been no internal audit undertaken during the period under review. Kevin Taylor said this was because in the year before the administration and payroll service had been audited and given the highest level of audit, so there was very low perceived risk prior to the external audit requesting an independent governance review. A review of the Pension Fund had been due but not proceeded with following the advice given.

For members to review and comment on various draft papers ahead of final versions being presented to the Pension Committee on March 22^nd 2021.

Members were told that the draft papers had been circulated offline, prior to them being formally published in the agenda papers for the Pension Committee meeting. Alan Cross commented that this was a new way of working and should it cause an issue for online observers of the meeting they should advise Kevin Taylor.

Pension Fund Governance Progress Report

Kevin Taylor told members that this would be a standing item outlining the progress being made on the governance review. Changes had been made to the Constitution to reflect the governance requirements of  the Pension Committee, Advisory Panel and Board. Ian Coleman highlighted the fact that revision of the Investment Strategy Statement did not need to be completed until spring 2022, although it was hoped this could be done before then and a paper brought forward in the nearer future. A possible revision of the Strategic Asset Allocation had been mooted and it was possible the LPPI would look at this and report to the Pension Committee. However, Ian Coleman added that if this was not required, it would be possible to move swiftly forward with the ISS review. A recommendation on the next course of action would be made at the next Committee meeting on 22 March 2021. Ian Coleman said the Committee would need to decide if they wanted a strategic review of the SAA, although this was dependent on the recommendations of LPPI.

Regarding the external audit report, Ian Coleman said he was not optimistic this would be ready in time for consideration at Committee as work needed to be done on a number of areas. However, he did not anticipate wholesale changes from the draft report.

Draft Responsible Investment Policy

Ian Coleman said all Pension Funds were expected to have an up to date responsible investment policy and the Berkshire policy had not been reviewed for some time. The draft policy had been put together following discussions with LPPI, who would deliver the policy on behalf of the Berkshire Fund. An extensive re-write of the climate change section of the report was anticipated as a consultation paper on climate change, and its effect on the Local Government Pension Scheme, was due to be published by the Ministry of Housing, Communities and Local Government later in the month.

Local Investment Report

Ian Coleman said a number of Funds had set aside funding for investment into local assets both generally and due to the problems associated with Covid. It was being viewed as a solution to helping grow local economies. The Board was told that the chairman of the Pension Committee had wanted a report on this topic to see if increased local investment was something elected Members wanted to pursue. Any execution of investment locally would involve LPPI. Ian Coleman said he had made a presentation on the subject to members of the Berkshire Unitary Treasurers, who had been supportive of the proposals. Alan Cross suggested the Local Enterprise Partnership (LEP) could be a useful source of information  ...  view the full minutes text for item 292.

To discuss and review the workplan.

Members were told that the Board’s workplan was to align itself with the workplan for the Pension Committee, and for the Board to review the Committee’s papers in advance. It was agreed this was a sensible resolution.

To discuss any other items of business.

Alan Cross said a scheme employer newsletter had recently been published, which included details of vacancies on the Board to be filled. This followed on from the earlier item on the governance review. It was hoped to involve someone from the education sector and a couple of academy employees had expressed an interest. Discussions would take place to see if an agreement could be reached. The governance review had also suggested a member from a Trade Union could join, although this option had not yet been explored. A Trade Union member would be expected to be a full member and undertake the required training.

Jeff Ford said the Barnett Waddingham session he had attended had identified an increase in the number of solicitors’ enquiries to pension funds regarding potential transfers of pensions and why a fund would allow a transfer to occur. He asked if such a thing had happened with the Berkshire Pension Fund. Philip Boyton said there had been some requests of this nature from claims companies acting with the authority of the former scheme member, using Freedom of Information or Subject Access Requests. He said there was a process that each Local Government Pension Fund had to go through to assure itself that any transfer a member was making away from the defined benefit scheme was done in their best interests. The Pension Fund has, in response to each request, been able to demonstrate that nothing untoward had happened regarding any transfer from the Berkshire Pension Fund. Philip Boyton explained that the actual number of transfers paid by the Pension Fund to either Personal or Overseas scheme administrators is small in comparison to the number of requests received in the first instance for scheme member information, that includes a request for an estimated Cash Equivalent Transfer Value (CETV) quotation.