To receive updates from Kevin Taylor on:

a.    TPR Governance and administration risk in public service pension schemes; and engagement report

b.    Fair Deal Consultation

Kevin Taylor informed the Board that The Pensions Regulator had issued a report called Governance and Administration Risks in Public Service Pension Schemes: An Engagement Report. Ten local authority funds had been put forward to engage with the TPR. The Berkshire Pension Fund was not one of the ten put forward.

A number of key risk areas had been reviewed including record-keeping, administration, internal controls and dispute procedures.  A number of recommendations resulted from the review and the Board considered the findings.

Kevin Taylor reported to the Board that in general the Berkshire Pension Fund was in a good position but would consider ways in which to improve the service further in light of some of the recommendations made in the report.

One issue that had been recognised was that the Chairman of the Panel and the Chairman of the Board could increase their interaction.  Kevin Taylor explained that this had been discussed at a recent training day and that he would confirm with the Chairman  that Members of the Pension Panel had previously agreed that the Chairman of the Board could attend Panel meetings.

ACTION: Kevin Taylor to send evidence of Panel approval to the Chairman.

Kevin Taylor informed the Board that a pension administration strategy was already in place and reviewed regularly by the Berkshire Pension Fund Panels.

The Chairman noted from the risk register that the loss of key staff had been identified as a key risk.  Nikki Craig informed the Board that this risk had been recognised by the RBWM MD across other areas of the Borough staffing and that appropriate succession planning was being considered.

Kevin Taylor informed the Board that at the last meeting of the Pension Panel it had been agreed that an exceptions report would be provided at each meeting with the full risk policy and assessment register being taken once a year to Panel for review. 

The Chairman raised a question concerning access to the Pension Fund’s website and whether or not the number of hits was recorded.   Kevin Taylor explained that this was reported in the administration report each quarter and that he would seek to find out if it was possible to identify whether individuals were accessing the website on multiple occasions.

ACTION: Kevin Taylor to find out if it is possible to identify if individuals access the website on multiple occasions (i.e. both “hits” and “unique hits”).

The Board discussed carrying out a survey for the Fund’s members. Nikki Craig suggested having five simple questions on Survey Monkey aimed at scheme Members across each scheme type. The sample would not have to be very large. Members could be targeted by having to answer the survey questions as they were trying to log in. Kevin Taylor explained that the Fund has been considering how best to survey its members and that this was ongoing.

The Pension Panel had identified that cyber security was not included in the risk register. Kevin Taylor did inform the Panel and the Board that there were many firewalls in place but that he will take action to evidence the pension systems are secure and include this risk in the register.

The Board were interested to know what proportion of members were not resident in the UK and what the effects of leaving the EU would be. Kevin Taylor informed the Board that the Fund undertook a monthly mortality screening exercise, took part in the National Fraud Initiative and had signed up to Tell Us Once.

ACTION: Kevin Taylor to provide further details to Board members regarding pensioners living overseas and actions taken to ensure payments made are legitimate.

The Board discussed the matter of ‘separation’.  Kevin Taylor explained that at a national level the idea of separating Pension Funds from their administering authorities was being considered thereby providing Funds with a level of autonomy.  One particular area of concern had been the potential conflict of interest placed upon s151 officers responsible for both the finances of the Authority and the Pension Fund.

ACTION: Kevin Taylor to send Members details relating to the separation concept.

The Chairman commented that the TPR report was good and that there were many points to reflect on. Kevin Taylor reassured the Board that all internal controls were in place which were all robust and all third party contracts were reviewed regularly. The two points that had been highlighted from this report were that there needed to be better communication between the Panel and the Board and the importance of carrying out the survey to scheme Members.

Jeff Ford asked what was the link between the Pension Board and the Pension Fund Panel. The Board were informed that the Borough acts as the administering authority to the Pension Fund but that the Fund’s assets were kept entirely separately from those of the Borough. Members were told that the Pension Fund had its own bank account. The staff working for the Pension Fund are employed by the Royal Borough and therefore use certain services provided by the Borough such as ICT and HR.  However, the pension administration and pension payroll software was a separate bespoke system hosted off-site by a third party provider, Heywoods.

The Chairman pointed out that two of the four pages were missing from the website version of the fair deal letter.

ACTION: Democratic Services to ensure the correct versions are available on the website.

The Board then discussed Fair Deal.  Kevin Taylor informed the Board that Fair Deal covered most other public sector pension schemes but not the LGPS. It was explained that under current rules when a scheme employer outsources a service the chosen third party service provider has to either provide for the transferring employees a broadly comparable pension scheme to the LGPS or ongoing access to the LGPS via an admission agreement. The Fair Deal consultation put forward the idea of the outsourcing employer being treated as a deemed employer  meaning that the outsourcing employer would retain all pension liabilities with the party service provider simply ensuring contributions are deducted from the employees and paid over to the Fund. No admission agreement  would be needed. The outcome of the consultation had yet to be published with any procedural changes requiring amendments to the scheme regulations.

ACTION: Place on next agenda

RESOLVED UNANIMOUSLY: The Board noted the update