To review and discuss the Pension Committee papers from October 19^th 2020 as follows:

a. Independent Review Committee Paper

b. Independent Governance Report

c. Pension Fund Governance Restructure Committee Paper

d. Constitution Amendments (tracked)

Kevin Taylor introduced the item and explained that one of the outcomes of the 2019 external audit was to request a full governance review. The report included in the agenda was the outcome of this review, which gave a list of recommendations of how governance of the Pension Fund could be improved. Among these were changes to the RBWM Constitution, which included changing the Panel to a Pension Fund Committee; this would continue to have five elected RBWM Members on it. The Investment Working Group had been disbanded, principally because its role had diminished following the transfer of assets to the LPPI. It was noted that the recommendations in the report related to the investment side of operations, and the administration of the Fund had not been a cause for any concern and there were no recommended changes.

Board members stated they were not aware of the extent of the problems that the report had identified. Although some issues had been discussed at previous meetings, some members said that the final report had come as a surprise to them. Ian Coleman said the issues raised in the report were primarily a matter for the Committee to resolve. Jeff Ford said he was concerned that the LPPI were not managing assets, as he had been led to believe; however he stated he was pleased at the recommendations and actions taken so far. Ian Coleman said the intention was for a permanent Head of Pension Fund to be responsible for the overall management of the Pension Fund. The Fund is contracted to remain invested in some of the assets on a long-term basis, in some cases for up to 20 years. LPPI would to transfer these assets as potential opportunities arose. Ian Coleman that relatively high management costs would be incurred for some of these smaller funds.

Arthur Parker noted there had been a delay in the audit figures for 2019/20 and asked if this was due to any resourcing issues with the auditors. Ian Coleman explained this was due mainly to the impact of Covid19. Ordinarily there would be little difference in investment valuation between the end of December and the following March, but the impact of Covid19 had meant significant changes in those values and thereby impacted on the audit process. Covid19 had also affected the auditor’s ability to carry out the work, leading to extended timescales.

The report raised the issue of lack of minutes of Investment Working Group meetings. Kevin Taylor said RBWM would not commit to having a member of Democratic Services take minutes and it was left to staff to take them. Following the TUPE transfer to LPPI, there was nobody left with the knowledge or ability to take minutes for the Investment Working Group. It was noted, contrary to the impression given in the consultant’s report, that no papers from the Investment Working Group had ever subsequently been taken to the Board.

Kevin Taylor stated that it had been suggested the Pension Board was a more suitable forum for staff and some smaller scheme employers to be represented than the Advisory Panel, although not all places had recently been taken up.

It was noted that a review of the strategy asset management allocation was required, and that this would come to the Board first, followed by the Committee.

The Board noted there was an expectation any issues to be reported to the Pensions Regulator would be made by the Section 151 Officer, or the Monitoring Officer if the Section 151 Officer was not available or implicated.