Agenda item

Pooling Update

Verbal update and for discussion

Minutes:

Rob Stubbs, Deputy Director and Head of Finance, informed the Board that the business case had been signed in January 2018 by the Panel after they had received briefing in December 2017. The LPP Shareholders meeting was attended by the Head of Finance, Rob Stubbs, the Managing Director, Alison Alexander, the Leader, Councillor Simon Dudley, the Chairman of the Berkshire Pension Board and the Vice Chairman of the Berkshire Pension Panel... LPP had been given the authority to have dialogue with the actuary if required. A Management Agreement is being prepared which covers the legal arrangements for the management of assets.

 

A report will be presented to the Berkshire Pension Board Panel on 21 May 2018 and then assets would begin being transferred as of 1 June 2018 with a two year deadline..

 

To begin with the investments team would become a part of LPP and would move to London. The administration team would still be based here in Maidenhead. The plan was to embed the investments and investment team first and then look again at the structure and consider whether transferring the administration team would be an option .

 

LPP would manage 100% of the fund’s assets, Pooling assets, legacy assets and consent assets,  from 1 June 2018. This would be reviewed annually. RBWM would still be the responsible authority for the Berkshire Pension Fund. RBWM would still be relying on fund managers of which JP Morgan was the custodian, this would continue for now. LPP would be managing our fund managers. The Vice Chairman asked about equity and was informed by Rob Stubbs that there were eight buckets but there are none in emerging markets which was currently being looked at. It was estimated that around sixty percent would be easy to pool, of the rest of them, some would still be relatively straight forward to pool at an appropriate date and others may need to remain on the Fund’s balance sheet for some time. RBWM were working very closely with Lancashire County Council.

 

The day to day administration of collecting payments from employees and paying out to pensioners would still be carried out through administration at RBWM. The intention was that over a period of time that the fund would see a reduction in fees paid.

 

There would be very little change to the governance structure. A report will be presented in May 2018 highlighting that there would be no change to the Pension Board, the Advisory Panel and the Pension Panel. An investment working group would be set up with the Panel Chairman, Head of Finance, two independent advisors, the chairman of Pension Berkshire Panel and LPP at least on a quarterly basis. This would not be a decision making body, similar to what is in place currently.

 

We were pooling with LPP clients. Discussions around becoming a shareholder are ongoing and expect to be concluded within 18 months.

 

Each authority would retain their Pension Board. The Chairman had recently attended a LGA Cross Pool Forum. The forum which was particularly looking at governance structures and it was stated that local accountability would need to stay with each authority. There was no single model that fitted all as there were many models being used. However, this authority was mirroring at least one other authority. This was working well at Lancashire and at LPFA and we had very good relationships with Lancashire.

 

ACTION: Explore the appetite to meet with fellow board members, a process by which compares best practice.