Agenda and draft minutes

Pension Committee - Tuesday, 25th May, 2021 6.30 pm

Venue: Council Chamber, Town Hall, Katharine Street, Croydon CR0 1NX. View directions

Contact: Democratic Services  Email: Democratic.Services@croydon.gov.uk

Items
No. Item

13/21

Disclosure of Interests

In accordance with the Council’s Code of Conduct and the statutory provisions of the Localism Act, Members and co-opted Members of the Council are reminded that it is a requirement to register disclosable pecuniary interests (DPIs) and gifts and hospitality to the value of which exceeds £50 or multiple gifts and/or instances of hospitality with a cumulative value of £50 or more when received from a single donor within a rolling twelve month period. In addition, Members and co-opted Members are reminded that unless their disclosable pecuniary interest is registered on the register of interests or is the subject of a pending notification to the Monitoring Officer, they are required to disclose those disclosable pecuniary interests at the meeting. This should be done by completing the Disclosure of Interest form and handing it to the Democratic Services representative at the start of the meeting. The Chair will then invite Members to make their disclosure orally at the commencement of Agenda item 3. Completed disclosure forms will be provided to the Monitoring Officer for inclusion on the Register of Members’ Interests.

 

Minutes:

In respect of the “Reconsideration of Decision to Transfer Property from Croydon Affordable Homes and Croydon Affordable Tenures to the Pension Fund” item, the Chair declared that all Members had an interest and the delay of the transfer to the Pension Fund had been brought to the attention of The Pensions Regulator.

14/21

Urgent Business (if any)

To receive notice of any business not on the agenda which in the opinion of the Chair, by reason of special circumstances, be considered as a matter of urgency.

 

Minutes:

The Chair expressed empathy with officers in relation to the recent reductions in staff that had placed some difficulty in minutes being produced for meetings. However, he emphasised the importance of the need for minutes to be produced as a record of the meetings and the decisions made. He commented that some previous minutes had been very detailed, and in order to facilitate officers in producing minutes in a timely manner, emphasis should be placed on ensuring the decisions and any actions requested were recorded. In respect of this meeting, he requested that a more detailed minute of the “Reconsideration of Decision to Transfer Property from Croydon Affordable Homes and Croydon Affordable Tenures to the Pension Fund” item be recorded because of the importance of this matter. The Chair also asked whether it would be feasible for reserves from the Pension Fund be used to provide resources to help enable minutes to be produced.

 

Members also commented that there was a lack of detail in some reports and the Chair agreed to raise this matter with officers.

 

Democratic Services colleagues were invited to respond and advised the Committee that their team was currently still short staffed; however, more resources were expected to be forthcoming. Discussions on using reserves from the Pension Fund to facilitate this could take place if desired.

 

The Head of Treasury and Pensions stated that matters such as training records of Members were being collated and would be reported as part of the Annual Account report. He requested that Members provide him with any details of training that they had undertaken. He added that the Council, as the administration authority of the Pension Fund, had an obligation to ensure that administrative functions were sufficiently resourced.

 

15/21

Review of Breaches Log pdf icon PDF 229 KB

For the Committee to consider the current breaches log, attached as Appendix A. (Report attached)

Additional documents:

Minutes:

The Head of Treasury and Pensions presented the report and advised that there were no new breaches to report and no matters that would require The Pensions Regulator to be notified.

 

RESOLVED - That the Committee agreed to note the report.

 

16/21

Budget Review pdf icon PDF 274 KB

(Report to follow)

Minutes:

The Head of Treasury and Pensions presented the report which detailed the Pension Fund revenue budget for 2021/22 and the two subsequent years, together with the draft accounts for 2019/20 and the forecast accounts for 2020/21. He also drew Members’ attention to the four tables contained within the report.

 

RESOLVED –That the Committee agreed to note the report.

 

17/21

Pension Fund Medium Term Business Plan 2021/24 pdf icon PDF 130 KB

For the Committee to consider the draft Business Plan for the Fund for financial years 2021/22 to 2023/24 attached as Appendix A. (Report attached)

Additional documents:

Minutes:

The Head of Treasury and Pensions presented the report and advised that the McCloud case was one of most significant issues the Council faced. He also highlighted in the report work being undertaken to invest more in Environmental, Social and Governance (ESG) assets.

 

          The Chair commented that the Committee had previously agreed to move all equity investments to the London Collective Investment Vehicle’s (LCIV) sustainable equity fund and that resolution should be reviewed. He requested that this be looked at as a matter of urgency and be reported to the 14 September 2021 Committee meeting. He also requested that a meeting between the LCIV and Members be arranged prior to the Committee meeting. He welcomed moves for more carbon neutral assets.

 

          RESOLVED – That the Committee agreed to note the report.

 

18/21

Funding Strategy Statement (FSS) updates - Exit Credit and Employer Flexibilities Regulatory Amendments pdf icon PDF 144 KB

For the Committee to consider the changes introduced to the LGPS in respect of exit credits and the option for a contribution review.  The report also suggests how these changes could be reflected in the Funding Strategy Statement. (Report attached)

 

Additional documents:

Minutes:

The Head of Treasury and Pensions presented the report and advised that changes to the Funding Strategy Statement were proposed.

 

The Council’s actuary added that new regulations had come into force in the last year in respect of exit credit. Contribution rates regarding triennial valuations were to be reviewed.

 

RESOLVED:

 

1.     That the Committee agreed to note the draft changes to the Funding Strategy Statement.

 

2.     That the Committee agreed to instruct officers to undertake an employer consultation on these changes.

 

19/21

Governance Consulting Contract pdf icon PDF 211 KB

(Report to follow)

Minutes:

The Head of Treasury and Pensions presented the report that outlined the process by which the Governance Consultancy contract, awarded through the National Local Government Pension Scheme Framework, had been extended by one year

 

RESOLVED -That the Committee agreed to note the report.

 

20/21

Croydon Pensions Administration Team Key Performance Indicators (KPIs) pdf icon PDF 113 KB

For the Committee to consider the KPIs attached as Appendix 1. (Report attached)

Additional documents:

Minutes:

The Head of Human Resources and Finance Service Centre presented the report which set out the Key Performance Indicators for the administration of the Local Government Pension Scheme for the three-month period up to the end of March 2021. She added that heavy demands had been placed on the Pensions Administration Team because of the number of severance agreements needing to be arranged.

 

          RESOLVED - That the Committee agreed to note the Key Performance Indicators and the performance against these indicators as set out in Appendix A of the report.

 

21/21

Reconsideration of Decision to Transfer Property from Croydon Affordable Homes and Croydon Affordable Tenures to the Pension Fund pdf icon PDF 221 KB

For the Committee to consider the decision to in principle allow the future transfer of properties leased to Croydon Affordable Homes and Croydon Affordable Tenures.

Minutes:

The Chair began by referring to the recommendations in the report and that the discussions regarding section 3 in the report be minuted.

 

Officers then presented the report and advised Members that the situation had created an unusual set of circumstances. Both Members and the external auditor had raised concerns at the delay in the transfer taking place. It had since been considered as to whether the transfer would be in the best interests of the Pension Fund. As a result, it was now being recommended to rescind the decisions made in 2018 and 2019 to transfer funds from Croydon Affordable Homes and Croydon Affordable Tenures to the Pension Fund.

 

Members commented whether valuation of the properties had been undertaken for the Pension Fund and emphasised the importance of this being undertaken. Members sought the reasons that had led to the delay in the transfer.  The lack of property valuations would mean that the Pension Fund would be missing out on future increases in property prices. Confirmation was sought that no completions in respect of any properties had been made. Members commented that more information on the properties concerned would be useful. It was queried whether it would be more beneficial to invest in carbon neutral schemes as opposed to properties as such actions would provide a longer-term asset, notwithstanding the benefit to the Pension Fund of any uplift in value of the properties concerned. Members also asked whether the Council’s actuary had expressed any comments about this property investment. Some Members felt that the recommendations in the report to rescind the decisions made in 2018 and 2019 be agreed without delay. It was also queried as to whether a risk assessment had been undertaken in respect of the decisions and recommendations made.

 

In response to comments and questions from Members, officers confirmed that no transfers of properties had been completed. A risk assessment had been undertaken on the matter and consideration was being given as to the balance of asset allocations for the Pension Fund. The Committee heard that investing more in carbon neutral assets rather than properties may be more beneficial for the Pension Fund and there would be further consideration of this.

 

The Head of Treasury and Pensions advised Members that an updated valuation of the properties was awaited and this would be comprehensive. There were several complex technical issues that had contributed to the delay in the transfers. The Head of Treasury and Pensions stated that circumstances had changed significantly since the original decisions had been made in 2018 and 2019. Consideration needed to be given as to whether the properties in question would provide best value for the Pension Fund in future years. It was also important that actions taken were in accordance with the actuarial valuation.

 

The Council’s actuary was then invited to comment. The actuary representative recommended that any assets taken on should be evaluated regularly to ensure appropriate safeguarding being taken. The actuary had reservations about the property transfer. Whilst a  ...  view the full minutes text for item 21/21

22/21

Exclusion of the Press and Public

The following motion is to be moved and seconded where it is proposed to exclude the press and public from the remainder of a meeting:

 

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”

 

Minutes:

The following motion was moved by Councillor Andrew Pelling and seconded by Councillor Clive Fraser to exclude the press and public:

 

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.” The motion was put and it was agreed by the Committee to exclude the press and public for the remainder of the meeting. 

 

23/21

Progress Report for Quarter Ended 31 March 2021

For the Committee to consider the Part B report attached. (Appendices to follow)

Minutes:

RESOLVED that members of the Press and Public be excluded from the remainder of the meeting under Section 100A(4) of the Local Government Act 1972 on the grounds that:

(i)               it involved the likely disclosure of exempt information as defined in Paragraph 3 (Information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part 1 of Schedule 12A of the Act: and,

(ii)            that the public interest in maintaining the exemption outweighed the public interest in disclosing the information.