Venue: Committee Room 6, Guildhall, Swansea. View directions
Contact: Democratic Services: - 636923
No. | Item |
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To Elect a Chair for the 2019-2020 Municipal Year. Minutes: Resolved that Ian
Guy (Neath Port Talbot County Borough Council) be elected
Chair for the 2019-2020 Municipal Year. (Ian Guy presided) |
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To Elect a Vice-Chair for the 2019-2020 Municipal Year. Minutes: Resolved that Councillor Mike White (City & County of Swansea) be elected Vice-Chair for the 2019-2020 Municipal Year. |
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Disclosures of Personal and Prejudicial Interests. Minutes: In accordance with the Code of Conduct adopted by the City and County of Swansea, the following interests were declared: - I Guy – Agenda as a whole – Member of Local Government Pension Scheme – personal. Councillor A Lockyer – Agenda as a whole – Member of Local Government Pension Scheme – personal. My wife and son are also Members of the Local Government Pension Scheme – personal. D White – Agenda as a whole - Member of Local Government
Pension Scheme – personal. Councillor T M White – Agenda as a whole – Member of Local Government Pension Scheme and my daughter is a Member of Local Government Pension Scheme – personal. Officers: K Cobb - Agenda as a whole – Member of Local Government
Pension Scheme – personal. J Dong – Agenda as a whole – Member of Local Government Pension Scheme – personal. C Isaac – Agenda as a whole – Member of Local Government Pension Scheme – personal. J Parkhouse – Agenda as a whole – Member of Local Government Pension Scheme and Minute No.6 – Draft Statement of Accounts 2018/19 – Clerk of Llanrhidian Higher Community Council – personal. |
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To approve & sign the Minutes of the previous meeting(s) as a correct record. Minutes: Resolved that the Minutes of the Local Pension Board meeting held on 28 March 2019 be signed and approved as a correct record. Noted - information regarding death grant nominations had been
included in the Neath Port Talbot Council staff newsletter. |
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Low Carbon Index Tracking Fund - Update. PDF 42 KB Additional documents: Minutes: The Interim Section 151 Officer presented a ‘for information’
report which updated the Committee on the low carbon
transition component of the Environmental, Social, Governance (ESG) Policy. It was added that the Committee had
taken a number of steps to understand the impact of ESG issues on the Fund and
these were outlined in the report. It was outlined that as part of the
Fund’s work, the Committee commissioned MSCI to
undertake an analysis of the portfolio’s carbon exposure. MSCI had
information on each global stocks’ carbon related exposure and was able to
compare the carbon exposure of the Fund’s holdings with a range of reference
benchmarks. The results of the study indicated that the current portfolio was 9%
underweight carbon assets. The Committee
agreed to target a 50% underweight position by 2022 in its revised ESG Policy
and the most operationally efficient way to start to reach its target was via a
low carbon passive index. The Pension
Fund Committee previously approved the transition of its approximately £0.5bn
Blackrock market cap weighted index tracking equity assets into the Blackrock
Low Carbon Index tracking fund, which would go a considerable way in meeting
its commitment to reduce the fund’s carbon footprint by 50% by 2022. Transition of those assets commenced on the 3
July 2019 and would be completely transitioned by the
end of the month. In addition, at the
Swansea Council meeting held on 27 June 2019, a notice of motion declaring a
climate emergency was approved. Within the notice of
motion the ground breaking work and commitment of the
Pension Fund Committee to reduce its carbon footprint was referenced. Appendix 1 of the report provided the
Environmental, Social, Governance Policy which had
been formulated as a result of the initial training, further information
gathering, receiving presentations from interest groups and subsequent
Committee discussion and decision-making. The Committee commented upon the positive progress made and
the ambition to reduce 50% of the Fund’s carbon footprint by 2022, whilst still
ensuring appropriate investment returns for the Fund’s members. The Board commented upon the following: - ·
The positive progress made and the ambition to
reduce 50% of the Fund’s carbon footprint by 2022, whilst still ensuring
appropriate returns for the Fund’s members; ·
Engaging with and lobbying companies to alter
their policies; ·
Challenging countries who do not recognise
climate change; ·
The content of the Notice of Motion passed by
Swansea Council |
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Wales Pension Partnership (WPP) Draft Responsible Investment Policy. PDF 98 KB Additional documents: Minutes: The Interim Deputy Section 151 Officer presented a ‘for
information’ report which requested that the approval of the Responsible
Investment Policy (RI) of the Wales Pension Partnership (WPP) by the Pension
Fund Committee, be noted. It was recognised as
best practice that WPP had a clearly defined RI Policy which could be
implemented across its funds. It had
been noted that each member fund of WPP were at different stages of their
consideration of the whole ESG/RI agenda.
The WPP Policy was therefore formulated with a view to not tying an
individual fund to a restrictive or binding commitment. Appendix 1 contained the RI Policy of the
WPP. It was added that
the Chair of the Pension Fund Committee was actively persuading other funds in
Wales to adopt the policy. It was also noted
that the Pension Fund had been nominated for the Local Government Pension
Scheme Best Approach to Sustainable Investing Award. |
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2019 Audit Plan – City and County of Swansea Pension Fund. PDF 298 KB Minutes: The Interim Deputy Section 151 Officer presented the Wales
Audit Office (WAO) 2019 Audit Plan which provided the
proposed audit work, when it would be undertaken, how much it would cost and
who would undertake it. Appendix 1 sets out the responsibilities of the Auditor, along with those of management and those charged with governance. Exhibit 1 provided the three phases of the audit approach, Exhibit 2 outlined the risks considered significant which required special audit consideration. The proposed audit fee for this work was set out in Exhibit 3 and the timetable of the proposed audits was provided at Exhibit 5. The Board discussed private equity valuations, which
highlighted that in the future estimates rather than actual valuations would be
relied upon. Resolved that the
contents of the report be noted. |
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Draft Statement of Accounts 2018/19. PDF 33 KB Additional documents: Minutes: The Interim Deputy Section 151 Officer presented a ‘for
information’ report which requested that the Draft
Statement of Accounts for the City & County of Swansea Pension Fund
2018/19, be noted. It was added that the Wales Audit Office (WAO) had commenced
their audit of the Pension Fund Draft Statement of Accounts 2018/19 in line
with their audit plan presented to Pension Fund Committee earlier in the
year. Their report would
be presented to the Board in September 2019. The Draft Statement of Accounts
2018/19 were provided at Appendix 1. The Board discussed the following: - ·
The positive return. ·
Cost reduction programme ·
Low cost of governance |
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Admission Body Application - The Wallich. PDF 50 KB Minutes: The Interim Deputy Section 151 Officer presented a ‘for
information’ report which noted the approval of the
admission body application for The Wallich. It was outlined that following a service review exercise by
Neath Port Talbot County Borough Council (NPT CBC) undertaken previously, Tai
Tarian (previously called Neath Port
Talbot Homes) were appointed to manage housing services on behalf of NPTCBC. An element of that service supported those
affected by homelessness had subsequently been re-tendered and The Wallich had
been appointed for a 3 year term. The Wallich, a genuine not for profit organisation with HMRC approved exempt charity status, had been providing accommodation and support
services for homeless people since 1978. The contract for services commenced on the 1st July
2017 to run for 3 years. Under the contract conditions, the current
eligible workforce be transferred under TUPE
arrangements from the current employer, Tai Tarian to The Wallich. In order to preserve the pension rights of
the transferred staff, it was proposed that The
Wallich be granted Admitted Body status to the City & County of Swansea
Pension Fund. It was
proposed that the admission agreement be granted on a closed scheme
basis, to include only the named staff in schedule 1 of the admission
agreement. The admission agreement requires the requisite indemnity
bond or sponsoring employer guarantee be secured from
the sponsoring employer, Neath Port Talbot County Borough Council. The Administering Authority shall also
undertake the appropriate risk assessment of the admitted body, The Wallich. The Board discussed the delay in the process due to pensions
not forming part of contract negotiations and the importance of protecting
staff going forward. |
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Minutes: The Interim Deputy Section 151 Officer presented a ‘for
information’ report which presented any breaches which
had occurred in the period in accordance with the Reporting Breaches Policy. Appendix A provided the details of breaches that occurred
since the previous Pension Fund Committee in March 201, including a new
requirement in respect of frozen refunds The details of the breaches and the
actions taken by the Management were highlighted. The Board discussed the details of the Breaches listed, particularly the cost of chasing individuals, how elements of each breach were out of the hands of the Fund and actions taken to alleviate problems. |
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MHCLG Consultations on Exit Payment Cap and Valuation Cycle Employer Risk. PDF 55 KB Additional documents:
Minutes: The Interim Deputy Section 151 Officer presented a report which sought retrospective approval of the response
to H M Treasury (HMT) and The Ministry of Housing Communities and Local
Government (MHCLG) Consultation on the Cap on Exit Payments and Valuation Cycle
and Reform. It was outlined
that the Government proposed to cap exit payments in the public sector to an
absolute limit of £95k and sought consultation on the regulations to
implement. The draft statutory
instrument and consultation response was provided at
Appendix 1. The Government’s
definition of an exit payment included any additional pension contributions
required to enable the unreduced early access to a member’s benefits when they
were subject to early retirement when made redundant at aged 55 or over. To clarify, the exit payment would include
redundancy (member received cash payment) and any additional pension
contributions (the pension fund receives the payment). The arbitrary limit of
£95k would encompass very modestly paid public sector workers who have long service
and a number of variables along the way as highlighted within the proposed
response. The remainder of
the response identified technical issues relating to how the 2
components of the exit payment cap needed to be assessed and dealt with, plus
some of the weaknesses of the proposal. the response
was approved by the Chair of the Pension Fund Committee on the 2 July 2019. In addition, the
MHCLG issued consultation on proposals to vary the current 3 year valuation
cycle, proposals regarding exit payments and protecting rights of membership of
employees of certain employers. The
fund’s appointed actuary had provided the response to the consultation
which was provided at Appendix 2. The Board discussed the following: - ·
The unfair situation where a few small cases
could potentially affect many; ·
The Pension Fund potentially losing membership
as a result; · Valuation cycles. |
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Exclusion of the Public. PDF 112 KB Minutes: The Board was requested to exclude the
public from the meeting during consideration of the item(s) of business
identified in the recommendation(s) to the report on the grounds that it / they
involved the likely disclosure of exempt information as set out in the
exclusion paragraph of Schedule 12A of the Local Government Act 1972, as
amended by the Local Government (Access to Information) (Variation) (Wales) Order
2007 relevant to the item(s) of business set out in the report. The Board considered the Public Interest Test in deciding
whether to exclude the public from the meeting for the items of business where
the Public Interest Test was relevant as set out in the report. Resolved that the
public be excluded for the following items of
business. (Closed Session) |
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WPP - Update. Minutes: The Interim Deputy Section 151 Officer presented a ‘for
information’ report which updated the Committee on the
progress of the Wales Pension Partnership (WPP) asset pooling. Appendix 1 provided
the progress and update report provided by the ACS Operator Link Asset
Services. Referenced within
the update was the projected approval of the tranche 3 fixed
income fund by the FCA in Q4 2019. The Chair
highlighted the need for WPP to continue to improve communications with Local
Pension Boards’ through their Chairs. |
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Residential Housing as an Asset Class. Minutes: The Interim Deputy Section 151 Officer presented a report which informed the Local Pension Board of the
decision of the Pension Fund Committee to approve Residential Housing as an
investment asset class. It was outlined that the Pension Fund currently invested in a
wide range of asset classes, including equities, bonds, property,
infrastructure, private equity, hedge funds and private debt. However, It did not
have an allocation to residential housing. It was
added that the Pension Fund Committee received a day’s training on the asset
class in February 2019, which included presentations from managers specialising
in the market rented sector, social housing, affordable housing and
homelessness support housing as investable asset classes. Appendix
1 provided a summary of the attributes and benefits of adopting residential
housing as an asset class. The Pension
Fund Committee approved the report at its meeting held on 11 July 2019. The Board
highlighted the positive decision and the opportunity to benefit the local
economy. |
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Report of the Investment Consultant. Minutes: The Interim Deputy Section 151 Officer provided a ‘for information’
report, which presented the asset valuation and investment performance for the
quarter, year and 3 years ended 30 June 2019. Attached at Appendix 1 were the quarterly investment summaries for the Pension Fund for the quarter, year and 3 years ended 30 June 2019. |