Greenwich Council

Agenda and minutes.

Venue: Committee Room 4 - Town Hall, Wellington Street, Woolwich SE18 6PW. View directions

Contact: Jasmine Kassim  Email: jasmine.kassim@royalgreenwich.gov.uk tel 020 8921 5146

Items
No. Item

1.

Apologies for Absence

To receive apologies for absence from Members of the Panel.

Minutes:

There were no apologies for absence.

2.

Urgent Business

The Chair to announce any items of urgent business circulated separately from the main agenda.

Minutes:

There was no urgent business.

3.

Declarations of Interest pdf icon PDF 50 KB

Members to declare any personal and financial interests in items on the agenda.  Attention is drawn to the Council’s Constitution; the Council’s Code of Conduct and associated advice.

Additional documents:

Minutes:

Resolved –

 

That the list of Councillors’ memberships as Council appointed representatives on outside bodies, joint committees and school governing bodies be noted.

4.

Minutes pdf icon PDF 83 KB

Members are requested to confirm as an accurate record the Minutes of the Pension Fund Investment and Administration Panel meeting held on 10 December 2019.

 

No motion or discussion may take place upon the Minutes except as to their accuracy, and any question on this point will be determined by a majority of the Members of the body attending who were present when the matter in question was decided.  Once confirmed, with or without amendment, the person presiding will sign the Minutes.

Minutes:

Resolved -

 

That the Minutes of the meeting of the Pension Fund Investment & Administration Panel held on 10 December 2018, be agreed and signed as a true and accurate record.

5.

Audit Plan 2018/19 pdf icon PDF 47 KB

The Panel to note the Pension Fund Audit Plan for 2018/19 accounts (Appendix A).

Additional documents:

Minutes:

Members received a report introduced by Emily McKeown, a representative from external auditors Grant Thornton LLP.  The representative highlighted plans to undertake the audit of the Royal Borough of Greenwich’s (Royal Borough) 2018/19 financial statement.

 

In response to questions raised, the representative advised Members that it was best practice to identify “rebuttable presumed risks” at the outset in the audit planning process, as those identified as “significant risks” could not be rebutted.  It was confirmed that the assessment of risks in the Audit Plan was in accordance with the nature of revenue streams of the Royal Borough’s Pension Fund. 

 

Continuing with her response, the representative informed Members that the external auditors competed in the open market, and won the contract to provide audit services to the Royal Borough.  Thus, the external auditors were not in a position to provide reasons why the current audit fees charged to the Royal Borough for their services were lower than last year’s, other than to confirm that the calculations were in accordance with the Public Sector Audit Appointments standards (PSAA).

 

Members were further advised by the representative that the proposed timeline to undertake the audit for the Royal Borough was sufficient.  Therefore it was unlikely that the external auditors would exercise their “reserved” right to charge fees for additional work.  However, should the situation becomes necessary, the calculations would be consistent with the PSAA standards.

 

Members endorsed proposals to progress with the audit of the Royal Borough’s 2018/19 financial statement, and welcomed information that the external auditors would continue to identify and communicate significant omissions or misstatements for corrective management actions.

 

The Panel

 

Resolved –

 

That the report in relation to the Pension Fund Audit Plan for 2018/19 accounts, be noted.

6.

Draft Business Plan 2019/20 pdf icon PDF 58 KB

The Panel to note the draft Business Plan for 2019/20 (Appendix A).

Additional documents:

Minutes:

Members considered the report in relation to the draft Pension Fund Investment and Administration Panel’s Business Plan for 2019/20.  It was concluded that the final document would be submitted at a subsequent meeting of the Panel, with a requirement for Members to consider and approve the Plan prior to implementation.

 

The Panel

 

Resolved –

 

That the Pension Fund Investment and Administration Panel’s draft Business Plan for 2019/20, attached to the report as Appendix A, be noted.

7.

Pension Fund Risk Register pdf icon PDF 76 KB

The Panel to note the risk register (Appendix A), as a tool for managing risk within the Pension Fund.

Additional documents:

Minutes:

Members received a report relating to the Royal Borough of Greenwich’s Pension Fund Risk Register, introduced by the Accountancy and Business Change Manager. 

 

In response to an enquiry, Members received confirmation from the Officer that the formulae used to assess the chances of a risk happening was relevant in determining the potential impact in each of the listed category, so that the appropriate management action could be taken in the event of deviation from plan.  Members were also advised that there were no areas requiring immediate management attention for corrective measures at the present time.

The Panel

 

Resolved

 

That it be agreed to endorse the Royal Borough of Greenwich’s Pension Fund Risk Register as a tool for managing risks within the Pension Fund.

8.

Knowledge and Understanding Policy and Framework pdf icon PDF 83 KB

The Panel to consider and agree the Fund’s Knowledge and Understanding Policy and Framework (Appendix A).

Additional documents:

Minutes:

In introducing the report, the Accountancy and Business Change Manager advised Members that the Royal Borough of Greenwich (Royal Borough) recognised the importance of ensuring that staff and Members charged with the financial administration and decision-making with regard to the pension fund were fully equipped with the knowledge and skills to discharge the duties and responsibilities allocated to them.  Thus, the Royal Borough’s Pension Fund was complying with the Chartered Institute of Public Finance Accountancy’s Code of Practice on Public Sector Pensions – Finance Knowledge and Skills requirements, and the Local Government Pension Scheme’s Advisory Board guidance.

 

The Panel

 

Resolved –

 

That the Royal Borough of Greenwich’s Pension Fund’s Knowledge and Understanding Policy and Framework, be agreed.

9.

Pension Fund Communication Policy Statement pdf icon PDF 68 KB

The Panel to consider and agree the Communications Policy Statement (Appendix A) for the Royal Borough of Greenwich Pension Fund (“the Fund”).

Additional documents:

Minutes:

The Head of Pension Service introduced the report to the Panel, highlighting a change to the Royal Borough of Greenwich’s (Royal Borough) Pension Fund Communication Policy Statement.

 

Members noted that the change was introduced by an amendment to the Local Government Pension Scheme (LGPS) 2013 regulations.  The change had been incorporated in the Royal Borough’s Pension Fund Communication Policy Statement to allow deferred scheme members who ceased membership before 1 April 2014 to elect for payment of reduced pension benefits from age 55, rather than age 60.

 

In response to questions raised, the Head of Pension Service advised the Panel that only current members to the Pension Fund had access to the iTrent Human Resources system currently operated by the Royal Borough of Greenwich payroll team.  However, all employing bodies and scheme members could access a range of literature, documents and policies via the Royal Borough’s website.  In addition to that, the Royal Borough was operating a generic email address and phone number to manage and respond to enquiries, and was continually innovating to increase access for members of the pension scheme.  Thus, the pension scheme’s website link and members’ self-service facilities would be publicised more widely, with a proposal for members to increase their use of email communication.

 

Continuing with her response, the Head of Pension Service confirmed to the Panel that training had been offered to a junior employee, up to achieving the diploma level certificate in pension administration work.  It was confirmed that communication to members of the pension scheme had not been hindered by recruitment exercise currently underway for a more senior officer to help manage the volume or work.

 

The Panel

 

Resolved –

 

That the revised Royal Borough of Greenwich’s Communication Pension Statement, be agreed.

10.

Update of ESG and Responsible Investment Policy within the Investment Strategy Statement pdf icon PDF 76 KB

The Panel to consider and agree the updated Responsible Investment policy statement for the Fund, which forms part of the Investment Strategy Statement.

Additional documents:

Minutes:

Paul Potter, a representative from Hymans Robertson LLP, introduced the report to the Panel, highlighting update in relation to the Royal Borough of Greenwich’s (Royal Borough) Responsible Investment policy statement.

 

In response to questions raised, the representative stated that it was the responsibility of the Panel, in acting as a responsible and active investor, to consider the financial impact on risk and returns in relation to environmental, social and governance factors (ESG), including climate change.  Thus, the Panel should require that its investment managers integrate all material financial factors, including ESG considerations into their decision-making process for all investments.

 

Members were further advised that in order for the Panel to understand the nature of risks within the Pension Fund (“the Fund), it should extend its fiduciary duties to engaging with managers and advisors, with a view to identify investment opportunities.  Thus, the Panel should review investment managers’ responsible investment policies, and meet quarterly with them to monitor their engagement activities as part of the overall objectives of the Fund’s investment strategy.

 

The Panel welcomed the guidance to responsible investment, and

 

Resolved –

 

That the updated Responsible Investment Policy Statement for the Royal Borough of Greenwich’s Pension Fund, which formed part of its Investment Strategy Statement, be agreed.

11.

Pension Fund Draft Accounts for the period ending to 31 December 2018 pdf icon PDF 59 KB

The Panel to note the draft Pension Fund accounts for the period ending 31 December 2019 (Appendix A).

Additional documents:

Minutes:

The Panel received a report introduced by the Accountancy and Business Change Manager, and

 

Resolved –

 

That the Royal Borough of Greenwich’s Pension Fund Draft Accounts for the period ending 31 December 2018, be noted.

12.

Fund Manager Performance to 31 December 2018 pdf icon PDF 87 KB

The Panel to note a report on the performance of the Royal Borough of Greenwich Pension Fund’s (‘the Fund’) investment managers for the period ending 31 December 2018.  To consider the information detailed in the Exempt Appendix to this report in closed session under the provisions of the Local Government Act 1972, Schedule 12A, Paragraph 3 “Information relating to the financial or business affairs of any particular person (including the authority holding that information)”.  To agree that the information detailed in the Exempt Appendix to this report be not subsequently released to the press or public.

Additional documents:

Minutes:

This Item was considered in a ‘closed session’, therefore, the discussions were not opened to members of the public.

 

Members received an update report introduced by Paul Potter, a representative from Hymans Robertson LLP in relation to the Royal Borough of Greenwich’s (Royal Borough) Pension Fund (“the Fund”) investment managers for the period ending 31 December 2018.

 

Members noted the following:

·                Over Q4 2018, the overall Fund’s assets decreased by circa £74m from £1,324m to £1,250m and the Fund’s allocations were broadly in line with the target allocations at the end of the quarter.

·                GDP data confirmed US growth remained strong in Q3. UK growth reached its fastest quarterly pace in almost 2 years while Eurozone growth slowed to 1.6% year-on-year. Japanese growth saw its sharpest quarterly decline in several years and Chinese growth fell to 6.5% in Q3.

·                Headline inflation fell in most regions but remains above core measures in the UK, Eurozone and Japan. Core and headline inflation are now broadly in line with the US.

·                Over the quarter, the BlackRock portfolio underperformed its composite benchmark by 0.1%.

·                Fidelity’s Global Emerging Market Equity fund underperformed its benchmark by 1.4% in Q4.

·                Fidelity’s Multi-Asset Credit fund underperformed its benchmark by 2.8% over Q4 (2.7% worse than the previous quarter) and by 4.4% over the 12 months to 31 December 2018.

·                Fidelity’s UK Aggregate Bond fund marginally outperformed the benchmark by 0.1% in the quarter and continued to outperform its benchmark over the longer term periods.

·                CBRE Property Fund delivered an absolute return of 1.0% (3.2% in Q3) and was in line with its benchmark over the 12 months to 31 December 2018.

·                Partners Group returned 0.1% over the quarter, underperforming its target by 2.1%. The portfolio also returned 5.3% over the 12 months to 31 December 2018, underperforming its target by 3.4%.

·                Overall, the total assets (excluding Private Equity and Cash funds) delivered an absolute return of -5.6% over the quarter and underperformed the overall benchmark by 1.4%. The total assets have also underperformed over the longer term.

The Panel

 

Resolved –

 

That the report on the performance of the Royal Borough of Greenwich’s Pension Fund’s investment managers for the period ending 31 December 2018, be noted.

13.

Training - Accounting and Auditing Standards pdf icon PDF 37 KB

The Panel to receive training from Hymans Robertson on accounting and auditing standards.

Minutes:

The Panel

 

Resolved –

 

That training received by Members by Douglas Green, a representative from Hymans Robertson on account and auditing standards, be noted.