Cambridgeshire Pension Fund Governance Update Jo Walton.
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Transcript of Cambridgeshire Pension Fund Governance Update Jo Walton.
Cambridgeshire Pension FundCurrent Governance Arrangements• Pension Fund Board• Investment Sub-Committee• What the Boards do
and finally…
Future Governance Arrangements• Local Pension Boards• Scheme Advisory Board• The Pensions Regulator
Cambridgeshire Pension Fund Board
To set the Pension Fund objectives and determine and maintain appropriate strategies, policies and procedures with ongoing
monitoring.
Terms of appointment As prescribed in the County Council’s Constitution
Frequency of meeting 4 per annum + 1 Annual General Meeting
Voting Rights All Board Members have equal rights
Training All Board Members have access to relevant and regular training to ensure their knowledge facilitates effective decision making
Board Representatives
Representatives of: Number of seats:
Position held by:
Cambridgeshire County Council Members
6 Cllr Steve Count (Chairman)Cllr Roger Hickford (Vice-Chairman)Cllr Maurice Leeke Cllr John ReynoldsCllr Peter AshcroftCllr Michael Shellens
All other local authorities, police and fire
2 Cllr David SeatonVacant – recruitment in progress
All other employers 1 Tim Woods
Active scheme members 1 Matthew Pink
Deferred and pensioner scheme members
1 John Walker
Board Substitute RepresentativesSubstitute Representatives Representation Group
Cllr Simon Bywater Cambridgeshire County Council
Cllr Peter Downes Cambridgeshire County Council
Cllr Lucy Nethsingha Cambridgeshire County Council
Cllr John Bullen Cambridgeshire County Council
Cllr John Clark Cambridgeshire County Council
Cllr Peter Reeve Cambridgeshire County Council
Cllr Barry Chapman Cambridgeshire County Council
Cllr Mac McGuire Cambridgeshire County Council
Cllr Michael Rouse Cambridgeshire County Council
Vacant – recruitment process nearing completion.
All other Local Authorities, Police and Fire
Gareth Deeble All other Employers
Lee Hurley Scheme Member Representative
Role of the Pension Fund BoardStrategy/Policy/Procedure
Detail
Funding Strategy Evaluate Employer Risk• Monitoring and management of liabilities. • Funding plans for all employers.
Triennial and interim valuations
Determining employer contribution rates with the actuary.
Investment Strategy
Determine investment objectives.Set and review long term high level investment strategies to ensure alignment with the Fund’s liability profile and risk appetite.
Administration Strategy
Collecting income, calculating and paying benefits, gathering from and providing information from scheme members and employers.
Communications Strategy
Determining the methods of communications with stakeholders, including scheme members and employers.
Discretions Determining the operations of administering authority discretions.
Governance Key governance arrangements, including representation.
Risk Management Strategy
Regular monitoring of key risks and agreeing how they are managed and/or mitigated.
Role of the Investment Sub-Committee
To provide operational governance of investments
Terms of appointment As prescribed in the County Council’s Constitution
Frequency of meeting 4 per annum
Voting Rights All Board Members have equal rights
Training All Board Members have access to relevant and regular training to ensure their knowledge facilitates effective decision making
Cambridgeshire Pension Fund Investment Sub-Committee
Representatives of: Number of seats:
Position held by:
Cambridgeshire County Council Members
4 Cllr Steve Count (Chairman)Cllr Maurice Leeke (Vice-Chairman)Cllr Roger HickfordCllr Peter Ashcroft
All other local authorities, police and fire and;All other employers
2 Cllr David SeatonTim Woods
Scheme members 1 John Walker
Role of the Investment Sub-CommitteeDelegated Authority to:
Implement the Fund’s Investment Strategy
Review and maintain the detailed asset allocation of the Fund
Appoint and terminate Investment Managers
Monitor performance of Investment Managers
Appoint , monitor and where necessary terminate external advisors – Custodian and Independent Investment Advisers, Consultants and Managers
Set benchmarks and targets for the Fund’s Investment Managers
Monitor risks inherent to the Fund’s Investment Strategy
Monitor and review: • Legislative, financial and economic changes relating to investments and their potential impact; • Investment management fees;• Transaction costs incurred by the Fund across its investment mandates;• The Investment Managers’ adoption of socially responsible investment considerations annually.
Independent Public Service Pensions Commission• 2010 – Lord Hutton commissioned to chair the IPSPC review of public
service pension provision.
• 2011 - Final report issued – 27 recommendations
• 2/27 recommendations affecting the governance arrangements of all public service pension schemes regardless of existing established arrangements
• Recommendation 17 – More independent oversight
• Recommendation 19 – Much stronger governance of ALL public service pension schemes
IPSPC – Recommendation 17Every public service pension scheme should have a board that:
• is properly constituted;
• is represented by trained and competent individuals;
• consisting of employee nominees;
• is responsible for meeting good standards of governance including effective and efficient administration.
There should be a pensions policy group for each scheme at national level for considering major changes to scheme rules.
This led to the creation of Local Pension Boards and LGPS Scheme Advisory Board via the Public Services Pensions Act 2013.
Local Pension BoardsPublic Services Pensions Act 2013 (section 5)
IPSPC – Recommendation 17
Assist the scheme manager (the administering authority) in securing compliance with the scheme regulations and other legislation relating to the governance and administration of the scheme in the areas of:
• managing risks and ensuring there are adequate internal controls;
• keeping records and ensuring the quality of member data;
• ensuring the correct contributions are paid to the scheme;
• managing conflicts of interest;
• publishing information about the board;
• communicating information to members;
• resolving disputes and reporting certain breaches of the law.
Local Pension BoardsRequirements to create and operate the new Local Pension Boards:• to be established in the County Council’s Constitution by 1.4.15;
• to consist of equal numbers of employer and member representatives;
• representatives must be fully competent and knowledgeable upon appointment;
• knowledge cannot be collective;
• the board may contain independent experts;
• board members must act in accordance with scheme regulations and other governing documents;
• the board must meet a minimum of twice per year;
• members of the Pension Fund Board and Investment Sub-Committee cannot sit on the Local Pension Board.
Pending final LGPS regulations and subsequent guidance.
The Public Services Pensions Act 2013 (section 7)IPSPC – Recommendation 17
Pensions Policy Group for each Public Service Pension Scheme
• Consider major changes to scheme rules
• LGPS Scheme Advisory Board (National)
LGPS Scheme Advisory Board
• Currently in shadow form
• Encourage best practice
• Increase transparency
• Co-ordinate technical and standards issues
• Consider items passed from DCLG, SAB sub-committees and other stakeholders
• Liaison role with the Pensions Regulator
• Formulate guidance and standards for administering authorities and pension boards.
The LGPS Scheme Advisory Board will remain in shadow form pending its formalisation within the LGPS Regulations during 2014-15.
Scheme Advisory Board
IPSPC – Recommendation 19
Improvement of governance, availability, and transparency of information relating to public service pension schemes by
establishing a framework that ensures independent oversight of the governance, administration and data transparency of
public service pension schemes.
Resulted in the regulatory powers of the Pensions
Regulator being extended.
The Pensions RegulatorIPSPC – Recommendation 19
Only certain aspects of the public service pension schemes will be covered by the tPR: • knowledge and understanding of board members;
• record keeping/quality of data;
• communications – accuracy, timeliness and clarity.
Powers of the Pensions Regulator:
• Risk based prioritisation;
• Education and enablement;
• Enforcement.
Pension Fund Board Agendas and Reports
http://www2.cambridgeshire.gov.uk/CommitteeMinutes/Committees/Committee.aspx?committeeID=60
Investment Sub-Committee Reports
http://www2.cambridgeshire.gov.uk/CommitteeMinutes/Committees/Committee.aspx?committeeID=62
Pension Fund Strategies
http://pensions.cambridgeshire.gov.uk/index.php/governance2/key-documents/
Shadow Scheme Advisory Board
http://www.lgpsboard.org/
The Pensions Regulator – Public Service Pension Schemes
http://www.thepensionsregulator.gov.uk/public-service-schemes.aspx
Additional Information