Minutes of Proceedings

1. MINUTES OF PREVIOUS TRUSTEES MEETING

The minutes of the Trustee meeting held on 24 April 2012 were agreed.

Action required:

• Agreed minutes to be uploaded to the Assembly website (Pensions Team).

2. STANDING ITEMS

Risk Register

The Trustees noted that the risk register has been updated following end of year action and agreed to its' content.

3. MATTERS ARISING

Scheme Rules Review - update

The Trustees were reminded that, following IFRP's determination on salaries and pensions, Eversheds have been asked to revisit the draft scheme rules and ensure that all the changes have been included.

The Trustees noted that the draft Scheme Rules will be re-issued to the Assembly's Legal Services team for comment before being presented to the Commission and the Panel. The Trustees were advised that the revised Scheme Rules will be available in due course on the website and on request from the HR Office.

Action required:

• Issue revised rules to Legal Services for comment (Pensions Team)
• Final version of rules to be issued to the Commission and the Panel in due course (Pensions Team)
• Explanatory booklet to be updated and issued to all scheme members for information (Pensions Team).

Councillor Salary Abatements – update

The Trustees were advised that legal advice has confirmed that the reduction to MLA salaries in respect of Councillors is a statutory reduction, and therefore will impact the affected Members pension benefits.

The Trustees noted that the Finance Office has written to all of the affected Members giving them the option of giving up an equivalent amount from their Council allowance and therefore negating the impact on their Assembly salary and AMPS pension.

Investment Manager Tender – update

The Trustees noted that the tender process for Investment Manager will be continuing over the summer.

The Trustees were advised that the tender specification will be revised to take into consideration the investment strategy as agreed following discussion at today's meeting (agenda item 5).

The Trustees noted that the previously nominated evaluation panel (T Lunn, J Wells and R Hussey) will meet over the summer recess to finalise the tender documentation.

Action required:

• Revise tender specification (Pensions Team & Procurement Office)
• Take tender process forward (Procurement Office)
• Check panel availability and arrange suitable meeting (Pensions Team).

GAD Full Valuation 2008 - 2011 - update

The Trustees were reminded that at the last meeting, they had recommended that the consolidated fund contribution be adjusted downward to reflect the funding position of the scheme, but that no corrective action be taken in relation to the small surplus.

The Trustees noted that the recommendation along with the draft valuation report was issued to the IFRP for information and comment and that the panel has endorsed the recommendation. The final valuation report for 2008-11 was included for the Trustees' information at Tab 3.

The Trustees were advised that Pat McCartan had written to the Chairperson expressing the IFRPs view that the Scheme may benefit from amalgamation with another similar scheme. The Trustees agreed that it may be of benefit to explore this matter at a future date.

Outsourced Administration – update

The Trustees were reminded of the mini tender exercise run by the Pensions Team to appoint an outsourced administrator to replace SPPA when the contract expires on 30 September 2012.

The Trustees noted that a total of 6 companies submitted bids with Deloitte Total Reward and Benefits Limited being awarded the contract. The Trustees also noted that the Pensions Team have already held an initial meeting with Deloitte and have asked Eversheds to comment on the engagement document.

The Trustees commended SPPA for the good service they have provided since 2006 and agreed that a thank you letter be issued.

Action required:

• Set up the contract with Deloitte (Pensions Team)
• Letter to be drafted to SPPA thanking them for their service (Pensions Team).

4. REVIEW OF ACTUARIAL FACTORS

The Trustees noted that usual practice following a full valuation of the Scheme is to review the actuarial factors in use. The Trustees considered a paper prepared by GAD and discussed the key assumptions which underpin the actuarial factors used in the AMPS.

The Trustees agreed the key assumptions detailed in the GAD paper in respect of Cash Equivalent Transfer Value factors, transfer-in factors, commutation factors and early retirement factors.

Action required:

• Inform GAD of the Trustees decisions (Pensions Team)

5. REVIEW OF INVESTMENT STRATEGY

The Trustees were reminded of their previous discussions in relation to investment and risk in pension schemes. The Trustees considered the further GAD paper provided for the meeting and agreed that in order to spread investment risk they would diversify the current growth asset holdings into more asset categories than just equities. This would be achieved by using diversified growth funds.

The Trustees also discussed the subject of ethical investment and the possible impact of selecting a specialist ethical fund rather than a standard fund for investment. The Trustees considered a paper prepared by GAD comparing the performance of a variety of ethical funds with the performance of the fund and noted that a typical ethically based fund would over the last 3 years have produced a lower rate of return than the rate achieved by M&G.

The Trustees agreed that further information was required before making a decision with regard to ethical investment and requested that the Pensions team request research on how other legislature's pension's schemes view the use of ethical funds.

The Trustees agreed to request clarification from the Minister of the Department of Finance and Personnel (DFP) in relation to the funding of potential shortfalls in the fund if the Trustees take a specific investment decision to invest in an ethical fund with lower returns.

The Trustees may also wish to take the view of the membership on this issue once a reply has been received from DFP.

Action required:

• Revise Investment Manager tender specification (Pensions Team)
• Draft letter to DFP Minister regarding funding for shortfall in the AMPS (Pensions Team)
• Request paper from Research Services as to how other legislatures view investing in ethical funds (Pensions Team)
• Survey the membership seeking their views on ethical funding (draft letter to be cleared by Trustees) (Pensions Team).

6. ANNUAL REPORT AND ACCOUNTS 2011 - 12

The Trustees were advised that the first draft of the annual report and accounts for 2011 – 12 was not yet finalised and was therefore not included with the papers for today's meeting for their consideration.

The Trustees agreed that the finalised draft should be e-mailed to them for comment as soon as they have been finalised. The Trustees noted that the accounts have to be sent to the Northern Ireland Audit Office by Friday 29th June 2012.

Action required:

• Draft Annual Report & Accounts to be issued to the Trustees for comment prior to forwarding to NIAO on 29th June 2012 (Pensions Team).

Mr Dallat left the Room at 10.22am
Mr Brady left the Room at 10.23am

7. REVIEW OF THE INTERNAL DISPUTE RESOLUTION PROCEDURE

The Trustees considered and agreed the draft version of the 'Guide to the Internal Dispute Resolution Procedures'. The Trustees noted that the appropriate contact details have been updated and that the document is compliant with pension legislation.

Action required:

• Revised IDRP to be uploaded to website (Pensions Team)
• Risk register to be updated (Pensions Team)

8. ANY OTHER BUSINESS

The Trustees approved transfers into the scheme in respect of three members.

The Trustees noted that the Trustees of the Scottish Parliamentary Pension Scheme have indicated that they may wish to make contact individually with them as counterparts in other legislatures.

9. DATE OF NEXT MEETING

Tuesday 25th September 2012 at 9.30am