Minutes of Proceedings

Session: Session currently unavailable

Date: 19 January 2016

In the Chair: Mr T Lunn MLA

The Chairperson welcomed all attendees to the meeting and wished them a Happy New Year. The Chair advised that Ms Ruane and Mr J Wells would join the meeting later. The Chairperson also advised the Trustees, that Mr Alec Spooner from M&G would be invited into the meeting later to provide an update on the investment of the Fund.

1. MINUTES OF PREVIOUS TRUSTEES MEETING

The draft minutes of the meeting held on 6 October 2015, and the closed meeting held on 17 November 2015 were agreed. The minutes of the closed meeting held on 1 December 2015 will be amended and reissued to Trustees for agreement.

Action required:

  • Agreed minutes of the 6 October 2015 meeting to be uploaded to the Assembly website (Pensions Team).
  • Closed minutes of the 1 December 2015 meeting to be amended and reissued to Trustees for final approval (Pensions Team).

2. STANDING ITEMS

Risk Register

The Trustees noted that there had been no change to the risk register since the last meeting.

There were no comments on the risk register.

Conflicts of Interest

The Trustees declared that their membership of the Scheme is an ongoing conflict.

3. MATTERS ARISING

Councillor Pension Transfer

The Chairperson informed the Trustees that this exercise has now been completed, with all 5 Member transfers having been made.

It was highlighted that a recent new Member had joined the NIAMPS and had come from a council. It was agreed to highlight to this Member the possibility of transferring his pension within the agreed 12 month deadline of joining the Northern Ireland Assembly.

Action required:

  • Letter to be sent to the new Member to advise of the opportunity, within 12 months of joining the Northern Ireland Assembly, to transfer his current pension with the council to the NIAMPS (Pensions Team).

4. PENSION FLEXIBILITY

This item was deferred from the last meeting when the Trustees considered the option of combining Additional Voluntary Contribution (AVC) benefits with main scheme benefits for the purposes of taking a tax free lump sum on retirement. A joint Eversheds and GAD paper, and a further note from Eversheds regarding the use of the statutory override were considered, but no decision had been made.

Some discussion took place around the role of the Trustees, the Independent Financial Review Panel (the Panel) and the Assembly Commission in relation to the scheme. The Trustees also discussed the changes that the Panel are intending to make in relation to AVCs and the cost to the Scheme of offering AVCs.

Mr Wells joined the meeting at 9:28am
Ms Ruane joined the meeting at 9:30am

Mr Wells declared that his membership of the AVC scheme is a potential conflict of interest.

The Chairperson informed the Trustees that the Panel wish to meet to discuss the new pension scheme. The Trustees agreed to defer any decision on AVCs until after this meeting.

Mr Dallat left the meeting at 9:43am

Action required:

  • Meeting to be arranged with Independent Financial Review Panel (Pensions Team).

Clerical Medical Name Change

The Trustees noted that the Pensions Team have issued a copy to all AVC contributors of the letter from Clerical Medical advising of their intention to restructure and rebrand.

Scheme Reconciliation Service (HMRC)

The Trustees noted that the Pensions Team are currently working with HMRC to reconcile scheme data with the data they currently hold for deferred pensioners.

GAD Factor Review

The Trustees noted that a letter had been sent to GAD following the last meeting informing them of the Trustees decisions with regards to the actuarial factors used in the Scheme and that the new factors have been provided and are in use.

5. INDEPENDENT FINANCIAL REVIEW PANEL UPDATE

The Trustees noted that the Panels determination along with the new pension scheme is due to be published shortly. Once the new scheme rules are agreed, the Pensions Team will begin work on revising the scheme booklet, letters and processes.

6. MLA LIST OF DUTIES

The Trustees reviewed the outline of an MLA's role, which is to be issued to the Schemes medical advisers as part of the Ill Health Retirement process. The Trustees agreed that the following amendments should be made to this document:

- Some MLAs hold additional roles in outside bodies
- Some MLAs are Ministers, Chairs and Vice-Chairs of Committees
- Some MLAs have long distances to travel to attend Parliament Buildings, or meetings in other locations.

Action required:

  • Amendments to be made and document sent to Trustees for final approval (Pensions Team).

7. ANY OTHER BUSINESS

The Trustees approved a new pension in respect of a former Member.

8. REVIEW OF INVESTMENT PERFORMANCE

The Chairperson referred the Trustees to a GAD paper reviewing the performance of the Investment Manager as at 30 September 2015. The Trustees expressed their disappointment with the Funds performance over the last year, particularly in relation to the holdings in the Recovery Fund.

The Trustees considered the paper provided by GAD and agreed specific questions to ask Mr Spooner.

9. INVESTMENT MANAGER UPDATE

The Chairperson invited Mr Spooner to join the meeting at 10:05am and welcomed him.

Mr Spooner summarised the overall performance of the fund as acceptable, but acknowledged that the performance of the Recovery fund has been disappointing; however M&G remain committed to the fund.

In conclusion:

- M&G have not met their performance target on the main mandate to exceed the benchmark by 1% pa over the three years to 30 September 2015. The return has been 5.1% pa which is lower than the benchmark return of 7.9% pa;

- The main reason for underperformance is the stock selection within the Recovery Fund. Over the three year period to 30 September 2015, the Recovery Fund underperformed with a return of 0.6% pa compared to its benchmark return of 7.2% pa;

- The Recovery Fund performed well in the first years of the contract, but the last 3 – 4 years have shown poor returns which has resulted in the fund failing to meet its outperformance target over the lifetime of the contract;

- The other main actively managed fund (the Long Dated Corporate Bond Fund) outperformed by 0.3% pa over the three years, and by 0.2% over the year;

- The Emerging Markets Fund also performed poorly with an underperformance of 1.5% pa over the three years, underperforming the benchmark by 6.1%;

- The passive funds have provided returns that closely tracked the relevant benchmark return.

Mr Hussey left the meeting at 10:43am

The Trustees discussed performance of the funds and directed several questions to Mr Spooner.

The Chairperson thanked Mr Spooner for attending the meeting.

Mr Spooner left the meeting at 11:02am

Mr McClintock from Deloitte advised the Trustees that they need to consider their investment choices and may wish to seek further advice from GAD. The Trustees felt that it would be helpful to compare the Recovery Fund performance against other providers and asked Deloitte if they could carry out some research.

Action required:

  • Request to be made to GAD for more comprehensive review (Pensions Team).
  • Deloitte to investigate the possibility of providing comparison figures for Recovery Fund performance for other investment funds (Deloitte).

10. DATE OF NEXT MEETING

Tuesday 15 March 2016.

The Chairperson thanked everyone for attending the meeting today.

The Trustee meeting ended at 11:15am

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