Minutes of Proceedings

70^th Meeting of the Pension Trustees held on
Tuesday 15 November 2016 at 9:15am, Room 106

The Chairperson thanked everyone for attending the first meeting of the new mandate, and highlighted that there are a number of items carried over from the January Trustee meeting for discussion today.

The Chairperson welcomed Mr Burns from Deloitte to the meeting.  The Chairperson advised that a letter has been issued to Mr Dallat thanking him for his long service as a Trustee, and welcomed Mr McPhillips as a new Trustee. 

1. APOLOGIES

No apologies were received.

2. MINUTES OF PREVIOUS TRUSTEES MEETING

The draft minutes of the meeting held on 15 March 2016 were agreed. 

Action required:

• Agreed minutes of the 15 March 2016 meeting to be uploaded to the Assembly website (Pensions Team).

Mr McPhillips joined the meeting at 9:30am

3. STANDING ITEMS

Risk Register

The Risk Register has been updated for the 2016/17 year.  The Chairperson advised that the updates include some changes to the categorisation of the risks by the Pensions Team.  The Trustees discussed the updated Risk Register and agreed that uncertainties around Brexit should be added as a risk.  The Trustees agreed the Risk Register subject to the addition of Brexit.

Action required:

• Uncertainties around Brexit to be added as a Risk to the 2016/17 Risk Register (Pensions Team).

4. CONFLICTS OF INTEREST

The Trustees declared that their membership of the Scheme is an ongoing conflict.  Mr Wells declared his personal interest in relation to item 5.1 AVC Flexibility.

5. MATTERS ARISING

AVC Flexibility

The Chairperson reminded the Trustees that this item has been on the agenda for some time. 

Mr Wells joined the meeting at 9:34am

The Trustees considered papers from GAD, Eversheds and the Pensions Team and discussed whether to permit Members with AVC funds to combine their AVCs and main Scheme benefits at retirement for the purposes of taking a tax free lump sum.  The Trustees considered the number of scheme members likely to be affected and whether there was any actual or potential cost to the scheme. 

It was agreed that this matter would be put to a vote of all Trustees later in the meeting as Ms Ruane had to attend another meeting.

Ms Ruane left the meeting at 9:45am

The Chairperson vacated the Chair at this time to allow a new Chairperson to be voted in.  Mr Wells proposed Mr Lunn for Chairperson, Mr Hussey seconded the proposal.  The vote was unanimous.

Mr Lunn resumed the Chair and the meeting continued.

Administration Agreement

At the last meeting the Trustees considered a report on the Pensions Team performance against the Administration Agreement.  A recommendation to amend deadlines related to the production of the Annual Report and Accounts was deferred to this meeting.  As this deadline is subject to the production and audit of the accounts, and outside the Pension Team’s control, the Trustees agreed to revise the deadline for the Annual Report and Accounts from ’31 October annually’ to ‘by 31 March of the following year’.

Action required:

• Administration Agreement Service Standards to be amended (Pensions Team).

Consolidated Fund Contribution from 6 May 2016

The Trustees noted the final paper from GAD (dated 21 April 2016) confirming that the consolidated fund contribution payable by the Assembly would reduce from 20.6% to 14.4% effective from 6 May 2016.

MLA Duties

The Trustees considered the updated ‘Outline of MLA duties’ document, which is issued to the Scheme’s medical advisers as part of the Ill Health Retirement process.  Some further amendments were proposed under the section ‘Work carried out in the Constituency’

- amend wording in bullet points 1 and 2, from ‘…which may include    
  evenings…’ to ‘…which includes evenings…’

- in point 6 extend definition of correspondence to include letters, e- 
  mails, texts and social media.

The document was agreed subject to the above changes being made.

Action required:

• MLA Duties document to be revised accordingly (Pensions Team).

Investment Changes – Transfer of Assets from Recovery Fund to Passive Fund

The Chairperson reported to the Trustees that the transfer of the Fund’s assets from the M&G Recovery Fund to the M&G UK Passive Equity Fund agreed at the last meeting, had been completed.  The Trustees noted the Investment Summary provided by M&G for the period ending 30 September 16.

6. REVIEW OF CONTRACT FOR LEGAL ADVICE

The Chair reminded the Trustees that a contract for provision of pension legal advice is in place with Eversheds.  In January 2015, the Trustees agreed that the contract should be formally reviewed in September 2016.  The Trustees considered a paper from the Pensions Team and discussed their satisfaction with the current arrangement with Eversheds.  In light of value for money considerations, the service provided by Eversheds, and their experience with the Scheme, the Trustees agreed to extend the contract with Eversheds for a further 3 year period.

Action required:

• Letter to be issued to Eversheds formally extending the contract for the provision of pension legal advice for a further 3 years (Pensions Team).

7. BREXIT – IMPLICATIONS FOR AMPS

The Chairperson referred the Trustees to the GAD paper on the impact that Brexit has already had on investment markets that are relevant for pension schemes, and the potential impact it might have in the future.  The Trustees agreed that the move from the Recovery Fund into the Passive Equity Fund was fortuitously timed.  The Trustees agreed to maintain a watching brief as the practical details of Brexit emerge over time. 

Mr Burns (Deloitte) endorsed GAD’s suggestion to ask M&G to prepare a report on how Brexit has affected the prospects for the various portfolios the Scheme is invested in, and whether they have implemented (or plan to implement) any tactical asset decisions to take advantage of opportunities.

The Trustees agreed to invite M&G to the next meeting to provide a briefing on this.

Action required:

• Arrange for M&G to attend the next Trustee meeting to report how Brexit has affected the prospects for the various portfolios the Scheme is invested in, and whether they have implemented (or plan to implement) any tactical asset decisions to take advantage of opportunities.  (Pensions Team).

8. ANY OTHER BUSINESS

New Pensions

The Trustees ratified 11 new Pensions.

Ms Ruane re-joined the meeting at 10:05am

Scheme Opt Outs and Transfers In / Out of the Scheme

The Trustees noted that 2 Members have opted out, 1 Member has transferred into the Scheme (before 6 May 16) and 1 Member has transferred out.

5.1 AVC Flexibility

The Chairperson invited the Trustees to return to Matters Arising issue 5.1 – AVC Flexibility.

The Trustees discussed this matter further.  There was concern that no Member should be unduly advantaged or disadvantaged.  It was noted that the AVC fund is made up entirely of Members’ personal contributions.  The Trustees considered the Governments approach to pensions and noted that making this change is not only acting within the law, but also acting in-line with Government policy for defined contribution pension schemes.

Mr Hussey proposed to permit Members with AVC funds to combine their AVC and main scheme benefits at retirement for the purposes of taking a tax free lump sum.  Mr McPhillips seconded the proposal.

“The Trustees resolve with effect from 15 November 2016, to use the statutory override power under section 273B of the Finance Act 2004, to provide that members with an additional voluntary contributions fund who are required to take their additional voluntary contributions fund at the same time as their defined benefit pension from the Scheme, may choose the extent to which their additional voluntary contributions fund under Article U will be used towards securing a pension commencement lump sum payable in accordance with the requirements of article G of the Rules”.

The Trustees voted as follows:

Mr Lunn –           Yes

Mr Hussey -        Yes

Mr McPhillips –  Yes

Ms Ruane -        No

Mr Wells -           Abstained – Mr Wells decided to abstain due to conflict of interest

The resolution was passed by a majority vote and is effective immediately.

Action required:

• Inform Clerical Medical and Members who make, or made, AVC contributions of the Trustee resolution (Pensions Team).

9. DATE OF NEXT MEETING

Tuesday 28 February 2017. 

The Trustees confirmed that the current time of 9:15am for the Trustee meetings is still suitable.

The Chairperson thanked everyone for attending the meeting today.

The Trustee meeting ended at 10:20am