Minutes of Proceedings

76^th Meeting of the Pension Trustees held on

Tuesday 29 January 2019 at 9:30am, Room 106

The Chairperson thanked everyone for attending the meeting and welcomed Observers Mr O’Dowd (Sinn Fein) and Mr Catney (SDLP).  The Chairperson reminded the Trustees that they had agreed to invite Sinn Fein and the SDLP to nominate an Observer to ensure that Members views are widely represented at meetings.  The Chairperson reminded the Observers that they are subject to the same confidentiality requirements as Trustees, will be issued with meeting packs and will be able to participate fully in discussions, but they will not be able to vote.

The Chairperson welcomed Mr Burns and Mr McClintock from Deloitte, and handed over to Mr Burns for a short training session.  Mr Burns delivered training on Trustees Fiduciary Duty.

Mr O’Dowd asked for clarification on the difference between a Trustee and an Observer.  Mrs Anderson explained that under the Scheme Rules, five Trustees are appointed by resolution of the Assembly; however due to the lack of a functioning Assembly, it has not been possible to appoint new Trustees.  She explained that while the Observers will participate in Trustee meetings, they will not be asked to vote.  Mr O’Dowd asked if Observers hold any legal responsibility.  Mr McClintock advised that under the Scheme rules, pensions legislation and regulation Observers have no legal standing and would not be held responsible for actions that the Trustees take.

The meeting continued according to the agenda.

1. APOLOGIES

No apologies were received.

2. MINUTES OF PREVIOUS TRUSTEES MEETINGS

The draft minutes of the regular meeting held on 23 October 2018 were agreed.  Mr Wells wished to note that under Matters Arising, the age related pension issue had been resolved to everyone’s satisfaction.

Action required:

• Agreed minutes of the 23 October 2018 meeting to be uploaded to the Assembly website (Pensions Team).

3. STANDING ITEMS

Conflicts of Interest

The Trustees did not have any conflicts to declare.

Risk Register

The Chairperson advised that there have been no changes to the 2018-19 Risk Register that had been agreed at the previous meeting.  He asked for any comments.  Mrs Anderson proposed that the Introduction page of the Risk Register be updated to include the appointment of the Observers.

Action required:

• Risk Register to be updated to include the appointment of the Observers (Pensions Team).

Review of Action Points

The Chairperson explained that this was a new agenda item, in which all actions arising from meetings, and progress against them, would be recorded and reported on the table included in the packs.  The Chairperson handed over to Mrs Anderson.

Mrs Anderson referred to the table in the packs and explained that any items in grey are currently in progress, and an update will be provided as things move forward.  Items in white have been completed, and will be removed for the following meeting.

Mrs Anderson reviewed the list of action points and the Trustees noted the following completed actions:

• The contract with M&G for Investment Management services was extended to November 2020;
• A letter explaining the pensions impact of the Secretary of States determination issued to Members on 11 December 2018;
• The Scheme Annual Report and Accounts for 2017 – 18 was printed, laid and distributed to Members in December 2018.  This completed the Northern Ireland Audit Office requirements for the 17-18 year;
• The revised Internal Dispute Resolution Procedure (IDRP) was uploaded to the Assembly website;
• The Permitted Maximum Pension issue was resolved, contributions refunded and service record adjusted.  A revised benefit statement has been issued to the Member;
• The Age related issue was resolved, contributions collected and service record adjusted;
• The Ill Health Retirement application form has been revised to include information on the Members right to refuse to provide medical information and the consequences of not providing the information.

4. GENERAL DATA PROTECTION REGULATIONS (GDPR)

The Chairperson explained that an updated version of the GDPR Action Plan has been included in the packs, and that the Privacy Notice has also been reviewed and updated.  He asked everyone to note that a number of contracts are still being revised, and handed over to Mrs Anderson for an update.

Mrs Anderson explained that existing contracts had to be amended to ensure GDPR compliance, and that this became more complex when the contract was on the contractor’s terms, which was the case for most of the Trustee’s contracts.

GAD

Mrs Anderson provided an updated on the contract with GAD.  She advised that revised terms of business were received and reviewed by Eversheds, and that while the Privacy Notice will require updating, the negotiations are complete and the contract is now compliant.

Administration Agreement

Mrs Anderson discussed the Administration Agreement and explained that this is the contract between the Assembly Commission and the Trustees for in-house services provided by the Human Resources and Finance Offices.  She advised that discussions have been ongoing between Eversheds, on behalf of the Trustees, and the Assembly’s Legal Services, on behalf of the Commission; and that Eversheds have asked for these outstanding issues to be raised with the Trustees.

Payment for rectification

The Trustees and Observers discussed the issue of who would meet the cost of rectifying security breaches.  Mr Wells asked for a copy of Eversheds Legal advice and the Administration Agreement to be sent to the Trustees to further consider this.  The Trustees agreed that a letter should be sent to the Commission.

Data Retention

The Trustees and Observers discussed Eversheds advice on this point.  Mrs Anderson reminded everyone that the purpose of the exercise is to ensure that the Administration Agreement is GDPR compliant.  It was agreed that the Trustees would decide after they have had an opportunity to look through the document and legal advice.

Deloitte

Mrs Anderson explained that this contract is for administration services.  She said that Deloitte’s revised terms of business state that they are data controllers although they carry out only processing activities for the scheme.  The Trustees noted Eversheds comments and the Deloitte responses.  The Trustees were content to accept that this contract is now compliant.  The Privacy notice will be updated accordingly.

Privacy Notice

Mrs Anderson advised that the privacy notice has now been updated to include links to GAD’s privacy notice, Deloitte’s privacy notice, and the National Fraud Initiative’s privacy notice.  She explained that it would be reviewed as required and at least annually.  Mrs Anderson said that if the Trustees were content then the revised privacy notice would be uploaded to the website, emailed to active Members, and issued to pensioners and deferred members in hard copy.  The Trustees agreed.

Action required:

• A letter to be issued to the Assembly Commission regarding the cost of rectifying security breaches (Pensions Team);
• A copy of the Admin Agreement, and legal advice provided by Eversheds to be issued to the Trustees and Observers (Pensions Team);
• Revised Privacy notice to be uploaded to website and distributed (Pensions Team).

5. DELOITTE - ANNUAL ADMINISTRATION REPORT

The Chairperson explained that this is a new item, and advised that each year Deloitte will produce a report summarising the administration tasks undertaken during the year.  The Trustees and Observers were asked to note the content of this report, including the schedule of training included.

6. REVIEW OF INVESTMENT PERFORMANCE – GAD QUARTERLY REPORT

The Chairperson asked for any comments on the GAD report for Quarter 3: July – September 2018.  The Trustees discussed Fund performance and felt the returns were disappointing over the quarter and the last year.  It was agreed that M&G should be invited to the next meeting to discuss performance, particularly the performance of the Episode Allocation Fund.

Action required:

• Representatives from M&G to be invited to the next Trustee meeting (Pensions Team).

7. M&G QUARTERLY REPORT

The Chairperson asked for any comments on the M&G summary report for the period ending 30 September 2018.  The report was briefly discussed; however, it was agreed that this would be discussed further at the next meeting with M&G.

8. INVESTMENT STRATEGY

The Chairperson reminded everyone that at the last meeting they had discussed a letter from Steven Agnew regarding the extent of the Scheme’s investment in fossil fuels; and that they undertook to informally take the views of their colleagues at Party meetings.

The Trustees reported back on their findings.  Mr Wells reported that his Party were content to leave decision making to the Trustees, but felt that Trustees main responsibility was to maximise profits, however thought that it was worth looking into some element of ethical funding. 

The Chairperson advised that other than one exception who would like to see some ethical offering, the Members of his party were content to leave the decision to the Trustees.

Mr Beggs explained that, as a Trustee he felt it important to act in the best way for all beneficiaries of the Scheme and would be apprehensive to make any significant change that would endanger the Scheme; but would be open to considering some ethical options.

The Trustees were interested in hearing the views of Mr O’Dowd’s party and Mr Catney’s party, and asked if they would raise this with their colleagues.

Mr O’Dowd queried his role as an Observer, and asked if legal advice could be provided regarding his role, and what legal protection he has.  The Chairperson reiterated that Observers do not have any legal responsibility, but training would be provided to help with the role.  Mr McClintock advised that the Trustees are liable for any decisions made and not the Observers, even if the Trustees acted on the advice of the Observers.

Mr Catney left the meeting at 11:05am.

The Chairperson advised that the Law Commission has produced guidance for Pension Trustees which reviews the legal concept of ‘fiduciary duty’, and is included in the packs.

Mr Catney returned to the meeting at 11:07am.

It was agreed that Investment Advisers from Deloitte would be invited to attend the next meeting to participate in the discussion with M&G on performance and exposure to fossil fuels, and M&G fund options.

Action required:

• Observers to seek the opinion of Party colleagues re investing in fossil fuels (Observers).
• Legal guidance to be provided regarding the role of Observers (Pensions Team)
• Investment Advisers from Deloitte to be invited to attend next meeting (Pensions Team).

9. ANY OTHER BUSINESS

Death of Pensioner Member

The Members were saddened to hear of the death of former Member, Dr Ian Adamson and expressed their condolences to the family. The Trustees approved a spouse’s pension.

EU Exit

Mr McClintock gave Members a brief update on issues of interest to pension trustees arising from EU Exit.

10. DATE OF NEXT MEETING

Meeting with Investment Manager to be arranged for Tuesday 9 April 2019 @ 10:30am

The Chairperson thanked everyone for attending the meeting today.

The Trustee meeting ended at 11:15am