Minutes of Proceedings

79^th Meeting of the Pension Trustees held on

Tuesday 24 September 2019 at 11:00am, Room 106

The Chairperson thanked everyone for attending the meeting and welcomed Mr Bull from the Government Actuary’s Department, Mr Burns from Deloitte and Mrs Martin, Deputy Head of Human Resources. 

1. APOLOGIES

Mr John O’Dowd MLA

2. MINUTES OF PREVIOUS TRUSTEES MEETING

The draft minutes of the meeting held on 25 June 2019 were agreed.

Action required:

• Agreed minutes of the 25 June 2019 meeting to be uploaded to the Assembly website (Pensions Team).

3. STANDING ITEMS

Conflict of Interest

Mr Wells reminded the Trustees that he is also a Member of the Assembly Commission.

The Trustees declared their interest in item 9 - transitional protection, as the introduction of the new scheme impacted on all scheme members.

Risk Register

The Chairperson reminded the Trustees that the new version of the risk register was considered at the last meeting.  It was agreed that a session on risk scoring would be added to this meeting, but after further consideration it has been decided to set up a separate workshop to focus solely on the risk register. 

Action required:

• Organise ‘Risk Scoring’ workshop (Pensions Team).

Review of Action Points Arising from Meetings

The Chairperson handed over to Mrs Anderson for an update.  Mrs Anderson highlighted the action points that had been completed since the last update.  She advised that the Administration Agreement would be formally presented to the Assembly Commission for acceptance.

Action required:

• Administration Agreement to be presented to the Assembly Commission and then signed by the Trustees (Pensions Team).

4. M&G UPDATE

The Trustees considered the quarterly report and summary for the period ending 30 June 2019.  An update on general market performance and the performance of the Episode Allocation Fund were also considered.  

The Trustees noted the underperformance of the Fund against the benchmark over the last few years and agreed to invite Mr Spooner to attend the next meeting to provide a further update.

Action required:

• Mr Spooner to be invited to next Trustee meeting (Pensions Team).

5. GAD REVIEW OF INVESTMENT PERFORMANCE

The Chairperson invited Mr Bull to summarise the key points in the quarterly investment review for the period ending 31 June 2019.  The Trustees discussed their concerns about the Fund performance, and will review this again at the next meeting.

6. AMPS STATEMENT OF INVESTMENT PRINCIPLES

The Chairperson reminded the Trustees of the discussions about ethical investments facilitated by Deloitte, particularly the Fund’s exposure to fossil fuels.  It was agreed at the June meeting to review the Investment Strategy and Statement of Investment Principles as a preliminary step. 

Mr Bull was invited to talk through his paper.  Mr Bull explained that the SIP was last reviewed in 2015.  There have been some significant changes to the Investment Strategy in the intervening period.  The draft SIP included in the pack has been updated to reflect these changes.  In addition, new legislative requirements will apply from October 2020 and the updated draft SIP will meet the new requirements.

Before considering the SIP any further, Mr Bull facilitated a broader discussion about the Investment Strategy and short-term changes which could be made immediately to the strategy to achieve similar returns but potentially better outcomes.

The Trustees agreed to make a modest increase in the Fund’s investment in the Emerging Markets Fund and to switch the Fund’s investment in Long Term Gilts to Index Linked Gilts to provide better protection against high inflation in the long term.

The Trustees resumed their consideration of the draft SIP and agreed to accept the proposed draft on the basis that it reflects the current position, and that it will be reviewed as part of the tender process for Investment Manager, due next year.

Action required:

• M&G to be instructed about the change in short term investment strategy (Pensions Team)
• Trustees to sign revised SIP (Pensions Team)
• SIP to be reviewed as part of the tender process (Trustees).

7. TRANSITIONAL PROTECTION (MCCLOUD / SARGEANT JUDGEMENT)

The Chairperson reminded the Trustees that this case was mentioned by Mr Allen (Northern Ireland Audit Office) when he attended the June meeting.  The Trustees were reminded that this case relates to ‘transitional protection’ specifically in the Judges pension scheme and the Firefighters pension scheme.

This is the policy which protected some older public sector workers from the effects of the new career average pension schemes with higher pension ages, introduced in 2015.  The new Assembly Members Pension Scheme (NI) introduced in May 2016 contained a similar provision.

The Trustees considered a paper from Eversheds detailing the potential impact of the judgement on the Assembly Members Pension Scheme.

The Trustees noted the Eversheds advice to keep a watching brief on the remedy determined in the McCloud / Sargeant case, before taking any action.

Mrs Anderson informed the Trustees that allowance for past service costs has been made in the annual accounts for the period ending 31 March 2019 as per Northern Ireland Audit Office guidance.

Action required:

• Keep a watching brief on outcomes in this case (Pensions Team).

8. AMPS ANNUAL REPORT AND ACCOUNTS

The Trustees considered the draft Annual Report and Accounts for the period ending 31 March 2019.  The Chairperson informed the Trustees that the Northern Ireland Audit Office have completed their fieldwork and are working with the Pensions Team.  The Report and Accounts will be laid before the Assembly in due course.

Action required:

• Annual Report and Accounts to be laid before the Assembly (Pensions Team).

9. ANY OTHER BUSINESS

New Pensions

The Trustees ratified pensions in respect of two former Members.

10. DATE OF NEXT MEETING

The date of the next meeting to be arranged for Tuesday 26 November 2019 @ 11:00am.

The Chairperson thanked Mrs Anderson for her long service to the Pensions Team and wished her well in her new job.  Mrs Anderson thanked the Chairperson and the Trustees for their kind words and their input to the Scheme over the years.