Minutes of Proceedings
Session: Session currently unavailable
Date: 29 July 2020
82nd Meeting of the Pension Trustees held on
Thursday 30th July 2020 at 1:40pm, via Microsoft Teams
1. APOLOGIES
There were no apologies.
2. MINUTES OF PREVIOUS TRUSTEES MEETING
The draft minutes of the meeting held on 18th February 2020 were agreed.
Action required:
- Agreed minutes of the 18th February 2020 meeting to be uploaded to the Assembly website (Pensions Team).
3. CHANGES TO THE BOARD OF PENSION TRUSTEES
It was noted that Dr Caoimhe Archibald, Mr Pat Catney and Mr Andrew Muir were appointed as Trustees of the Scheme by Resolution of the Assembly on 31st March 2020.
Following Mr Trevor Lunn’s resignation on 11th March 2020, the Trustees acknowledged the need to appoint a new Chairperson. Mr Catney nominated Mr Wells to replace Mr Lunn as Chairperson of the Board of Pension Trustees. Dr Archibald, Mr Muir and Mr Beggs supported Mr Catney’s nomination and Mr Wells was appointed as Chairperson with immediate effect.
The Chairperson requested that a letter is issued to Mr Lunn thanking him for his long service as a Trustee
Action required:
- Letter to be issued to Mr Lunn (Pensions Team)
STANDING ITEMS
4. CONFLICT OF INTEREST
The Chairperson reminded the Trustees that he is a member of the AVC arrangement with Clerical Medical.
Mr Beggs declared an interest in item 18 - transitional protection.
5. REVIEW OF ACTION POINTS ARISING FROM MEETINGS
The Chairperson handed over to Miss Foster for an update on the action points arising from previous meetings. Miss Foster noted the following:
- The draft procurement law advice note had been received from Eversheds however it did not specify whether the procurement of legal services for the Scheme falls under a specific exemption within the procurement regulations; or a so-called “light touch regime”; or neither as Eversheds stated that further analysis was required. The Trustees acknowledged that the advice note concluded that administration and consultancy services did not fall under an exemption, and therefore any tender exercise in respect of these services was required to be published in the Official Journal. The recommended approach in respect of the investment manager tender exercise was also noted. The Trustees agreed to accept the recommendation in the advice note and proceed on the basis outlined by Eversheds. Miss Foster said that she would liaise with Eversheds to obtain a conclusion on how the Trustees are to move forward with the procurement of legal services for the Scheme. In the meantime, the review of the contract with Eversheds remains on hold.
Action required:
- Conclusion on the procurement of legal services for the Scheme to be sought (Pensions Team)
- A new Independent Financial Review Panel has not yet been appointed, therefore work on the Brewster Judgement remains on hold.
- Work is now due to commence on Trustee Self-Assessment following the appointment of three new Trustees. Miss Foster said that she would schedule an introductory training session with Deloitte for the new Trustees.
Action required:
- Training to be scheduled for new Trustees (Pensions Team)
6. RISK REGISTER
Miss Foster thanked Mr Maclaren for his comments in relation to the risks associated with transfers-out based on unsuitable advice as well as the importance of regular Trustees’ training at meetings and confirmed that these had been factored into the risk register.
The Trustees noted the risk register and confirmed that no further changes were required at this time.
7. M&G UPDATE
The Chairperson noted the inclusion of M&G’s quarterly report for the period to March 2020 in the meeting pack, along with an update on market performance during this period, and a report on the performance of the Episode Allocation Fund.
8. GAD QUARTERLY INVESTMENT SUMMARY
The Chairperson handed over to Mr Maclaren for an update on the quarterly investment review for the period ending 31 March 2020.
Mr Maclaren presented a summary of the investment performance, which was discussed by the Trustees, Mr Maclaren and Mr Humpherson. Due to the upcoming investment manager tender exercise, M&G’s performance was not discussed in detail.
Mr Maclaren felt that the funds had performed as expected taking into consideration the volatility surrounding the coronavirus outbreak.
It was noted that the Episode Allocation Fund had made a meaningful recovery over the 2nd quarter from the downturn of the 1st quarter.
It was noted that the relative performance of the combined mandates had been added at the bottom line of the table in section 6.
9. TENDER FOR INVESTMENT MANAGER SERVICES
Miss Foster noted that the engagement documentation for the investment manager tender exercise is to be finalised and issued to the Chairperson for signing.
Action required:
- Engagement documentation for the investment manager tender to be issued to the Chairperson for signing (Pensions Team)
10. AMPS STATEMENT OF INVESTMENT PRINCIPLES
Miss Foster talked the newly appointed Trustees through the SIP for the Scheme. It was noted that the SIP would be reviewed as part of the investment manager tender exercise.
11. INVESTMENT STRATEGY
Mr Humpherson confirmed that GAD and Deloitte had reached agreement on the proposed strategy for taking forward into the investment manager tender exercise. Mr Humpherson suggested that Deloitte hold a separate training session for the Trustees on investments and the proposed strategy for the Scheme. Miss Foster agreed to take this forward with Mr Humpherson.
Action required:
- Investment training to be scheduled (Pensions Team)
12. MEMBER QUERY – FOSSILE FUELS
The Trustees noted the questions that had been received from Miss Woods in relation to the Scheme’s current investment strategy and ESG. The Trustees reviewed the Scheme’s current exposure to fossil fuels from M&G.
The Trustees highlighted the requirement for investment training before they would be in a position to respond to the queries, and asked that Miss Woods is invited to the next Trustees’ meeting for further discussion on the subject with their advisers.
Action required:
- Miss Woods to be invited to next meeting (Pensions Team)
Mr Humpherson and Mr Maclaren left the meeting
13. AMPS ANNUAL REPORT AND ACCOUNTS
Miss Foster explained that work on the Trustees’ Annual Report and Accounts for 2020 had commenced, and a draft copy would be included in the September meeting pack for review and comment.
Further to a query raised at the last meeting from Mr Wells, Miss Foster confirmed that there is currently one actively contributing member in the AVC arrangement with Clerical Medical and four deferred members.
Action required:
- Draft Annual Report & Accounts to be included in September meeting pack (Pensions Team)
14. ACTUARIAL TRIENNIAL VALUATION
Mr Mistry provided the Trustees with an overview of the actuarial triennial valuation process. Ms Bell added that the actuarial valuation report will confirm whether the Scheme has appropriate assets in place to cover its accrued liabilities.
Miss Foster said that she is currently working through some legacy data issues, and is awaiting legal advice from Eversheds, which has caused a delay in the provision of the data for the valuation to GAD. Miss Foster asked GAD to update the valuation timetable accordingly.
It was agreed that GAD would provide the Trustees with a training session on the actuarial triennial valuation at a meeting later in the year.
Action required:
- Valuation data to be provided to GAD (Pensions Team)
- Valuation timetable to be updated (GAD)
- Valuation training to be provided (GAD)
15. DATA REVIEW
Miss Foster provided the Trustees with a summary of the legacy data issues that had recently been identified, including six pensioner members who according to HMRC, transferred GMP into the Scheme.
Miss Foster referenced the legal advice that had been received from Eversheds on GMP equalisation. It was noted that schemes which have previously accepted transfers-in of GMPs are being advised to hold off making any equalisation decisions until a subsequent hearing on the Lloyds Bank case is heard.
Miss Foster informed the Trustees that she is currently liaising with GAD and Deloitte to establish whether any adjustments were required to the six scheme members’ pensions.
16. COMMON AND CONDITIONAL DATA REPORT
It was noted that Mr Burns (Deloitte) had provided training at a previous meeting on The Pensions Regulator’s requirements on record keeping and common and conditional data. Miss Foster confirmed that Deloitte have provided an extract of the data they hold on record in respect of the Scheme, for the Pensions Team to review, fill in any gaps and provide up to date information. Miss Foster said that the Pensions Team continue to work through the data extract.
17. CONTRIBUTION TOP UP PAYMENTS
Miss Foster talked the Trustees through the legal advice received from Eversheds in relation to the top up contributions paid from the Consolidated Fund in respect of notional employee contributions during the period that Members were on reduced salaries. Miss Foster noted that the legal advice concluded that the top up contributions paid in respect of notional employee contributions could be treated as notional employee contributions for pension administration purposes, and therefore could be refunded in respect of qualifying short service or on death in line with the Scheme’s Articles.
Miss Foster added that this view was consistent with the Assembly Commission’s intention and it was how the notional employee contributions had been recorded in the Trustees’ Annual Report & Accounts, however noted that details of the notional employee contributions had not been provided to Deloitte.
18. DEATH OVERPAYMENTS
Miss Foster informed the Trustees that two overpayments in pension had occurred beyond two scheme members’ dates of deaths. In the absence of an overpayment policy, Miss Foster confirmed that she had sought legal advice on the options available to the Trustees. The Trustees discussed the options outlined in the advice from Eversheds.
Mr Muir noted that the overpayments occurred in January and February, which was quite some time ago. Mr Wells also noted the costs associated with attempting to reclaim the overpayments. Miss Foster said that she did not have the exact overpayment amounts to hand, however confirmed that she would follow up with the Trustees by email. Miss Foster added that a decision on the overpayments is needed for the scheme accounts. Miss Foster said that she would include a draft overpayment policy for the Trustees to consider at the next meeting.
Action required:
- Draft overpayment policy to be included in the pack for the next meeting (Pensions Team)
Mr Beggs left the meeting
19. TRANSITIONAL PROTECTION (MCCLOUD JUDGEMENT)
Mr Mistry summarised that in 2018 the Court of Appeal ruled that the transitional protection provisions in the government’s 2015 public service pension reforms were discriminatory. This ruling is commonly known as the McCloud judgment and the government is currently consulting on options to remedy this.
Mr Mistry advised that GAD will be holding a Parliamentary event which would cover the McCloud Judgement in more detail and invited the Trustees to attend.
20. ANY OTHER BUSINESS
No other business was raised.
21. DATE OF NEXT MEETING
It was agreed that the next meeting would be held on 17 September at 1.30pm.
The Chairperson thanked everyone for attending the meeting today.
The Trustees’ meeting ended at 4pm.
