Minutes of Proceedings

84^th Meeting of the NIAMPS Trustee Board

Thursday 4 February 2021 at 9:30am, via Microsoft Teams

1. APOLOGIES

None.

2. MINUTES OF PREVIOUS TRUSTEE MEETING

The Trustees agreed the minutes of the Meeting held on 5 November 2020.

Action: Minutes would be uploaded to the Assembly website (Pensions Team).

3. CONFLICTS OF INTEREST

The Chair advised the Trustees that he is a member of the AVC arrangement with Clerical Medical.

Further conflicts were noted during discussion of ill-health retirement, and the McCloud judgement and these are noted under the relevant agenda items.

11. UPDATE ILL HEALTH RETIREMENT – FACTORS

(Agenda item 11 taken out of order)

This matter was discussed in the specific context of a case related to a long-standing member of the Assembly, who was seriously unwell, and the Chair stated that he wished to deal with this matter as a priority, therefore, moving it up the agenda to be discussed first.

Dr Archibald declared an interest in relation to this matter.

Mrs McClintock advised that the Member had not yet submitted an application for serious ill-health benefits and, therefore, at this time the Trustees did not have an application to consider. However, in the best interests of the Member, an indicative pension benefit calculation had been prepared by Deloitte, based on actuarial factors that were recommended by GAD. Mr Mistry (GAD) stated that the actuarial factors were based on the most recently completed Actuarial Valuation (2017), and the approach taken was consistent another recent case.

The Chair stated that Trustees were not in a position to challenge the GAD recommendations, but it was reassuring that the approach being taken was consistent.

Noted: The Trustees agreed that the GAD recommended actuarial factors should be used for the calculation of benefits in this case.

It was outlined that in order to progress this matter the Member was required to submit an application for serious ill health retirement, along with appropriate medical evidence. The Member would then receive the details of their pension benefit entitlement, and be provided with the paperwork to progress with the application.

If completed paperwork was received, then the Trustees will be required to assess the information provided and determine whether to grant serious ill health retirement benefits to the Member.

Action: Remain in touch with the Member regarding their intention to submit an application for serious ill-health retirement benefits, and communicate updates to the Trustees (Pensions Office).

Noted: The Trustees agreed that it was not necessary to wait until the next Trustee Meeting in April/May in order to consider a serious ill-health application. Instead, the details of the application and supporting evidence could be password protected and distributed by email from the Pension Office to the Trustees, who could then assess the evidence and communicate a decision by return email (Pension Office, Trustees).

4. REVIEW OF ACTION POINTS ARISING FROM MEETINGS

Member Annual Benefit Statements had been sent by registered post on 3 February 2021, and this action could be closed.

In relation to the Brewster judgement, it was reported that not all members had provided an Expression of Wishes Form – representing a gap in some member records.

Action: Members would be sent an Expression of Wishes Form, along with a reminder of the importance of regularly updating this information (Pension Office).

All other matters arising would be covered as main agenda items.

5. REVIEW OF RISK REGISTER

The Trustees confirmed that no changes were required at this time.

Ms Archibald left the Meeting at this point.

6. GAD REVIEW OF INVESTMENT PERFORMANCE

Mr Maclaren presented a summary of the Scheme's investment performance for the quarter to 30 September 2020. He noted that global markets generally had continued a recovery following falls in previous quarters related to the impact of COVID-19. However, UK and Emerging Market equities had negative returns during the period, although NIAMPS exposure to the later was small.

The Chair expressed concern that the table of asset performance against benchmarks over the quarter and, indeed, over one year and three year periods, was predominantly red (adverse).

Mr Maclaren acknowledged this point, but noted that in most cases the under-performance against benchmark was marginal and that cumulative returns over a three year period were positive.

7. M&G UPDATE

The detailed M&G reports had been summarised in the GAD review (agenda item 6), and these were not considered further.

8. TENDER FOR INVESTMENT MANAGER SERVICES

Mrs McClintock advised the Trustees that the position on how to proceed with this procurement was somewhat unclear. Recent legal advice appeared to reach a different conclusion than that provided previously and, therefore, further work was required to determine how to proceed.

The pertinent points that were required to be determined were: "Is NIAMPS a contracting authority for the purposes of the Public Contract Regulations (PCR)?"; "Would investment management services fall within a PCR exemption for financial services?"; and, "Who would support the necessary procurement approach?".

Mrs McClintock advised that she had sought input from colleagues in other devolved Assemblies, but had not yet received a response.

Noted: The Trustees agreed that the least risky approach would be to follow the recommendations of the recent legal advice. However, the recent legal advice could have implications on the award of other services to NIAMPS. Therefore, this may need to be revisited in future taking account of responses from other devolved assemblies and any other available information.

Action: Mrs McClintock to further engage with Deloitte and with the Assembly's Procurement Office to agree how best to follow the recent legal advice (Pensions Team, Deloitte, Procurement Office).

Action: Communicate with M&G to avail of a six-month contract extension to 30 November 2021 (Pension Office).

9. ACTUARIAL TRIENNIAL VALUATION

The Chair thanked Ms Bell for the video she had provided which was helpful in explaining the Valuation process.

Ms Bell proceeded to outline the timetable and required actions for the Valuation. She outlined that the investment data had been obtained by GAD, and that the member data had been provided by the Pension Office. The member data was currently being processed, and verifying this data was the focus of current activity. The next stage was for GAD to provide the Trustees with the proposed valuation assumptions and the provisional funding results, and Ms Bell noted that she expected this information to be issued by GAD at the end of April 2021. The timetable indicated completion of the Valuation process by 31 August 2021.

The Chair enquired what impact the McCloud judgment would have on the Valuation.

Mr Beggs declared that his pension benefits would be impacted by McCloud, and he would not take part in discussions on this topic.

Ms Bell stated that she would not be discussing McCloud in any detail, except to outline that GAD would include a proposal and an estimate of the impact when determining the Valuation results, which would allow further discussion on this matter at the next Meeting. She continued, the Northern Ireland government pension schemes were not legally obliged to adopt the McCloud remedy determined by HM Treasury. Rather, the remedy to be applied in Northern Ireland would be a matter for the Independent Financial Review Panel to consider once it is back to being operational. Therefore, GAD would be directed by the Panel on the McCloud remedy to be adopted, although this would not necessarily be required before completing the Valuation.

Action: The scheduling of the next Trustee Meeting will be coordinated with GAD in order to allow Trustee input to the funding objectives and assumptions, along with consideration of the initial Valuation results (Pension Office).

10. TRANSITIONAL PROTECTION (McCLOUD JUDGEMENT)

The Chair noted that this matter had been discussed in the previous agenda item, and outlined that this would continue to be a prominent topic of discussion over the coming months.

12. COMMON AND CONDITIONAL DATA REPORT

Mrs McClintock advised that the Pension Office had undertaken considerable work in assessing the member data, and that this had been challenging due to changes in payroll systems and changes in staff.

Nothwithstanding the difficulties, it had been encouraging to receive positive feedback from GAD on the data which had been submitted for valution purposes, and there was a high level of confidence around the data that had been required in order to prepare the member benefit statements which were issued recently.

Action: There is further work to validate historic data, and this will be supported by a new member of the Finance Office team (Pension Office).

When the data validation work is completed, the information will be transferred and maintained on Deloitte's pension administration system.

13. REVIEW EVERSHEDS CONTRACT

The Chair advised Trustees that the Scheme had been receiving legal advice from Eversheds for a long time. The current contract period was due to expire in 18 months time. He continued that it was useful to bring this item to the agenda in good time, and it should be revisited later in the year once a decision on future contracting arrangements had been agreed (agenda item 8).

14. TRUSTEE SELF ASSESSMENT

Mrs McClintock advised that this exercise had been undertaken a number of years ago, and involved Trustees completing a self-assessment of their engagement with the role.

Noted: It was agreed that as a number of Trustees are new to the role, it was sensible to allow a period of involvement on the Trustee Board before seeking to complete a self-assessment. This matter to be re-visited in 12 months.

15. FINAL 2019/20 REPORT TO THOSE CHARGED WITH GOVERNANCE

Noted: The audit of the 2019-20 NIAMPS financial statements has been completed, and the auditor had issued an unqualified report without any required modifications.

16. DATE OF NEXT MEETING

Meeting to take place at end of April or beginning on May, to be agreed following consultation with GAD to coordinate with Valuation processes. It was noted that the a Thursday morning meeting suited attendees.

Action: Liaise with GAD to confirm next meeting date (Pension Office).

17. ANY OTHER BUSINESS

The Chair asked for confirmation from Trustees that they had received all necessary information during the course of the Meeting to allow them to take rational and justified decisions.

Noted: Mr Catney, Mr Muir and Mr Beggs confirmed that they had heard all the information they required.