Minutes of Proceedings

Meeting of the NIAMPS Trustee Board held via MS Teams on Tuesday 3 October 2023 at 10:00am

Present:

• Dr C Archibald (Chair)
• Dr S Aiken OBE
• Mr S Dickson

In attendance: Mrs P McClintock (NIA), Mr N Burns (Scheme Secretary), Mr M Pekacar and Mr C Ward (GAD)

Mr Burns, Mr Pekacar & Mr Ward were not in attendance for item 4.4.2

1. STANDARD BUSINESS

1.1 Apologies

There were no apologies.

1.2 Conflicts of interest

There were no conflicts of interest.

1.3 Minutes of the Meeting on 7 March 2023

Approved.

1.4 Matters arising

None.

2. CONSENT ITEMS

2.1 None.

3. SCHEME GOVERNANCE

3.1 Risk Register

The Risk Register will be reviewed in detail at the next Trustee meeting.

Action: Mrs McClintock and Mr Burns to meet to review and update the Risk Register.

4. KEY REPORTS FOR DISCUSSION

4.1 Actuarial Valuation Assumptions

Mr Pekacar explained that the Rules of the Scheme require the Scheme Actuary to make a report on the general financial position of the Scheme at least every three years. The previous Actuarial Valuation related to the position of the Scheme as at 31 March 2020 and the Trustee Board would need to agree the assumptions to be adopted for the 31 March 2023 actuarial valuation of the Scheme.

The proposals set out for the valuation are as follows:

• Discount Rate – Increase the real discount rate by 0.75% p.a. to CPI + 3.0% p.a.
• Other financial assumptions – CPI inflation assumption 2.4% p.a. (increased by 0.4% p.a. from 2020). Salary increase assumption CPI + 1.5% p.a. (reduction of 0.25% p.a. from 2020).
• Mortality – Adopt similar assumptions to the 2020 valuation but update to the latest ONS mortality projections (ONS 2020).
• Other demographic assumptions – Maintain other demographic assumptions in line with 2020 valuation.

Agreed: The Trustees agreed to proceed based on the assumptions outlined by Mr Pekacar.

Action: The Secretariate team to provide membership data for the valuation to GAD. GAD to produce initial results based on the agreed assumptions, including some potential scenario analysis. Trustees to discuss initial results and GAD proposals for the Consolidated Fund contribution rate.

4.2 Investment

4.2.1 Quarterly Performance Review – 2023Q2

Mr Ward reported that Q2 investment returns were not good across the market, primarily due to inflation and changes to interest rates.

During Q2, M&G made several changes to the equity assets:

1. The Emerging markets equities fund was closed by M&G and the proceeds transferred to the Scheme bank account.
2. The remaining equity funds were transitioned to funds with the same regional exposure but tracking a different index and so with different composition.

Due to these changes dealing costs would have been incurred that would reduce relative performance, in addition to a change in index composition mid-quarter. It appears that this has had a significant impact on relative performance.

4.2.2 Update on transfer from M&G to Abrdn

At a previous Trustees meeting, it was agreed to change the Scheme’s Asset Manager from M&G to Abrdn. This decision was based on the Trustees’ preceding work that considered the performance of M&G, the selection of a new investment manager, consideration of investment strategy and funds and the asset transfer process.

On 24 May 2023, prior to the asset transfer commencing, the M&G PP Global Emerging Markets Fund closed. M&G did notify the Trustees in advance and the timing aligned with the expectation that a signification portion of the proceeds may be used towards a benefit payment. It was agreed that these funds of c£1.5m would remain in the bank account and any surplus would be invested with Abrdn in due course.

Mr Ward confirmed that, from 8 August 2023 to 14 September 2023, a total of £38,558,975.77 was divested from M&G and invested with Abrdn over six dealing dates. The total amount held with Abrdn as of 15 September 2023 was £39,230,477.74. The M&G accounts are now fully divested and M&G will close these accounts.

Action: Mr Ward will table the Statement of Investment Principles (SIP) at the next Trustee meeting. Following agreement with the Trustees, the SIP will be published.

Action: Abrdn will be invited to a Trustee meeting in 2024 to update the Trustees on the performance of their funds.

4.3 Scheme Accounts

This matter was deferred for discussion on 11 October 2023.

4.4 Administration

4.4.1 Update of Serious Ill Health Lump Sum

The Chair noted that special meetings of the Trustees had taken place on 19 July 2023 and 3 August 2023, and that the Trustees had approved Mr Hilditch’s application for serious ill-health retirement.

Mrs McClintock confirmed that the payment of the lump sum had been processed. 

4.4.2 Outsourcing of additional services

The Trustees discussed the options available and agreed that Mrs McClintock would circulate a further paper for consideration.

Action: Mrs McClintock to prepare a paper for consideration.

5. DATE OF FUTURE MEETINGS

The next NIAMPS Trustee meeting will be scheduled for January 2024. Mr Burns will liaise with the Trustees to agree a suitable date.