Minutes of Proceedings

Meeting of the NIAMPS Trustee Board held in Room 401 on Tuesday 7 March 2023 at 12:45pm

Present:

• Dr C Archibald (Chair)
• Dr S Aiken OBE
• Mr K Buchanan
• Mr S Dickson
• Mr M Durkan

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

1. STANDARD BUSINESS

1.1 Changes to the Board of Pension Trustees

It was noted that Dr Aiken, Mr Buchanan and Mr Durkan were appointed as Trustees of the Scheme by exercise of their statutory powers under the Trustees Act 1958.

Following Mr Wells’ resignation, the Trustees acknowledged the need to appoint a new Chairperson. Mr Dickson nominated Dr Archibald to replace Mr Wells as Chairperson of the Board of Pension Trustees. The Trustees unanimously supported Dr Archibald’s nomination and Dr Archibald was appointed as Chairperson with immediate effect.

1.2 Apologies

There were no apologies

1.3 Conflicts of interest

Mr Aiken noted that he is a Director of Christian Aid Ireland and a former Chief Executive of an organisation in dispute with Deloitte.

1.4 Minutes of the Meetings on 22 September 2022 and 21 October 2022

Approved.

Action: Dr Aiken requested that the newly appointed Trustees would be formally ratified when normal business returns at The Northern Ireland Assembly.

1.5 Matters arising

None

2. CONSENT ITEMS

2.1 None

3. KEY REPORTS FOR DISCUSSION

3.1 Scheme accounts

Mrs McClintock advised that the Report and Financial Statements (the ‘Accounts’) had been audited by the Northern Ireland Audit Office (NIAO).

Following the audit, the Accounts would be circulated to the Trustees and would then be provided to the Comptroller and Auditor General for Certification (C&AG) and to the Assembly Commission.

The NIAO will be providing a report on the Accounts that will be discussed at the next Trustees’ meeting.

Agreed: that the Trustees would email Mrs McClintock with any queries relating to the Accounts by the end of the day on Thursday 9 March. It was further agreed that in the absence of any queries being received by Mrs McClintock, the Accounts should be considered as approved by the Trustees and should be submitted to the C&AG and the Assembly Commission.

Action: Mrs McClintock to submit the Accounts to the C&AG and the Assembly Commission.

3.2 Actuarial - Key milestones and valuation planning

Mr Pekacar and Mr Ward outlined the key milestones for the Scheme in the forthcoming period including:

The next Actuarial Valuation (the ‘valuation’) is due as at 31 March 2023. The valuation process will take 12-15 months to complete, and it is expected that initial results would be available around September / October 2023 and the final results around December 2023. The Trustees may wish to review the actuarial factors following completion of the valuation.

The transfer of assets from M&G to Abrdn is expected to complete in quarter two of 2023. Following the transfer, the Trustees should then review their investment strategy and identify their objectives and any constraints around how those are achieved.

The Scheme is impacted by the McCloud judgement and consideration will be required for the remedy to be provided to affected members. The decision as to what the remedy will be rests with the Independent Financial Review Panel. An estimated allowance has been included in the 2020 valuation to cover the remedy. The Scheme is also impacted by the Brewster judgement.

Action: Mrs McClintock to include information on the Brewster judgement for discussion at the next Trustee meeting.

3.3 Investment

3.3.1 Fund Performance – 2022 Q4

Mr Ward reported that over the fourth quarter of 2022, the overall portfolio returned 0.6%. This was primarily driven by strong returns across most equity funds, with strongest growth seen in the UK and Europe. In the last year the return was -0.4% and in the last three years the return was -0.5%.

3.3.2 Investment strategy changes

3.3.2.1 Abrdn fund advice

Mr Ward explained the background to the decision by the previous Board of Trustees to initiate a process to review their Investment Manager which, following a selection process for a replacement Investment Manager, led to the appointment of Abrdn to replace the incumbent, M&G. Mr Ward confirmed that the advice he provided during the process remained accurate.

Agreed: The Trustees agreed to ratify the decision taken by the previous Trustees and instructed Mr Ward to proceed with the transfer.

3.3.2.2 Draft Statement of Investment Principles

Mr Ward explained that whilst the Scheme is statutorily exempt from preparing and maintaining a Statement of Investment Principles (‘SIP’), the Scheme has a SIP in place for reasons of best practice and good governance.

Agreed: The Trustees agreed that following approval of the SIP, they would pass it to the Assembly Commission for opinion before making it available to all members via the website.

3.3.2.3 Implementation timeline

Mr Ward explained the key stages of the asset transfer from M&G to Abrdn.

1. (April 2023) GAD to prepare an Asset Transfer Plan and documentation for signing.
2. (May to early June 2023) Trades to be spread over 6 dealing dates to mitigate “out of market” risk. Trades 1 to 5 to be one week apart with two weeks between trades 5 & 6.
3. (August 2023) GAD to issue a post transfer report.
4. (Quarter 4 2023) GAD to update quarterly investment reporting to complement Abrdn’s reporting.

3.3.2.4 M&G Fund Changes

Mr Ward updated the Trustees on changes that M&G are making to some passive funds in the range that will affect where, and how, funds are invested. The changes are happening as M&G have taken the decision to stop managing the underlying investments for these funds. They will be moving to new underlying investments manged by Blackrock in the period between 31 March 2023 and 30 June 2023. The new underlying investments will adhere to M&G’s environmental, social and governance Asset Owner policy.

3.4 Administration

3.4.1 Deloitte transition to Isio

Mr Burns informed the Trustees that Deloitte has agreed to sell its pension advisory business, Deloitte Total Reward and Benefits (‘DTRB’), to Isio, with the transaction expected to complete in late May 2023. All employees of DTRB will automatically transfer so the current engagement team will remain in place and will continue to service the Scheme. DTRB will write to all members to confirm new contact details in advance of the switch.

Action: Mr Burns to write to the Trustees to confirm the transfer to Isio.

3.4.2 Outsourcing of additional services

Mrs McClintock updated the Trustees on the ongoing resourcing issues and advised that Deloitte had been asked to provide a proposal on the additional pension services that can be offered to support the Trustees.

Action: The Trustees agreed to consult with their party colleagues on the Assembly Commission before proceeding.

4. OTHER ITEMS

4.1 Annual Pensioner Declaration

Mr Burns advised that this was an annual exercise to verify the details of Scheme pensioners. The exercise was used for the Trustees to protect the fund against the overpayment of benefits or fraud.

Mr Burns noted that there were 8 individuals who had not yet responded to requests for confirmation of details, and in such a circumstance it would be normal to suspend pension payments to these members. This would be on a temporary basis subject to the individual making contact and providing the required details.

Agreed: by the Trustees that they have a duty to protect the Scheme and that one further letter should be issued to the 8 individuals and if there was still no response then pension payments should be stopped on a temporary basis initially.

5. DATE OF FUTURE MEETINGS

The next NIAMPS Trustee meeting is scheduled for 7 June 2023, subject to availability of the Trustees and Assembly staff.