Issue - meetings

Including ACCESS Pool Inter Authority Agreement, Operator agreement amendments, Conflict of Interest policy, Ill Health Management policy, McCloud Working Group update, Employer Forum agenda, GMP indexation consultation

46.1.      The Board considered a report providing an update on various governance and employer engagement work completed and changes affecting Local Government Pension Scheme (LGPS) generally and the ESPF in particular.

46.2.      The Chair asked whether the four new investment managers identified to manage the assets taken out of the passive equity fund would be part of the ACCESS pool.

46.3.      SK confirmed they are outside of ACCESS because there are no Environmental, Social and Governance (ESG) focussed sub-funds within ACCESS to invest in. The Fund will write to Ministry of Housing Communities and Local Government (MHCLG) advising them of this fact but noting the intention to move them back into ACCESS when a suitable sub-fund is available.

46.4.      The Chair asked how the Conflict of Interest Policy applied to Members of the Board.

46.5.      SK explained that the Policy described existing codes of conduct within the East Sussex County Council constitution rather than make any changes. The terms of reference of the Board states that the code of conduct for elected members of the Council applies to the Board Members. This includes the requirement to fill out a register of interests that is updated annually (even if with a nil return).

46.6.      Councillor Tom Druitt (TD) asked how the Board would know if they had any personal interests relating to the companies the ESPF invests in.

46.7.      SK said that a list of the investment managers and the companies that they invest in on behalf of the Council could be provided to Board members. 

46.8.      The Chair clarified that the Board has no control over who the Fund invests in, as this is done via investment managers, so it is unlikely Members would have a personal interest and it would almost certainly not be considered a prejudicial interest.

46.9.      With regard to the ill-health insurance proposal, SO said he was concerned that providing employers in Group 2 the option to opt-out may encourage them to do so for the incremental saving they would make in not paying the ill health insurance premium, but in doing so would expose them and the rest of the Fund to substantial risk in the event of an ill health claim.  He said it is vital that the administering authority communicates to employers the importance of signing up to ill health insurance.

46.10.   Rory McInroy (RM) clarified that the employers would not pay an additional amount for the ill health insurance compared to what they do now, as it would be around 1% of their own contribution rate and replace the current 1% per annum of employer contributions they pay towards the pooled ill health fund.  He added that it was a very complex area that employers are not clear about, which is why smaller employers will be compelled to pay it. Hymans Robertson will also assist with the communications plan.

46.11.   SO asked why have the option for any employers to opt-out if an ill health payment was such a high risk issue.  ...  view the full minutes text for item 46