Issue - meetings

5.1.        The Board considered a report on the structure of the Pension Committee and comments on governance of the East Sussex Pension Fund (ESPF or the Fund).

5.2.        Ian Gutsell (IG), the Chief Finance Officer presented the report and noted a report from Councillor Tom Druitt (TD) calling on East Sussex County Council to consider representation from Brighton and Hove City Council (B&HCC) on the Pension Committee and a petition received titled ““Stop investing Brighton & Hove’s pension fund in fossil fuels”.

5.3.        Sarah Hazelhurst (SH) as the Lead Petitioner, spoke about the Pension Scheme investing in fossil fuels and the importance for institutions to act in response to the climate emergency. SH noted that when collecting signatures for the petition, the public were surprised to learn that there are no B&HCC elected members on the Pension Committee.

5.4.        TD called on the Board to request a review of the governance arrangements of the ESPF, noting that the duty of the Board is to assist the scheme members and to consider whether the Pension Committee is taking decisions in line with the legal requirements of a scheme manager of a Local Government Pension Scheme (LGPS). TD expressed concerns around climate change and the effect on eco systems and biodiversity. TD emphasised the importance of not exceeding 1.5 degree global temperature increase which is predicted to occur in 2025 if greenhouse gas emissions continue to be produced at the current rate. As B&HCC and East Sussex County Council (ESCC) had declared a climate emergency, and because fossil fuels fuel global warming,. TD said that B&HCC did not believe the Fund was fulfilling its fiduciary duty to its members. He argued that there was a need for B&HCC representation on the Pension Committee. as B&HCC fell outside the geographical area of East Sussex and so its residents did not currently have elected representation on the Pension Committee.

5.5.        Councillor Toby Illingworth (TI) noted that the legislation clearly states who can sit on the Pension Committee and conversations around divestment should occur at the Pension Committee not the Pension Board, since Pension Board is not able to make financial decisions regarding the ESPF.

5.6.        Neil Simpson (NS) noted that although the legislation states that only the administering authority (ESCC) can sit on the Pension Committee, there has been considerable reorganisation of local government at the time that B&HCC separated from ESCC. NS noted that this reorganisation has resulted in a lack of democratic representation for a substantial part of the fund membership who did not live in the East Sussex area. NS gave examples of other authorities who have co-opted representation on their Pension Committees who are not members of the administering authority, such as the West Midlands Pension Fund. He also suggested that the Pension Committee may not be a “finance committee” as set out in S.102 of the Local Government Act 1972, as it is not making decisions on the financial affairs of the local  ...  view the full minutes text for item 5