Issue - meetings

6.1       The Board considered a report on the Draft Pension Fund Annual Report 2016/17.

6.2       OO confirmed that there had been three employers that submitted late pension contributions on 31 March 2017, and the total late payment amount was around £8,000. He added that none of the three were in arrears, nor had they submitted late payments in the past.

6.3       The Chair noted that although there has been a reduction in fees paid to investment managers from a forecast of £8.8m to an actual outturn of £7.7m, the addition of fees deducted from source meant the overall amount paid to investment managers for 2016/17 had increased slightly. He also noted that it was not possible to give a forecast for fees deducted from source for 2017/18.

6.4       BR asked for a breakdown of the reasons for the 26 outstanding pension overpayments during 2016/17, which was a significantly higher amount than for 2015/16. Jason Bailey (JB), Pension Services Manager, explained that he suspected they were due to late notification of the death of a pensioner, which can result in difficulties in recovering money from the next of kin. JB said that Orbis was in discussions to use a mortality screener that would allow officers to scan the pension fund membership against the death register (GRI); this would be a free service. He clarified that there had been no change to the Pension Administration Team’s procedure for paying pensioners, so the increase would not be due to procedural reasons.

6.5       Sue McHugh (SM), Employer representative, asked why there appeared to be a greater number of complaints against the East Sussex Pension Fund (ESPF) listed than had been reported to the Pension Board as part of its Key Performance Indicators (KPIs) update. JB explained that the true number of complaints was five or six (as reported to the Board) but the figure of 32 published in the Annual Report included negative feedback from a recent survey.

6.6       The Chair recommended that the ‘Administrative Management Performance’ section include some context to explain that the administration targets were changed to more appropriate targets in 2016, and that they are monitored on a quarterly basis by the Pension Board and Pension Committee.

Note – following the Board meeting,Brian Smith provided the Accounts and Pensions team with a revised KPI report to be included within the draft 2016/17 Pension Fund Annual Report, which negate the need for additional commentary.

6.7       The Board RESOLVED to:

1) note the report;

2) request a breakdown of the outstanding pension payments to be circulated to the Board by email; and

3) request a report for a future Board meeting on the results of the ESPF customer survey.

11.1     The Committee considered a report by the Chief Operating Officer on the East Sussex Pension Fund’s draft 2015/16 Annual Report.

11.2     The Committee resolved to note the East Sussex Pension Fund’s draft 2015/16 Annual Report.

5.1       This item was introduced by Ola Owolabi (OO).

5.2       OO explained that the external auditors had asked this year for the Pension Fund Annual Report to include the fees paid to an investment manager every time they make a transaction, in addition to their annual management fees. For this reason, it appeared that management fees had increased by over £3m. OO assured the Board that there had been little to no increase in management fees and officers were in discussions with the external auditors to allow them to provide a similar breakdown for last year’s fee, but this was complicated by the fact that the 2014/15 account has already been signed off – a note would also be added to the accounts to explain the discrepancy. John Shepherd (JS) added that officers welcomed this additional transparency.

5.3       MK explained that management fees can be higher if, as in the ESPF, the administrating authority had selected some boutique managers who were expected to either provide significant returns for the fund or, in the case of Newton, protect it during times of market volatility.

5.4       The Chair asked whether the fact that a few employers in the scheme had made late contributions was a cause for concern. MK said that there were no concerns.

5.5       AE asked why the number of scheme members appeared to fluctuate from month to month. OO explained that this was due to other admission bodies leaving and joining the scheme, for example, contractors, the figure has generally increased overall as more services are contracted out by local authorities and more schools become academies. Other employers may leave the scheme as they no longer have any scheme members receiving a pension. JB added that academies were separate employers and as more schools became academies, the number of employers would increase.

5.6       The Board RESOLVED to note this report.