Agenda item

6.1       SK outlined that the report covers a number of items and updates relating to the Governance of the East Sussex Pension Fund (The Fund or ESPF).

Internal Dispute Resolution Procedure (IDRP)

6.2       The report outlines a proposed change to the wording of the Internal Dispute Resolution Procedure (IDRP) to bring it in line with the wording used in the Pensions Act 1995.  The Chair asked how members of the Fund access the IDRP. SK explained that the IDRP is on the website where the policy and the forms to complete can be found. A reference to the IDRP is also made in all documents and correspondence to explain how complaints can be made. The Board agreed to note the change in wording of the IDRP.

Risk Management Policy

6.3       SK outlined that this is a new policy that was developed as a consequence of the review of the risk register. The Chair noted that the new draft consolidated Code of Practice from the Pensions Regulator had followed many governance requirements of the European Union Pension directive, and will as drafted require the Fund to have a risk officer. SK responded that if this is a requirement of the Ministry of Housing, Communities and Local Government (MHCLG) statutory guidance then the Fund will act accordingly. It was clarified that the Pension Committee is the owner of the Risk Management Policy and it is on the agenda of the Pension Committee for it to approve the Policy. The Pension Board had no comments on the Risk Management Policy and agreed to note the Policy.

Regulatory Change

6.4       The Pensions Regulator (TPR) has launched a consultation on proposed changes to combine the codes of practice for private and public pension schemes into a single code. Due to the short timescales for a response the Chair has responded to the consultation on behalf of the Board. The consultation response is contained in appendix 3 of the report. It covers the introduction of new terms (such as ‘Governing Body’) which may be confusing, and the response recommends keeping separate codes of practice for public and private schemes.

6.5       Lynda Walker (LW) asked why the consultation was done at such speed and whether there were any significant changes. The Chair commented that TPR saw this as a consolidation of existing codes and had only held a limited consultation with the pension industry. The Chair’s view is that this was a more fundamental change and hopefully TPR would reconsider. LW commented that she would bring the proposed changes to the attention of the other forums that she is involved with. The Board agreed to note the potential change in TPR expectations.

Financial Hardship Policy

6.6       At present the Fund receives requests to waive fees for financial hardship reasons in respect of requests for information the Fund does not have to provided free of charge. These mainly relate to requests for pension valuations in the case of members divorcing, and the subsequent work involved in Pension Sharing Orders, and second in providing more than one Cash Equivalent Transfer Value for deferred members within a twelve-month period. The new policy would provide officers with a way of responding to these requests to waive fees due to financial hardship. It was clarified that the level of fees has been compared with other Local Government Pension Scheme (LGPS) pension funds.

6.7       Diana Pogson (DP) commented that there was no reference to the charges on the website or the schedule of fees charged. SK responded that the pricing schedule is provided at the point the request is made, but details can be published on the website.  DP added that the requirement for 6 months bank statements is quite onerous and perhaps the policy should be amended to say up to 6 months banks statements may be required.  SK responded that this could be looked at but is based on similar requirements that the Benefits Team uses when considering financial hardship. LW commented that it was good to have a Hardship Policy and supported the introduction of one. The unions also provide hardship support, and it may be helpful to signpost this service to members and their families who may be experiencing financial difficulties. The Board had no further comments and agreed to note the new approach to requests to waive fees in the case of financial hardship.

Governance and Compliance Statement.

6.8       SK outlined that the Governance and Compliance Statement has been updated and refreshed to reflect the work undertaken on governance over the last 18 months. This also links to the requirement for the Pension Board to produce an annual report which is outline elsewhere in the report. The Statement will be reviewed annually and will be updated in line with any changes recommended by the Scheme Advisory Board (SAB). It was clarified that the Governance and Compliance Statement is a public document and will be part of the of accounts and published on the web site. The Chair commented that the chart on the ACCESS pool governance arrangements needs to be revised and simplified. SK agreed to revise the chart when the statement is next reviewed. The Board agreed to note the revised Governance and Compliance Statement.

Annual Report of the Pension Board

6.9       The Board noted the need to produce an annual report and agreed that the Chair will work with officers to draft a report for agreement by the Board at the September Pension Board meeting.

McCloud Working Group

6.10     The Board discussed the McCloud Working Group update. The Working Group has met and the templates requesting data from employers are ready to be sent out. A reference to the McCloud judgement will be included in the Annual Benefits Statement (ABS). The Chair asked if there were likely to be any negative impacts on members of the Fund. SK commented that the team is not aware of any negative impacts on members. Members will be given the greater of the Final Salary or CARE benefits at retirement where this is applicable. The Pension Board noted the update.

Good Governance Project Update

6.11     The Board noted the update on the Scheme Advisory Board (SAB) Good Governance Project. The SAB published its phase 3 report in February and is now liaising with MHCLG to incorporate the changes into the statutory guidance. The Fund will review these changes once they are made to ensure that they are consistent with the governance arrangements the Fund has implemented.

Additional Voluntary Contributions (AVCs)

6.12     SK reported that there have been a number of administrative issues with the performance of the current AVC provider, Prudential, which the Fund has been addressing. The main complaints have been about poor service including long response times for telephone and other enquiries. This has been due to a change in service provider by Prudential who have assured the Pensions Team that this is being addressed. This will be raised with the Pension Committee. The Committee will also be asked to agree that officers carry out a review of the AVC scheme provider once Prudential have had time to address the current service issues. The Chair asked if the Fund has to choose from a shortlist of providers. SK responded that although there are currently three main LGPS AVC providers in the market, the market is changing, and the Fund is not constrained by the SAB in which providers it can include in any tender exercise.

The Board RESOLVED to:

1)         Note a change in the wording of the Internal Dispute Resolution Policy

2)         Note the new Risk Management policy

3)         Note the potential change in The Pension Regulator (TPR) expectations

4)         Note new approach to requests for fees to be waived due to financial hardship

5)         Note the revised Governance and Compliance Statement

6)         Approve the drafting of an annual report of the Pension Board to be considered at the next Pension Board meeting.

7)         Note the update on the McCloud Working Group

8)         Note developments on the SAB Good Governance project

9)         Note the update on AVC’s