Agenda item

Governance Report


44.1     The Board considered a report providing an update on various governance workstreams completed and changes affecting LGPS and the ESPF. 

Additional Pension Contributions

44.2     Michael Burton (MB) highlighted to the Board that the policy on Additional Pension Contributions (APCs) was being updated to ensure there is clarity around the Fund’s right to refuse an application on ill health grounds.

44.3     MB added that it was necessary to assess a member’s health before they are allowed to pay APCs as should they die before retirement there  is an increased dependents’ pension  which could result in a large liability to the Fund which will not have been covered by the contributions made by the member.

44.4     MB further updated the Board that members will be required to fill out a form providing health status and where concerns are identified, a medical report will be requested.   APC purchase will not be approved to those identified with a length of life impacting ill health condition.

Membership of the Pension Board


44.5     MB provided an update on the appointment of Tim Oliver from University of Brighton to the Board replacing Stephen Osborn.  Tim joins the Board for a 4-year term as an employer representative.


44.6     MB further updated that Nicoletta Palermo’s term has ended.  Nicoletta’s was a member representative put forward by GMB Union.  This position remains vacant; however, recruitment is ongoing, and a recommendation will be made to the Governance Committee in July’s meeting to make an appointment. RM commented that it would be sensible to advise the preferred candidate that they are being nominated to make sure they still wanted to take the role following the recruitment process,


44.7     Cllrs Druitt and Illingworth have stood down following recent elections leaving two employer representative vacancies.  Brighton and Hove City Council (BHCC) and the District and Boroughs have been requested to submit nominations.


44.8     RM commented that some responses received from the the recent Policy Consultation on the employer side indicated sound pension knowledge and it may be worth considering approaching those people as potential candidates.


Policy Consultations


44.9     MB highlighted to the Board that there were no major concerns arising from responses received and that the suggested wording will be taken forward to the next Pension Committee meeting on 16 June 2023.

44.10   Neil Simpson (NS) asked with regards to the Cessation methodology if it was normal practice for an acting scheme employer to act as guarantor for those bodies.

44.11   SK responded that with passthrough admission agreements its normal for the scheme employer to guarantee, however this is dependant on the covenant of the employer and bonds are still required in some situations. Recent change in the guidance from Department of Education now allows academies to act as guarantors to cover Contractors. 

44.12   RM asked for a further explanation around Prudence Level as it was not clear.

44.13   SK responded that this was an area covered by the consultation and agreed further clarity is required.  SK suggested that an appendix could be added at the back of the Funding Strategy Statement for further guidance to employers.

44.14   NS asked for consideration to be made regarding formalising the Board’s minutes at the Pensions Committee meeting.  Currently they are just noted by the Committee without a formal discussion. 

44.15   SK confirmed that any changes or minor adaptions made by the Board are included in reports for the Committee as an update from the Board.

44.16   Cllr Gerard Fox (GF) added that RM is also invited to comment or express a view on behalf of the Board.  It is more relevant for RM to articulate on items that the Board has expressed a concern for the Committee to focus on.

44.17   The Board agreed that NS’s suggestion was valid, and they will continue to explore how best to add more input from Board meetings in Committee meetings.

44.18   NS asked with regard to section 10.3 of the report, what happens if someone chooses to take a gap at the age of 16 or 18 prior to starting a further education full time course.

44.19   SK responded that this will be treated as a gap year, however this will  be confirmed in the policy.

44.20   NS commented on a point in appendix 5 which states that the Board considers all reports taken to Committee other than investment papers, however, page 69 under objectives and roles it states that the Board covers all aspects of Governance of LGPS including funding and investments, therefore, clarity is required as to how this objective is met by the Board as the Board does not have sight of the investments papers.

44.21   RM responded that the detailed investment report on investments managers performance and strategy sits with the Committee and the Board is responsible for the governance structure and not details of the investments.  RM recommended that the wording is looked at to make it clearer.

44.22   SK also added that the team is open to suggestions on how best to provide comfort on the governance of the investment arrangements, however it is not for the Board to understand investment strategy and how managers are performing, the Board should be comfortable with the structure in which decisions are made in line with regulations.

44.23   NS commented there that appears to be a disparity between the role of the Board and the role of the Committee in terms of governance arrangements.

44.24   SK suggested that minutes from the last Committee meeting are included in the Board’s agenda as a section in the Governance paper summarising discussions and decisions from the Committee meeting on investment matters.

44.25   NS asked to be provided with context regarding the consultation responses in appendix 6 around increase in workload burden on the employer from i-Connect implementation.

44.26   Paula Jenner (PJ) responded that this refers to the previous LGPS forms which will eventually be phased out, however, for now there are certain elements that the i-Connect system cannot provide which means that the LGPS forms needs to continue to be provided as well as the i-Connect submission within the required timeframe.

44.27   The Board RESOLVED to:

1) Note the report and its appendices;

2) Ask Officers to consider adding an appendix around Prudence Level to the FSS;

3) Ask Officers to review wording with regard to section 10.3 to deal with gap years before a further education course begins;

4) Request that in future a summary of Committee minutes be included in the Board’s agenda.


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