Transcript

who are members of the Lambeth Fund. There are other employers that contribute to the Lambeth Fund and it was one of those employers that obviously employers, it's their duty to send details of newcomers, new entrants in the scheme and unfortunately one of our employers sent incorrect details of a particular scheme member. So yes, details, a letter was sent to a person on the incorrect address but thankfully that individual was the colleague of the person it was incorrectly sent to so she gave the envelope unopened to the colleague but as a result of that we asked the employer to check all the addresses of the scheme members to make sure that they were correct and the same thing wouldn't happen which they did and they've confirmed that the addresses are all complete and correct. There's a thing that generally is not generally there about asking scheme members, in this case it's employer error but I know often a lot of these things employees are not very good about telling you when they move address and things like that. I'm just wondering about there must be a further risk that information will go astray but actually that's actually probably the employee's fault because they failed to notify you but is there any way that we can get those messages out to people about that? We often do and that's one of the things in the benefit statements for instance that we send out on the newsletters, the annual newsletters and any communication that we send out to members to say especially when they're leaving and we tell them what the deferred benefits are etc. We ask them to make sure that they let us know when they're moving on. Thankfully, especially for deferred beneficiaries in particular, you may have heard of the system called Tellus once where we can log on to this platform that provides details of a whole raft of things, people on benefits etc but obviously we won't have access to that but in terms of the pensions aspect we may be able to find out somebody's address through the Tellus world system. We've also got a contract with a supplier, an address tracing contract with the supplier so whereby if we do come up with a situation where we send out a benefit statement for instance to a deferred beneficiary or a newsletter to a pensioner and it's returned as address unknown then we engage the third party suppliers for an address tracing exercise and we're trying to do everything in our power to get the correct address because with the introduction of the pensions dashboards etc that's going to be a major influence on making sure that people know that they've got benefits still with with LAMP that needs to be reclaimed etc. Thank you Linda. Any more? Well it's just a follow-up, slightly separate but just on the annual benefit statement that's sent out to every current and deferred or annual statutory responsibility is it to send that out every year? Yes, so with annual benefit statements they're not sent out for active members, they're on the portal, they're on the LGPS member self-service portal so we send them letters or emails to say your benefit statements are now on the portal. So if it was incorrectly sent to somebody's wrong address etc they didn't provide us with the correct address or whatever, at least the person wouldn't see the actual details of the benefits. This was an active member and it was an introduction to the scheme because it was a new incumbent so it was welcome to the scheme, these are the forms you need to fill in, have you got any previous benefits? So it wasn't anything in a sense confidential data in that sense even though obviously sending it to the wrong address was the data breach. I have a question. This is regarding appendix one point number two, new status. What page? Yes, appendix one, page 23 that you're referring to? Appendix one, summary of three cases recorded. Yes, 23. My question is regarding new status. You know when the GLL, the letter centres that the council was operating, they have been now in-house almost a year and I think that we are losing revenue because we haven't auto-enrolled some of the people who joined from GLL to Lebeth council and the reason that was offered is that they did not make enough money. You have to have someone certain up to 10,000 pounds salary per year or something like that and these members, yeah so these members were told during the year even though 2B took place that no conditions would be changed so they were not advised about the conditions on the pension so they want to be part of the pension. We are losing contributions from these members and the council has not enrolled them for now more than a year so I think this is a revenue that we can get and some of them want to join but they want it back they did from day one because it's been more than a year they are still not contributing so just to clarify these are members who were already on the pension with GLL. I think these contributions you know in the previous board meeting we were saying that we were concerned about people opting out so this is a additional revenue that we can generate from our members. Just a point. Yeah if I come in there actually GLL staff under the regulations casual staff with no mutuality of obligation meaning if the council said we'd like you to come in next week to do three hours they've got their obliged they can turn down those hours and say I can't do that week or whatever so that's what I mean by non-mutuality of obligation. So where staff are casual workers with non-mutuality of obligation they're not brought under the LGPS rules they're not brought into the pension scheme automatically under contractual enrolment rules. Under automatic enrolment rules if they go over that threshold as you mentioned it's something like 856 pounds in a month they are brought in to the LGPS so anybody who's earned over that threshold are brought into the scheme and they have the option to opt out if they wish to do so. We also ran an exercise on two or three occasions actually where we actually spoke to the management, we spoke to them on at least three occasions, spoke to their HR colleagues etc to let them know, gave them the forms that they had the right to opt in the scheme if they wish to do so. So they were given copies of opt-in forms that went to management etc to disseminate, it went to HR to disseminate and I think that happened on two occasions. So people are entirely free to opt into the scheme if they wish to do so. So I think communications have gone out on two or three occasions since they were to be transferred over but more than happy to talk about it offline if you wish to do so. Thank you. Does that adequately answer your question? So the members were saying that they haven't received the communication and that's the issue. I'm more than happy to take it offline because I can categorically say that communications have been sent at least on two if not three occasions to management to the HR and there was a discussion about a we've not heard etc because on the back of that people did opt in. This was last year or was it last year or whenever they a few months after they were to be transferred. So yeah but I'm more than happy to have a conversation offline. Thank you, Linda. Any questions? Yes I've got a couple of questions. On page 19 and in particular paragraph 2.37 which is the exposure to Israel and Palestine. I had a conversation a couple of days ago with officers where they explained the position regarding the there are two funds involved and there are two companies who have investments in Israel but just for the sake of the record I wonder whether Linda could just repeat more or less what you advised me the other day about one of the companies have actually withdrawn from Israel and the other company is considering its position. I think I will open that too because I don't want to misrepresent the latest position. As I understand it there were two companies that were believed to have still had some indirect investment into exposure to Israel and Palestine and one of which was M&G but apparently that's no longer the case. So I'm not sure if they've actively withdrawn or that's no longer the case. So I'll throw it open to either Saul or Peter to give the latest on that if you could Saul or Peter. Good evening Chair. My name is Saul acting head of treasury and pensions. Linda is correct. One of the investments by M&G which is our fund manager the underlying investment manager owned investments in Alstom. Having spoken to them further Alstom no longer operates anywhere in Israel nor in the occupied territories or in Israel at large and so as a fund manager they no longer have an exposure in Israel. So that's the latest update that we have and we also understand from the LCVE that one of the other sub-funds PIMCO has also sold its stake on Altice that was operating in the occupied Palestinian territories and that update will be forthcoming in the next quarter. Thank you Chair unless Pete wants to add to that. Nothing further from me. Any questions? No? Yes please. So does that mean that it's now the decision that we are going to reinvest? Is that what you're saying here? Well as I understand it one of the companies has already withdrawn investments in Israel and the second one is considering doing so in the near future but the amounts involved are a very very small percentage of this particular fund anyway so yeah it's a minimus really but I think they're heading in the right direction anyway. Is that a correct summary Sam? Yes that's correct Chair, thank you. Thank you very much. Yes going on to page 29, I think if I'm not getting my items mixed up again. On the page 29, Appendix 3 which is member training, I don't know about other members of the board but I can see that this year I've attended four conferences which don't appear on this table. And I don't know whether, I think I know Solar has probably been on a lot of those conferences as well but yours have been put down so you're probably okay but yeah but my attendance hasn't. Even though it has gone through Sarah so I thought I'd just draw attention to that. Thank you Chair. We'll take that offline and check and make sure that Sarah has the correct record but this is the record that we have and apologies for not including that. We'll make sure that every record of attendance is reflected accurately. Thank you very much. And you reported that the stewardship report has been completed I believe earlier. Yeah please do note that that's the case. Okay let's move on to the next one. Where are we? I'm getting my items all mixed up for some reason. The risk register. You need to approve the recommendations. Oh sorry, yes, sorry about that. Are the recommendations agreed? Agreed. Good, thank you. Yes so on to the risk register. I'm going to ask Linda De Souza and Saul Amuko to give a brief introduction please. Linda are you on mute? I beg your pardon. So as you're aware the Pension Board receives this report each quarter and looking at the risk register from the previous quarter to this quarter there haven't been any changes to the risks themselves so I'm going to throw it open for any questions now because there's not been any changes since last quarter. Any questions? Yeah the only one I had I spoke was going back to the previous item in your performance report and obviously this issue about getting them maintaining the correct addresses and there is I think PA5 is probably the most appropriate risk which is that the employer may not administer the employee employer functions efficiently. I will say the current rate of that is quite low and I just wondered whether that can increase that risk in light of what will be had in this particular instance with the sent to an incorrect address. I think in the grand scheme of things one incident in the cohort of 20 odd thousand scheme members I don't think it would warrant escalating it or increasing it to an AMBA rating as such but I'm happy to review it but as I said it was one incident in you know a cohort of 20 plus members. I guess it wouldn't be a risk to Lambeth I suppose because it wasn't our error. Well I suppose it is a risk nonetheless because it's not just Lambeth like I said there are different employers in the Lambeth fund so by far Lambeth is the larger employer with 90% of membership as Lambeth or ex-Lambeth council employees. Nevertheless there are other employers as part of the Lambeth pension fund so when these risks are drawn up it's not just in respect of Lambeth council as a council employer it looks at the fund in total. So I do take on board what you said. I think looking at it in detail though like I said one breach in the 20,000 cohort of membership size is quite minimal and I think I'm satisfied that what we're doing in terms of ensuring that our processes are robust warrant it to be at that rating but I'm happy to review it as well. Thank you. I have a question I was struggling to find it here but when I read it previously the risk of a data breach within our database I've seen previously we have mitigated that risk from the assurance that whoever is doing our IT backup that every year they give us a letter confirming that we are backing it up. So from the assurance point of view I'm of the opinion that has anybody witnessed it if something goes wrong that paper won't be worth it because from our point of view we haven't witnessed it whether what we are saying is correct is it functional is it working have you put any processes at the back of it or are we just saying it blindly accepting what the consultant is telling us. I think we're talking about two different things here because the certificate or the assurance of backing up that's the pension supplier the software supplier and they have backup systems and everything that is in the system is backed up but it's got nothing to do with where an employer of the fund gives us the wrong address of a member that's got nothing to do with the contractor or the supplier of the system making sure that the system is robust if you see what I mean they're two separate issues. It's the first point I was interested in the first point. The first point as in the supplier. Yeah that's where the greatest risk is. Yes and they provide the assurances they do business continuity exercises and provide assurance every year because we are what you call a hosted system so they have a backup system and a different site so if anything if our systems went down for instance they've got a backup elsewhere so that they could reboot from the other system like most systems that we use nowadays to be true for clouds cloud-based systems as well they have to have backups elsewhere don't they so it's the same for the pension system as well. Thank you Linda. Any other questions? Going back to insufficient knowledge and understanding etc etc and you know the other key risks under that umbrella do officers have to do CPDs every year? Well there's a requirement of my staff. We have a very good relationship with the local government association who are very heavily involved in local government pension scheme regulations etc give advice and guidance and so on and so forth and they also provide lots of training so my staff are engaged in doing regular training each year not just not just through the LGA we have our own in-house training as well and there are other areas where we receive training we also as a team have got access to the same platform that members have got access to the LOLA platform and so there's a requirement for the team to carry it to undertake the LOLA training and so we have one-to-ones and team training events once a month and so each member of staff has got their own training and development plan which is reviewed every month and obviously we have our annual appraisals like the rest of the council but our training plan for the admin team is very robust. Excellent thank you very much, all I had to say, so are the recommendations agreed? Thank you, going on to item seven investment performance I'm going to ask Saul Omucho to give a brief introduction please Saul. Thank you, good evening chair, my name is Saul Omucho acting head of treasure and pensions. A brief observation from myself on the investment performance, the fund did not attain to the benchmarks across all tenors during the quarter however there is some good news in the sense that the market value of the fund increased although we didn't hit the benchmarks but we increased as compared to the previous quarter it increased by 21.7 million roughly about 1.2 percent and also according to our actuary the funds funding level increased to 118 percent in the sense that if all of the liabilities of the fund were to crystallize as of 30th of June the fund would be able to pay off all those liabilities 18 pence over and above every pound. So just an observation that the UK's funds exposure to the UK stood at 23 percent of about 400 million of our 1.8 billion pounds. These are the brief observations that I have chair, welcome any questions? Could I ask regarding the funds underperformance, I think we're probably getting through this sort of in the next two items but are you going to tell us what decisions the pensions committee reached considering being overweight in certain areas and underweighting others? Yes that's correct chair, we'll be diving into detail on the next item on that but yes the committee made some decisions and chair you'll also recall that in terms of underperformance a couple of quarters ago the committee decided to divest from one of the performing property funds and there is a lead time of about two years to divest from that and once those funds are crystallized we will look to reinvest them either through the LC or another alternative property fund but committee is actively looking at all underperformance and we will look at all of the decisions that they made in this previous meeting that they held later last month, earlier last month I believe. Thanks very much, no questions? Please. I was just wondering because some managed funds how much percentage of it is due to trading fees that is impacting on the negative side of the fund so have you looked at it because what happens is whenever there is news in the industry traders tend to be very active in the movement of buying and selling because they know all the items in the fee so do we know how much of that fee generated during this surveillance period is affecting our funding? Yes we know, the impact of fees is extremely minimal, the proportional fees to the fund portfolio is about one percent so it has extremely minimal impact in terms of performance. Thank you. They are set out in some of these agenda index items, I think it does indicate what the fees are, is that not correct? Yeah that's correct. Yeah so you can see what they are but we'll come to that in a minute I think. Any other questions? So are the recommendations agreed? That concludes the public part of this meeting. I now move that the press and public be excluded from the remainder of the meeting due to the likely disclosure of exempt information in that section, having considered the public interest test. So is it agreed that we do that? Agreed. Okay so we now have a meeting of the Pensions Board. Thank you all and good night. attendees will need to exit the meeting.

Transcript