Transcript

assume that everyone's read the papers and keep their introductions as short as possible and on the pension board member side we'll try and keep our questions as concise as possible. So the meeting's being webcast, the webcast is managed remotely and if it gets interrupted then we'll switch to Teams, the Teams call will be recorded. People on Teams and not present physically if you could raise the hand button to speak and anyone else raise their hand in the meeting to speak. And if you're on the Teams call could you keep your microphones muted when you're not speaking just to improve the quality of the call for everyone. So I'll now start the meeting if you could start the webcast, thank you. So welcome everyone. We are coret, there is an employee representative and an employer representative. So the first item of the agenda is the minutes. Just to remind everyone the minutes does not cover matters arising here, we cover that elsewhere on the agenda, it's just really for accuracy. Is everyone happy with the minutes for accuracy or does anyone have anything they want to raise? No? Good, you just looked like you were going to press your button there Neil. Apologies for absence, so we've had an apology for Nigel Manville, Zoe's not here and Trevor's not here but we haven't had apologies or heard anything so if we'll just note they're not here for the start. Does anyone have any interest they wish to disclose at the start of the meeting? No? Good. I don't have any urgent items so we'll move on to item 5. Sian if you could introduce the pension committee agenda. Yes, thank you chair. So the pensions committee meeting in two weeks will match your papers in the main. They won't be receiving the employer engagement report but they will be receiving investment reports. The papers might be slightly updated based on situations post publication of these papers but that will be highlighted verbally in these meetings, in this meeting. There's not a huge amount going through on the investment side, nothing really of note for here. As part of this item we've included a summary of the minutes for the last committee meeting so you've got sight of those. Just picking up on obviously the area that you didn't see actual last meeting was investments so just key highlights of what the committee did discuss at their meeting on the investment side was looking at the quarterly performance which is noted in your summary. The fund had its PRI scoring for the first time so that's principles of responsible investment and we scored very highly on that with four out of five stars for all areas and we were above average which was really good news. And then the committee in their exempt section discussed items focusing around CBRE mandate within the access pool and its development so that has been progressing and Blue Bay is our new multi-asset credit fund which is now live so the committee had that. There was also an update on the index linked investments as well at the time where we were looking to take opportunity from gilt yields and invest at trigger points. Those haven't been adjusted since either at that meeting or since that meeting just for awareness and they were also told that store brand osmosis implementation change had been carried out so it was just equalizing the weighting of those two mandates. So those were the key areas that you wouldn't have had sight in in your own papers that they discussed at their meeting. Happy to take any questions on that item. Any questions for Sian? The store brand have they been put on the access platform yet because I remember we talked about that about a year ago. No it's still in development so it's part of the access program obviously it's lots of technical things to go through. It's sort of approved in principle isn't it? Yes so the operator is trying to bring that onto the pool. Okay good any questions for Sian on the pension committee agenda? Okay so the pension board is recommended to note the report. Michael Covenant's report. Thank you chair. There are a couple of changes to make you aware of since the publication and writing of papers. So the economic activity of public bodies bill didn't survive the wash-up process after the general election was called so that has now fallen. We will know after the election whether the government of the day then decides to pick this up but they will need to start from scratch with that piece of legislation should they want to take that forward. We'll keep an eye open to see if that re-emerges once the election process has finished. There's also a note regarding a letter that we received from the Minister of Local Government. There is currently a little bit of uncertainty I believe around what a response if any is expected. The scheme advisory board is hosting meetings on I believe the 17th of June with officers and also with pension committee chairs to discuss next steps regarding that so we hope to have a bit more certainty in the days immediately prior to the pension committee meeting. I would note that lifetime allowance as we've discussed in previous meetings has now been abolished and work is being done at the moment to make sure that our suite of letters properly reflects the current situation that is an ongoing piece that the communications team are working on at the moment. Potential Labour government said they're going to reintroduce it but it's hard to see how they're going to do it. So that is something that would need to be done through a budget piece most likely so again officers will watch this space depending on the outcome of the election. We're not going to preempt anything that may or may not happen at this point in time depending on results of the election. Quick note on pension board membership so Tim Oliver an employer representative stood down in May and we have been looking to find a suitable replacement. We have had one person put forward for that position. Ray and I met with that person a few weeks ago and we're currently in the process of preparing a paper for governance committee so hopefully that person will be in place in time for the next round of meetings and bring us back to a quorum position. Outside of that there's been a renewal of a few fund policies which have been covered in the appendices. I'm not intending to go through those in great detail and also it is that time of year when the pension board needs to prepare its report for pension committee. So that has been drafted in consultation with the chair. So again I don't intend to talk to that at great length unless anyone has any questions. Any questions Neil? I've actually got questions on most of the appendices so if I just work through them one after the other. You said in terms of the letter from the minister it's not really clear at this point in time whether the response is required. But it seems to me in that an assertion from the minister and presumably central government that there is a perception that the local government pension scheme nationally isn't efficient. Is that a view that's shared by you that nationally the scheme isn't efficient and/or is the scheme locally inefficient? It does seem to be that that's what the letter is implying. We believe as a fund ourselves we have very robust governance arrangements. I wouldn't really want to comment on the scheme as a whole. Particularly bearing in mind the political environment we're in at the moment. I haven't seen anything to show that the LGPS is ineffective or poorly governed. Every scheme will be governed slightly differently. But I think in our response to that letter we would be highlighting what processes we have done to show effective governance. When we pick up in the exempt section around the general code as well we can show that we're very very strong from a governance perspective. I think it's probably worth remembering that actually the LGPS funds are all very quite large in comparison to when we think about the private sector schemes. So the arrangements on those and the scale of them is what in a private sector world most of those funds would be considered large, not small. So I think there's a lot of us but we're not necessarily small in any capacity. But no I think from our perspective we can only really comment on our own situation and we feel that we're very robust in our governance arrangements. I can add a little bit of context as well because I actually had dinner the night before last with the former head of pension policy at the pension regulator David Fares who talked a little bit about this. And he said that the view of the government, sorry, a couple of years ago was that they should be trying to mandate pension funds investing in the UK economy and had a long discussion about it and they came to the conclusion that they couldn't do that. It's not permitted under EU law and it's questionable under UK law and what would it work. So their strategy was really is to try and consolidate and then encourage funds to invest in the UK economy. I think part of this is to try and have more influence over the local government authorities investment strategy by encouraging consolidation. Now whether a new government of whichever colour will have the same view and wish is to be seen but that was partly what's behind this. Although it's asking questions about efficiency, it's really about consolidation, is what they're trying to achieve. It's interesting you say that because going back very many years now, there was this body called the Audit Commission, used to float around. And I think it was probably in the 80s and 90s the Audit Commission started promulgating the three E's, economy, efficiency, and effectiveness. And that letter is focusing on what it calls efficiency. You, Sean, in answering me have just mentioned ineffectiveness and from my perspective, that letter is touching on consolidation but is actually focusing on economy. From my perspective, that letter is about cost not efficiency. Would it be possible to draw comparisons either locally or nationally with other public sector schemes like the teacher's scheme or the NHS scheme? Because that letter mentions... Unfortunately, they're both unfunded. They're both unfunded but they have cost structures. And how efficient are those schemes in comparison to the local government scheme? It annoys me, to be honest, that a minister is writing a letter to a local authority saying, You're not doing very well. You need to do better. And there's nothing in there evidential which indicates that there is a problem here. Are there comparative statistics that we could use to actually refute those positions? In simple terms, no. And I think I just raised a good point that actually when costs are noted around the LGPS, it's very often around the investment management fees which don't exist in those unfunded schemes. Also, the investment costs will obviously depend on the structures. So if we are being directed to move more into things like private equity, those cost structures are gonna increase. They're not gonna go down. So again, there seems to be a bit of a potential disconnect within that understanding of cost. I think comparing it to other public schemes is probably gonna be incredibly difficult. Even comparing one LGPS fund to the next is, again, incredibly difficult. I know the PLSA is looking to sort of see if there are any ways of looking at the costings across the board. But again, you can have quite high costs or low costs. But actually, from a cost-only perspective, you can be high or low. But actually, are you efficient and effective? Do you have large backlogs of administration work? Are you actually communicating with your members? Is your data correct? Various things like that. And those costs and the workload and effectiveness of the teams, you can't compare the two. So I think the PLSA are just maybe gonna pick up on a couple of points but not necessarily bring any broad comparisons because of that underlying uncertainty of actually what are you providing for those costs 'cause it's not consistent between the funds. One of the other issues with scale or economies of scale is that there are some benefits from scale in terms of getting into illiquid assets like private equity and infrastructure and stuff like that. But there are hidden diseconomies of scale. So when you're trading on, as Russell will know, when you're trading on, if an investment manager has a view that they don't like a stock anymore, the bigger you are and the more of the stock you're selling, the harder it is to sell that and the more you move the price. And so you have sort of hidden diseconomies of scale. And I think there's an argument here that whilst there are some benefits of scale, you shouldn't lose sight of the diseconomies of scale as well. Okay. That was Appendix 1. Got questions on 2. Appendix 3, the privacy notice. There's a table in there of data controllers. What isn't mentioned in there are employers within the scheme, which I think should possibly be in that table, not least because there are data sharing agreements in place with employers in the scheme. And with the pension schemes, presumably there is some sharing of data in relation to transfers into the e-CISCS scheme and transfers from the e-CISCS scheme potentially into private sector schemes. Thoughts on that, Sian? I suspect on transfers they probably already have the data. The other pension scheme already has the data. You're not necessarily sharing. They're sharing what they already have, and they're sharing what we wouldn't actually get data from. But, yeah, employers I thought is a -- should be a consideration. Do you want to say that, Michael? Yeah. So the table that we've included is based off the suggested template from the Local Government Association, which doesn't include that as other funds and other schemes, because, yeah, they would then be producing their own privacy notices data controller. I don't see any issue with adding those in personally, just to highlight the fact that they do exist, but they would then obviously be responsible for their own maintenance of people's data. I think Paul. Yeah, I think the idea of privacy notices is what we do with the data and the data we hold. And as soon as you're talking about transferring in, it becomes our data, and transfer out, that would be down to the fact that they're signing discharges, and the discharges will make reference to privacy. So that and the discharges have to be signed by both the other scheme and the individual. And that's before money changes hands. Before it changes hands? Yes. Before you do a quotation, you'd effectively have permission from the member. The member was signed. Something to say would allow you to talk to those people. I think it's just worth thinking about, because what you're seeing in the privacy notice is this is what we're doing with your data. And there's just two instances there in my mind where there is data sharing going on that it may be worthwhile referring to. Yeah, happy to take that away. We'll just cross-reference that with the data protection team. And I'll add. On Appendix 4, before we move, does anyone else have any questions on Appendix 1, 2 or 3? The memorandum of understanding, from reading it, that is in place with scheme employers. Is there some sort of similar data sharing agreement in place with admitted bodies? So the admitted bodies are subject to their own admission agreements rather than specific than other documents around this. But are the data sharing provisions then in the admission agreements? Yeah, there is information that we share with them about our expectations around sharing data. Appendix 5, just a point, on pages 78 and 79, there are a number of bullet points. Towards the bottom of page 78, it says in relation to LGP access pension fund. There are then the next 8 bullet points which relate to access. And then the fifth bullet point on page 79 goes back to the whole fund. It's just a formatting thing. As a suggestion, it might be better to bring that access piece out and putting it at the end of the other bullet points. We've got 8 bullet points in there which relate to access in the middle of bullet points that relate to the fund as well. Or you could make, in relation to LGP access pension pool, a bullet point and then the next 8 sub-bullet points of that one. As I said, it's just formatting. Does anyone else have any other comments or questions on the appendices? No? Good. These are just updated documents from what we already had before, aren't they? So it's only the yellow bits that are changed, is that right? The governance and compliance statement is this year's governance and compliance statement, but for the vast majority, it's the stuff highlighted yellow. The previously notices haven't changed from last year because there's been no change to the requirements upon us, and we were already deemed -- felt we were compliant with those expectations. Yep. And it's the exit credit policy that's the same apart from the yellow changes. Yep. So you put in a point under admitted bodies 1 around the date of May. Do you just want to explain that, Sian? I think that would be helpful. Yeah. So this is an amendment of the wording rather than a whole new section. So this is more to make it clearer that the date that an admission agreement signed isn't a preemptive factor for the decision made by the committee, but it is something that the committee will take into account when making a decision. The way it was worded previously implied that it was a yes/no type approach based on the signing date, which is not how the committee have actually been making decisions and is not what was intended by the policy. It is one of many factors to be taken into account. So we've just looked at the wording with the legal advisors and just changed that. So it's written in a way that these are things that we will consider and the committee will take into account, but it will not preempt the decision. So it won't fetter the decision that the committee is making. So it's, yeah, just lightening the wording to make it clear that it's a consideration. Good. Neil? I'm not sure that from my perspective that the wording is that different because previously there was an assumption in the wording that the treatment of a surplus was reflected in the commercial terms. This is now saying it is anticipated. And I think that's a slightly semantic difference between assuming something and anticipating that something is the case. I'm not convinced that there's a need for that penultimate sentence. And I would also suggest that at paragraph two, rather than saying an employer who cannot demonstrate that they're exposed to underfunding, I think you should change that to an employer must demonstrate that they have been exposed to underfunding. From my perspective, Sean, the way that is worded is the wrong place to start on a policy, because you're starting the policy by saying we anticipate this to be the case when the regulations actually require that all relevant information is looked at before you come to a conclusion. And in some regard, I think that is preempting that consideration of all relevant information. Yeah, this has been through the lawyers. It was written by a specialist consultant as well, so it's been through both consultancy and legal. We can re-review that wording. That particular paragraph is much more related to being explicit on the pass-through arrangements, because those admission agreements are written in a way that they are bearing absolutely zero risk. It all sits with the letting authority. They are not entitled to a surplus, so it's more clarifying that. But we can take that wording back to the -- From my perspective, the issue here is those contracts which -- and there won't be many of them, but there may be some of them -- which are completely silent on risk sharing. Now, from my perspective, when those contracts were agreed, surpluses wouldn't have been part of any consideration, because surpluses were not possible -- or, sorry, the repayment of surpluses was not possible. And I know from my own personal experience that I've sat and I've negotiated contracts of that nature, and those things that weren't possible aren't considered. So, from my perspective, if there are risk sharing provisions, those risk sharing provisions will be explicit in the terms. They have to be explicit in the terms. And any surplus should be dealt with in accordance with those risk sharing provisions, even if those risk sharing provisions in the terms only related to a deficit. But if the contract is silent on the treatment of a deficit, then I think it's a reasonable assumption that the contract is silent on the treatment of a surplus as well, because it would never have been considered. I think what Neil's asking for, Sean, is just to have a look at that wording and see if we can -- I know that the intent is to make it such that, you know, unless there's really specific evidence that a surplus should be shared, that it should be -- I think Neil's point is it's a little bit too much maybe in the -- of the favor of assuming there is a surplus when there isn't. I know you didn't intend that, but maybe just turn some of the language around to -- I agree, Red. And as a policy, I think the starting point is too far towards the point of saying there is no entitlement to a surplus, when the starting point should actually be what are the facts of the case. Yeah, we will look at the wording and make sure that it's not interpreted in a way that thinks a decision is preemptive based on a single factor. Yeah. And when does this get approved, Sean? Is that when you get pension committee to approve it? So, yeah, it'll be approval at committee, so it'll be -- Is it something you could do before, then, to look at the wording? We will try. Okay. As we said earlier, this is already a policy in place, so this is already a softening of the language. So if we can't change it around quickly enough that this -- we would probably ask for approval for this and then continue to review, just so we've at least got that first layer of softening in, rather than the existing policy that is published and available and in place. Thanks. Any other comments on Appendix 6? No. I only had one on Appendix -- I think there's a typo, because I think we've raised this before. If you look at the chart, Appendix 2, Analysis of Change, we start off with an 859 million surplus and end up with a 732 million deficit. I think that's supposed to be both surpluses, isn't it? Yes, that is supposed to be both surpluses. They naturally produce these as negative deficits, so we asked them to change it to a positive surplus, and it came through on the publication date, and I hadn't noticed that they'd updated half of it and not the other half. So, yes, we'll correct that going forward. Any comments on the funding? So it's, you know, still looking healthy. Inflation has been a bit of a knock because of pension increases, but we're still in quite a good position to where we were three or four years ago. So well done to the Pentry Committee on their investment strategy. Good. Appendix 8. So this is my report that Michael and I -- well, Michael did most of the work, so I'm not going to take too much credit for it -- to the committee on the work that we've done. Is everyone happy with Appendix 8? Good. So we can submit that to the committee in two weeks' time. Good. I think that's everything then on Item 6. I don't think I've missed anything, have I? So if we could note the report, and we will provide comment on the draft report to the Pentry Committee along the lines that we said. Good. So Item 7, then employer engagement and communications report. I think you're going to cover this one this time, Sian. Yes, thank you, Chair. So I'll assume that the report's been read. It's quite a light report. Employer contribution collection is still relatively positive. The two kind of late ones in the most recent month are, again, new employers, and they came through one day late and two days late, so it's not like there's large delays. Obviously, there is a statutory requirement for them to be received on the 19th. At the time of writing the report, we didn't know what the reason was. I'm not sure if we've been provided that information yet. But, yeah, they're not anything that's systemic that we need to be worried about. And comparing the late payments across the 12-month period to the prior year, we're in a much better position with the employers actually paying and understanding the responsibilities better. And is there any connection to the size? Does it tend to be smaller employers, Sian, or bigger ones? Yes, normally the smaller employers, yeah. There's a bit of an update on the iConnect. So everyone's had some sort of engagement from an iConnect perspective and various initial inquiries. So all good work on that side, couple of still some delays in some of the larger employers. So Paul might pick up on that a little bit later. And then communications, it's just very much the normal communications plan work, so newsletters, keeping the website update, updating letters to members based on regulatory changes and project work and various things. But happy to take any questions on any of those areas. Has not being able to replace Tim had any impact on communications and engagement with employers? Have you managed to keep that going as planned? So I think we've managed to keep that going, partly because a lot of the work that the employer engagement team had been focusing on was on the iConnect side. Now the vast majority of our employers are live and onboarded with iConnect. That's now part of a business as usual process. And that sits in Paul's side of the pension fund, which under the projects and iConnect team. So actually the requirement on the iConnect side within that team is significantly less burdensome. So it's more of a shift of roles and responsibilities as the rollout of that happened. We've managed to do some recruitment in the employer engagement team. So we've got Stephanie started last week and we've got a new starter again in a week and a half's time. And again, on the communications side, we've got Paul, our communications manager, who's been consistent throughout. Sorry, I was late everyone. I just wondered if I know the report says that a plan needs to be put in place about the training after the feedback. Is there a rough timescale on this or is it a bit up in the air that Tim's not been replacing? Thank you. Yeah, so no timescales yet. So that will be one of the things that we do once we've got the new starters up and running, is working out a plan of how we're going to do that. So the modules, we've got all of the PowerPoint presentations, there are video recordings of all of the ones that Tim has done. So it's getting the new team up to scratch and that knowledge of how the LGPS works, the expectations from the employers to then actually start to roll that out wider. So that will be one of the big projects for our new starters. Good. Yes, Paul. Yeah, I mean, I did do four presentations since Tim's left. So a couple or two different departments in East Sussex. Okay, good. So I think we have a good understanding of all the existing modules and I think the admin team could certainly step in and support or do one-to-ones after some of those as we roll them out to employers. Good. So I don't think there's anything that would concern us. It's what I'm saying. Okay. Good. So I know, I think it's important to maintain the training. Any further questions on the engagement and compliance report? No. Okay, so we are going to note the reports. Thank you. So Paul Pensions, admin. I'll move over to you. Thank you, Chair. Yep. So usual sort of report starting around the key performance indicators. I did say back in January that we were going to struggle for quarter one, but you can see there has been some improvement in the numbers in appendix one. So the, I was actually expecting to see more red in March and then, I mean, those, those two ones are ones that, you know, they always go to the bottom of the pile that are red. I was expecting for what you said at the last meeting to be seeing more red, but it's actually, so I think we, I think we turned it around a little bit quicker and that's partly down to the fact that we've had some people doing a little bit over time and I think turnover has been steady. I think we knew in March that some of the projects were coming to an end. So I think it could have been even better had we not had so much downtime. We had a lot of system downtime in March for a number of reasons, mainly project related. So I think that in 10 days where the system was down for a period of time. So is that where we've caused it then to go down? No, it just means, I mean, that's things like, you know, the upgrades for Heywood's doing their work. We actually had a change of firewall provider in IT. We had the Oracle patching. So there was a lot of things, but there were some individual project stuff like the GMP where we needed to stop people working on it because we wanted to try and match the two systems so we could test things in the test system before we went live. So there's just a lot of downtime. We call it for project work, but it was also system work really. So yeah, I was quite pleased with where we've ended up. I think it should continue in April and May. See us back on track. I mean, if we took item nine out, so you look at the box on the right hand side of appendix one, you can see that the numbers would be up in the sort of mid to high nineties. So if we went back to the old way of looking at this, then we would be very much on track and we wouldn't be having any of these conversations. So I think that's the reassuring thing from the board's perspective. I think, as you know, my preference is to try and be totally transparent, which is why we put in a couple of extra appendices. So appendices two, I'm not sure it's very clear on the way that it's come out, but what I've tried to do here is I was trying to, I had trouble following that. Yeah, I think it's sort of overlapping a little bit the way it's printed or way it's sort of coming across on the screen. But what it's trying to do is the bottom bars are is to give you a flavor as to how much work missed the target. So what you've got is a history back from sort of 2020 to 24. So if you look at January, the left hand side of the four is 2020, then 21, so in the brown, the green is sort of 20, 22, and then 23. So it works works through the years. And the oldest ones had pretty much nothing outstanding, the newer ones, as you can see, they've had a lot outstanding, although it does account for the fact that most of those are that number nine that we refer to. So that's what the bottom is doing is showing you numbers that are missed. And the top is the KPI itself. So you can see, and that would be the scale on the right hand side of the graph. So with 100% of the top, you can see that you are pretty much always been in the 90s. And it's only the later blue line and the purple on the left hand side more recently, that has been below the 90. So it just gives you a big history, a longer history of where we where we've been at. And the trend from January to March is pretty good as well. So yeah, yeah. And again, you know, and then then the third, the third appendix, which is literally just a table of numbers for the moment. But this is trying to look at actually picking up every single task that we do, rather than just sort of key tasks. And we squashed some of those headings into other words, if you see what I mean. So some of some of them are covering a number of different things. So a divorce, for example, will cover the quote, the payment, the, the credit, there will be lots of things under one heading, but it's trying to pick up the total amount of work that the team does. So what I would like to do, and the other key thing about this is, it shows you the starting number, and the amount in, amount out, and amount left at the end. And the other key thing is, and this is where we had the issue, so I couldn't separate it, we've now managed to separate it. So the number at the end, you've got two, two numbers. So you've got 2300, and you've got sort of 800. So the 2300 are the amount of tasks that we've got that are uncompletes, but the 800 are the amount of tasks that we've got that we can actually, that are uncomplete, that we can work on. Okay, so the difference between the two are what we call reply due, which means something, it's been held up, so we sent something out, we need a response. So we are still tracking that, and expecting a response, and we will do a chaser for it. But in terms of what we can actually work on, it's the 800. Okay. Okay, so I'd like to do something more in this sort of format, format going forward, so that you can track how much is left over, because I think that gives you a good indicator of if there's a problem coming up, if there's a big backlog. So it's just a question of how we represent this, if you like, but I don't want to lose sight of the old, old way. So we, you've got these different tables that are going on, but at some point, we want to move to this new, new web showing. I think it's very helpful, is, but if you wouldn't mind, I wouldn't mind having a quick chat with you about trying to prioritize them so that we can say these are top priority, these are middle priority, and these ones like reaggregation. Yeah, we can start color coding some of it. Yeah, so that we can get a feel of how you're doing on the really, you know, for example, retirements and deaths are sort of the top two. Yeah, absolutely, absolutely. Okay, so any questions on the KPI side? It's a lot of numbers to take in. There's a lot of numbers, yeah. Yeah. Okay, so will you give the same report to the committee as well? I'm giving them exactly the same, we'll have the same discussion to see, you know, get feedback from both boards and committee to help determine how we present this going forward, really. And the last appendices is the usual help desk one. Yeah, we still have got that down, haven't we got it down to a page? We could probably get it back down to a page. I think because we were starting to fall below the gold, I wanted to put the whole table back in on the front page so you could actually see where, excuse me, where the colors came from. Yeah. And because we had a little bit of a period where we struggled, but now we've got the extra resources, the three new operators in place since March. They've now been trained up and they're now on the phone lines. Okay. So, so May has seen us get back to where we need to be, both on the calls, but also just as importantly the emails, because they are the first point of contact for the emails. And at one stage we were over a thousand at the end of last year. So that's now, three is your target number, you're not going any more outstanding vacancies on the help desk? No, I think, I think we're happy that that is now fully manned as appropriate. We'll keep an eye on it. And obviously there are a couple of key points during the year where we do bulk mail-ins like the annual benefit statements where you always expect to spike. But as you know, over the last six months, we've done a lot of bulk mail-ins around McLeod, around the pensioners going online. So those have generated an awful lot of calls. But now we've got total control of that now it's in-house as well. I think we're all comfortable, it's probably at the right level and things will settle down. And do you have any plans to have like secret shoppers? I mean not just to check how things are going? We did, we did. So some of these pension admin teams sat in on the training of those three. So part of that training was, you know, we actually sit in and listen to the calls and then give them feedback on what they've done right, what they've done wrong, what they've done differently, better. But no, we haven't actually gone as far as trying to do that. Yeah, maybe we can get some committee members or board members to ring up and happy for that to happen. No issue. Okay, so back to the paper. I think we've covered off the KPIs and the staffing is all good as we mentioned. We've got the help desk back up to full strength in terms of the administration side. We've also taken on this week a new apprentice. We've now got three apprentices and we've got one vacancy remaining. So I've had no more new resignations. So you say on that one you're not currently recruiting to, is that because you don't think it's needed? I think, I think, I think we'd like to see things settle down for a while. I think the backlog is pretty much clear now. Obviously we've got a few things expected that are going to change that, like the point and hope data. But I'd like to see how we cope for a while, plus the fact that we've now got some robots online. So that's going to mean that we will have to retrain our own existing staff to work slightly differently because a lot of the low level work will be done by the robots and therefore we need to train our administrators to almost check that work rather than do that work. So there will be some differences over the next few months that we want to concentrate on. So we're reassessing our skills matrix for the team and we'll be doing that, but we've just sort of done it. So we'll be self-assessing and reassessing those managers, the staff, against those targets and tasks. Okay. And then we've got a section around projects. I'll just mention a couple of them because obviously some of them will be new to the board. We've gone through these in some detail with the admin working group. But the guaranteed minimum pension project that's been, I think, ongoing almost since I've been here, has now partly got over the line. So we have now pretty much done all the reconciliation and rectification for the pensioners. There were about 2,000 pensioners that were in scope for this project where records needed updating for all of them. Of those 600 fell into the overpayment/underpayment area and we've broken those down in the paper. There were, and the ones that have been overpaid, we are effectively, we've agreed or the committee and board have agreed to write off the overpayments to date. But we will reduce their pensions going forward having given them three months notice. So most of those lower amounts will kick in in June this year. So we are tracking that and the pension increase in April/May for some of them offset that completely, some of the smaller ones. There are a few larger outliers that we have discussed. We have now issued letters and information on all of those. Some of them went in March, some of them have gone literally only recently. So of the first batch we had five complaints, all of which have been dealt with. We've had no hardship cases presented. It's been more around understanding. I suspect we'll have some more now. We've issued those remaining outliers and the fact that when we get to June and the money actually does physically decrease, people might raise it again at that point. But I think it's been a very complex, long and difficult project that we've been glad to get over the line. So we have got some more work to do. I think we've got around 300 cases that weren't reconciled that we need to individually do because nurses wouldn't do it for us. So we're in the process of doing that at the moment. So some of those could end up needing rectification as well, depending on whether we accept our records or HMRC records as part of that reconciliation. So this is going to rumble on a little bit for a few more months, but the bulk and the hardest bit is now done. So that's reassuring from my point of view. So Mercer's finished all their work now, so we're not engaged. Unless they've got a couple of queries on individual cases. And I said the only thing we might do once we've done that reconciliation of those 300 is we might need them to redo the actual rectification work because we want them to replicate exactly what they did on the first batch so that we know that we're treating people equally and fairly, even though we might be applying them on slightly different dates. And is it the sold-off part of Mercer that's doing this Aptia or is it Mercer? It's a mixture because the sold-off part is the administration, but the actuarial which supports it is in the old Mercer. So it's a... So who's that contract with Aptia or Mercer? It's with both and we've just been going through procurement and legal to get that signed off. So we're hoping that anything that comes out of that 300 can be done under the existing novation or contract, if you like, rather than have to do a new one. But yeah, so I think it's good that we're nearly there. So that's the big one to report that's been done over the last quarter. Obviously, the member self-service portal is... I think the testing is now almost complete. We're looking to pilot this with East Sussex in the middle of June 17th. That will stay in place for probably three or four weeks and therefore probably be the middle of July before we go live with everyone. Trevor, unfortunately not here today, did have access to have a little play around with it as well and come back and give us some input. And obviously, the fact that we are allowing everyone in East Sussex to have a look for a month just means that we can control that a bit better. We can advertise it differently through the internet and it will allow us a large population to pick up anything that we haven't found ourselves. We have found a couple of things that have been updated through upgrades. Also, I need to mention annual benefit statements. I think Sean alluded to the fact that the vast majority of our employers are now on iConnect. I think there are only 10 employer end-of-year returns being done. So 10 out of 140. Some of them have multiple employers because they do three or four payrolls but it's only 10 effectively that we're dealing with. The rest will be on iConnect. Brighton and Hove is one of those. No, Brighton and Hove I'm counting as an iConnect rather than a non. Because we're still getting data through that vehicle, just not in a timely manner, which we'll pick up in the other section. So of those 10, I think there are four that have got over 100 members. One Just, which is Sabden. We've got DCAT, which has got a number of employers, which is 382. University of Brighton Academy Trust is nearly 500. And the big one is University of Brighton, which was Tim Oliver's old employer. And again, we might touch on that on the exempt section. There's a few issues with that one. The cloud, we're still not over the line on the cloud data. We're very close now. We've had all the active data back in. I think there were just over 4,000 queries. We have managed to clear about 4,000 and there's about 200 left, which we are resolving with individual employers because we can't make a decision on them and we need their input. And obviously we're still waiting for the Brighton data, which will be... Are these all around the part-time service history? This is the part-time service history. I think the career break side are all done. It's the part-time aspects where we've got start and end dates that don't match or percentages that don't match ours. So things where we've had to go back to the employers. But it's a tiny number. So we're having another meeting with Haywoods next week. We might go ahead and start turning some of this on and then we can start looking at calculations. On the calculation side, the biggest concern has been around transfers because we just can't do anything with them. The LGA this month has produced a sort of template to try and do some work on the non-club transfers. And I think we've got a training session this week with officers and some of the admin team to see if we can do some of that manually before we get the data in the system. So we're hoping to turn some of those transfers back on imminently. That's quite a good position though. I think cloud is complicated and if we're down to 200. On the data side, yes. I think there would be a lot to do on the calculation side and obviously would need to do a good number of recalculations once we are confident of who's exactly in scope. But we've done one or two and the money purchase underpin hasn't bitten. And we don't expect it to in many cases. So this is a lot of noise and a lot of work for next to nothing from members. I think one or two members are starting to get twitchy, bearing in mind. We've written to them in December saying this is now all in theory live. We are going to contact you in due course if you're impacted. But one or two because of their circumstances because they're just about to retire or want to transfer are now asking questions. But again, we're managing all those conversations at the moment. I think that's all I want to say unless anyone's got any questions. Any questions for Paul? Just on the last one, the frozen reef and you say you're writing to 5,000 but there was sort of six this was to 1,000 so there were when there's 6,000 in total is that right? This is the frozen refunds. The frozen refunds there are 6,000 cases that we've got on the books. They're not all necessarily at the five-year stage. So what we're saying is we have found we've written to do an address trace on all of those and of those a thousand have come back with a change of address. Some of these are very old and have been on the books for almost decades. So again we're trying to you know this is the project to try and clear down those historical cases. So we have now written to a thousand people in some cases it's literally 20 quid for others it'll be you know a couple of thousand. But we are trying to clear those things down and you know tidy up the records you know before we get onto things like the dashboard. Thanks Paul. Any other questions for Paul? No? Well it's pleasing to see that we're getting back up again so or down depending on your chart. That's good news. Thanks very much Paul. So we'll note your report on updates. The other thing I would say is can we try and get that help desk one even shorter again because it was better when I was sure. Yeah so that takes us on to item nine which I think is Russell you're going to talk about the the budget. Yes thank you. So this is the final out turn position for the 23-24 year. It's come in at four million and eighty two thousand which is a substantial underspend from where we were reporting at the last meeting of two hundred and ninety seven thousand. The main portion of that underspend relates to the recharge from East Sussex County Council. There was a change in staff supporting the fund and there was a miscommunication around what was being included in various lines in the information that was being provided. So we were double counting various items across that which relates to about two hundred thousand of that underspend. The other areas where we had underspend was where we were being cautious around work that was potentially being commissioned particularly around the investment advice and some of the consultancy on the admin side which sort of covers off most of the overspend that we've we've had. There was a slight reduction underspend that we had and the slight reduction on the audit line where we had a grant come in which we weren't expecting. I think that covers a grant sorry a grant a grant yes from home. It's from the PSAA. They take whatever underspend they've got. Okay and spread it back to funds. Yeah that's interesting and then so that that sort of covers everything that I think to highlight unless there's any questions you have. Any questions for Russell? Gonna spend all the money next year Sean though. Good so can we note the final 2023-24 out turn? Good thanks very much Russell. Danny, internal audit strategy. You've done a couple of audits for us. Thank you chair yes you're right. There are two audits that we have for you today. Pension fund cash management and the administration of pension benefits. In the case of the cash management we were able to give substantial assurance on the controls in place and for the pension benefits audit we were again able to give a reasonable assurance on the controls for that particular audit. No high risk no medium risk on either audit. A slightly large number of low risks on the benefits audit but given the size and scale of the operation of pension benefits I think it's almost inevitable there's going to be some sort of low level error going on. Again I'm assuming everyone's had a chance to read the reports. There's little in them because we found little but I'm very happy to take any questions you may have. Thanks Danny. Any questions for Danny from members? I think the last time you done the cash management one day that was where we found was some mix-up between the authority assets and pension fund assets. Is that you're comfortable now that that's all been resolved and there's no no no. It's it is yeah in a few changes of the governance arrangements around that and where we're comfortable it's not happening I think we we specifically looked in testing to to ascertain that there haven't been that sort of activity going on. I think that was very much a one-off that was identified maybe two three years ago. We've seen no repetition and the structures have changed with the future making sure it doesn't happen again. Thanks so Shanya. Yeah just to confirm on that the the only people that can authorize payments going out of the pension fund bank are now pension fund officers so nothing can happen without a signatory level person from the fund authorizing payment out. So yeah that's a change from where we were previously. Good any other questions? No well thank you very much Danny for the team's work and we'll recommend to note the the two audit reports. So I think that then takes us on to the risk register Sian if I asked you to introduce that paper. Yes thank you chair so again assuming that the report's been read we've only made one change to the risk register and it's more just around the uncertainty so it's just increasing the risk around regulatory risk. We know there's various consultations various bits of guidance due and there's just general there is an election being announced there's very much an unknown as to what the regulator environment will look like for for us going forward so we've just heightened that risk. As per last quarter as well we've just highlighted some areas just so you know we haven't necessarily changed the risk rating but they're areas that are under constant review based on the the environment that we're in at the moment. Happy to take any questions. Does anyone have any questions on the risk register? You're going to monitor inflation I think because that's one that's a particular concern and I know that the chair of the committee has you know not concerns but wants to make sure that we manage liquidity and that's something. Yeah that's one of the areas the committee have asked for some work to be done on so there's a paper will be going that they can discuss at their strategy day around income and making sure we've got sufficient liquidity in the longer term. Okay and then risk I9 is it worth raising them because at the last meeting you produced a report on AVCs and whilst we concluded from that that the default fund was okay we didn't confirm that it was the best and I think you were going to go on my own work with some consultants could you just update us on where you are is this the right place to do that? Yeah happy so that's in progress so you have various questions being raised with consultant just to kind of give us more rather than general is the AVC offering okay I'm picking up on that default fund and a couple of other specifics hopefully that'll be coming to the next meeting just depend on timing but yeah that's one of the items we've put as under review just because we know that there's potential changes and it will be based on the outcomes of the consultant that feeds back in that. And remind me did you appoint hymens to do that work is that right? So we'll be using bonnet waddingham who did it last time yeah. Okay good any other questions on the risk register for shard? No okay so we're recommended to review and note the the pension fund uh this register. Okay that takes us on then to the work program shard. Uh yes so this is just an update for you as to what papers you and pensions committee are going to be receiving over the next 12 months um the two kind of items that will be coming through at your next meeting are an update to the conflict of interest policy that's just the three-year update of that um and we'll be providing an update on the various contracts that we have um so there's a note to that um and actually your exempt paper later just where some of those are coming up um closer but we'll find a much wider overarching position on suppliers um and again we just keep track of the areas in which you've asked for us to look at um and feedback so we've got the one that was picked up obviously just now uh the abc default fund um so that is in progress the risk register actually sitting down as a board and going through that so we'll arrange a date um in the near future to do that um we've still got the ill health insurance um to look at. That was just that one which is because we've been had it for for three years is it all right because we introduced the last time we did it yes i think it's yes probably coming up to three years if not already um so yeah it's just making sure that offerings um robust i think um one thing was yeah so it i think one thing that we need to do is just also look at the making sure the employers are still aware of what they're supposed to be doing when they're doing it as well so they're kind of training around that um but yeah we'll review with the offering and just make sure it's still appropriate. Good. Any questions or thoughts on the work program? I'm happy with that sorry no i could see you thinking so just in in relation to the um the ill health insurance one of the questions i would have about it is whether or not it is actually providing value as as i understand at the moment there is a policy in place with is it legal in general yeah um for which there is obviously a premium being paid that premium is being funded through an additional contribution from the employers that are taking part or participating in the scheme i appreciate that ill health can be a strain on the fund and it can be significant in cases and insurance may be the appropriate way of dealing with it through additional contribution from employers i'm not convinced that ill health is a material risk to the fund and self-insurance might be an alternative approach if employers are already contributing why are we necessarily having to pay a premium to a private sector organization to provide the insurance when the fund could underwrite that position itself so that was the position pre april 2021 and we did the officers did a bit of work i mean i could perhaps regenerate that work to get out why we did it okay um because nil probably wasn't here then yeah so it's a lot of it's around the it's i agree it's not material risk to us as a fund um not all employers are part of the ill health insurance um it's optional or enforced depending on their size um the main reason it's there is to avoid shocks to those small employers because when an ill health payment comes through we will recharge the employer and they can be huge amounts of money so it's providing the stability of finances to those was one of the main reasons why why it was introduced they didn't increase their contributions as part of it it was it's adjusted through the valuation process so we didn't say because you've got the ill health insurance you're going to have to pay an extra premium on top it's it's coming it's being offset through the valuation process um and there was also we do get a rebate from legal in general as well so that money goes back to the employers um but yeah we can we as part of the work we can do an assessment as to actually the values of the the claims um and how much are we paying for it and actually all in all does it is it is it a good thing um those those employers that are being able to use insurance rather than having a half a million pound payment um suddenly invoice them would probably quite grateful for it but how often those are coming through we'll um look at that as part of the review i'm remembering now that so it's not we could probably self-insure it or nil but the problem is it's it's an employer cost and we had i think one case with a very small employer where they just couldn't have couldn't afford the half a million or whether they need five employees or something and so we had a big discussion about where to set the um the level of where it was compulsory and where it was that they were big enough the employers were big enough on their own to self-insure so it's uh but you're right we as a fund could probably afford to self-insure but the employers can't good pull yeah so i think i think just to try and summarize it we get about um 20 ill house a year some of those are from deferred as well as actives it's only the actives that are insured not the deferreds um and as you say the cost of those can be considerable if you've got a very small employer with a few people not paying a lot of money the idea was that they have to fund it by the next valuation so they get a small window of time to actually pay that amount off the costs are less than one percent of payroll and all of those strains those canes that we've tried to put through have all been successfully paid so we do actually put them in as and when they happen and legal general paid out it's a there's a profit share on so it depends on the amount of claims that we have during any one year compared to the premium it's that excess there's a profit share we get some of it back and we do all the way through hymens hymens don't get paid by us they administer it effectively by commission from lng as well so it is relatively cost effective but again we can provide more detail really okay just perhaps copy the board members on that that before we even come to the review just maybe copy the board members on the paper from before that would i think perhaps be helpful okay are we have if there's no further questions are we happy to note the work program for the coming uh year and just to remind um not to remind members of what if you have done training outside of the ones we do together could you make sure that is it your team michael's told mariana isn't it that's told of it so that she can enter in the training log yes do please let mariana know um and she'll update your personal records accordingly thanks good so that takes us on to item 13 um any other non-exempt items i would as i said before i don't they're urgent i don't have any um so that brings us on to item 14 exclusion of the public and press so do we agree to exclude the public and the press from the meeting for the remaining agenda items on the grounds that if the public and press were present there will be disclosure to them of exempt information as specified in paragraph three of part one of the lga 1972 as amended namely information relating to the financial or business affairs of any particular person including the authority holding that information so can we all agree to to move to exempt items yep um could you end the