10 October 2022, 1.00pm
Advisory Board

Full details of the meeting and agenda papers can be found on the board meetings page.

The minutes of the meeting on 6th June were approved.

The main points arising from the meeting are shown below:

SAB 2022/23 Workplan and Budget – The SAB budget and workplan had been sent to DLUHC for Ministerial approval. The workplan included continued work on the Code of Transparency and work on the Good Governance review. There was a need for additional resource in the team to complete the workplan. The additional resource would potentially include a Data Analyst to assist with the completion of scheme wide reports and a replacement for Bob Holloway, once he had retired. The expansion of the team would lead to upward pressure on the levy. The Chair agreed that the successful delivery of the workplan would require additional resource to deal with the increased workflow. It was agreed that more detailed plans would be brought to SAB in December.

Agenda Steering Group Update – Members were informed that the steering group met for the first time and discussed current fund valuations, Good Governance proposals and pensions fund administration capacity and capability. On fund valuations, it was agreed the Board publish a statement drawing attention to the need for long term stability in employer contributions.

McCloud/Exit Pay Update – On McCloud, it was expected that the Department would publish their response to the consultation on McCloud remedy and draft regulations by the end of the calendar year. As there was now less than a year before the implementation deadline (1st October 2023), it was imperative for the regulations to be agreed before then. On exit pay, the HMT consultation was issued in mid-August and would be closing on 17th October 2022. The process for handling exit pay only affected central government staff; they did not apply to local authority staff. The proposals will apply to some LGPS members (primarily members working at academy schools) so the Secretariat are developing a response and the Board delegated authority for the Chair and Vice-Chair to clear the Board’s response.

SAB/Committee Membership – The Board approved a number of appointments to the Board and both committees that do not require formal approval from the Secretary of State. These included the nomination of Andrew Dobbie (UNISON) replacing Colin Meech (UNISON) as a scheme member representative on the Investment, Governance and Engagement Committee, Richard Lane (Academies Representative) joining the IGE Committee and Charity Main (Academies Representative) joining the Cost Management, Benefit Design and Administration Committee. Alan Wilkinson (SPPA) had stepped down as an observer to the Board; Kimberly Linge (SPPA) attended the meeting for the SPPA. Jon Richards (UNISON) stepped down as a Scheme Employer Representative from the Compliance and Reporting Committee; his post had yet to be filled. Councillor Christopher Weaver’s Board membership was awaiting approval from DLUHC.

Risk Register – It was agreed to develop a formal document outlining identified risks to the Board. The Secretariat agreed to bring a first draft to the Board at the next meeting.

Climate Risk Reporting Consultation – The Board was informed that the Responsible Investment Advisory Group (RIAG) had discussed and advised on SAB’s response to DLUHC’s climate risk reporting consultation. The discussion included the type of methodology the LGPS should use in data collection, scenario analyses, the approach to target setting and the impact that climate risk reporting cold have on fiduciary duty. It was agreed that the Climate Risk Reporting consultation response would be written, circulated to the Board and signed off by the Chair and Vice-Chair.

Good Governance Review – The Department had taken on the recommendations the Board had made regarding Good Governance and a working group would be meeting soon to discuss the implementation of these recommendations. The Chair welcomed the update and the work being done by the Department.

Compliance and Reporting Committee Report – The Chair of the committee reported to the Board details of the meeting held on the 5th September. The Committee had discussed the development of FSS guidance, and the resulting product will be free to users and will be a joint product of the SAB and CIPFA. The committee workplan was starting to mature; workstreams had been agreed, each had volunteers who would lead progress with them. The Board was informed that CRC Chair, Mark Wynn had been speaking with senior CIPFA colleagues to establish reporting routes into the organisation.

Cost Management, Benefit Design and Administration Committee Report – The Chair of the committee reported to the Board details of the meeting held on the 12th September. The committee was informed that work to collect data on opt outs was being scoped by the Secretariat. On survivor benefits, it had been confirmed by the Department that they would propose to amend the LGPS Regulations to implement the Elmes and Goodwin judgments (i.e. remove the disapplied provisions in the Transitional Regulations which had required nomination of cohabitees and equalise survivor pension calculation for male and female survivors of members in line with that of widows) and also to remove the upper age limit on entitlement to death grants (which is currently 75). On the Gender Pensions Gap, GAD had informed the Secretariat that much of the data requested on the gap will be part of the 2020 valuation report. GAD were still preparing an estimate for the additional reporting and analysis needed. On Fair Deal, the Board agreed to write to the Minister to request an update on the New Fair Deal consultation.

Investment, Governance and Engagement Committee Report – The committee was given an update on compliance with the Code of Transparency and had a discussion about the next steps to be taken with the Code of Transparency online reporting tool. Recommended changes included allowing for quarterly reporting of data and integrating email reminders to complete templates into the system. Members were also informed about the suggestion of producing a manual for the system. It was agreed that a working group of fund representatives be established to discuss improvements and that the Secretariat would consider conducting a survey at fund level to gather wider opinions about improvements to the system. The deadline to agree changes for implementation in 2023 would be 1st December 2022, before the next meeting Board meeting on 5th December 2022. The Board agreed on the delegated approval for the expenditure incurred to implement email reminders and quarterly reporting of data.

AOB — The Chair informed the Board that a request had been made by Martin George of the LGC to attend SAB meetings. The Board were of the opinion that this would not be necessary as public attendance at other public sector scheme advisory board meetings was not common practice. The papers and minutes for the Board’s meetings, however, are public record and available to access. DLUHC representatives confirmed that CMA will be updating their website to include the Department’s position on the CMA Order. On the UKLFI, the Board agreed that the secondary revised published statement was accurate.

Date of Next Meeting – 5th December 2022