Agenda item

This report presents the Pension Fund quarterly update pack for the quarter ending 30 June 2015.

The Committee received an update on the Pension Fund for the quarter ending 30 June 2015.

Barnet Waddingham Quarterly Update Report

Nicola Webb (Pension Fund Officer) drew Members attention to page 44; appendix 3 of the report. The report showed an increasing employer contribution rate and an increase to the funding level. The Fund Actuary confirmed that this was attributed to the following:

·           Since the last triennial valuation in 2013, the assets have grown more quickly than the liabilities and so the funding level improved from 83% to 87%.

·           Reduction in the indicative deficit funding element of the employer contribution rate from 8.3% to 7.8% at 30 June 2015.

·           Reduction in the discount rate to 5.5% leading to an increase in the indicative employer contribution rate required to fund future benefits.

Nicola Webb confirmed that the Fund Actuary would be revisiting the Fund’s contribution rate as part of a detailed analysis as at 31 March 2016. However, Members still shared concerns of a further increase to the employer contribution rate in light of a reduction in the discount rate. In response, Neil Sellstrom agreed to request a detailed explanation from the Fund Actuary.

ACTION: Neil Sellstrom, Interim Head of Pension Shared Services

Cashflow Monitoring: April 2015 to June 2015

Nicola Webb drew Members attention to page 45; appendix 4 of the report, which set out the cashflow monitoring. The forecast showed that that the Fund was forecast to be overdrawn by November 2015 without additional monies. It was proposed that £5m be transferred from the £30m held in the LGIM Sterling Liquidity Fund to cover the overdraft. It was reported that officers would present a proposal to deal with the long-term cash flow position for the next meeting of the Sub-Committee in November 2015.

ACTION: Nicola Webb, Pension Fund Officer

Pension Fund Risk Register

Nicola Webb drew Members attention to page 47; appendix 5 of the report, which showed the risk register. It was noted that there had been three changes to the register since the previous quarter regarding operational governance and administration. It was additionally noted that the Pensions Board held its first meeting prior to the statutory deadline on 30 July 2015.

In light of the Council’s transition to BT Managed Services, Members were concerned that risk item number 18 on page 55; appendix 5 of the report, was described as a medium risk. In addition, there was similar concern regarding risk number 23 on page 57; appendix 5 of the report as this was rated as a ‘very low’ risk. Nicola Webb agreed to refer these concerns to Hitesh Jolapara (Director for Finance) and Debbie Morris (Bi-Borough Director for HR).

ACTION: Nicola Webb, Pension Fund Officer

Budget Announcement: Future Consultation

Neil Sellstrom (Interim Head of Pension Shared Services) drew Members attention to page 59; appendix 7 of the report. The Department for Communities and Local Government (DCLG) were preparing a Consultation, which would be issued by November 2015 that would seek proposals from LGPS Funds to reduce costs, without impacting on investment returns. It was noted that the Government welcomed moves to participate in national frameworks for procurement as well as participation in the London Collective Investment Vehicle (CIV).

RESOLVED –

THAT, £5m is withdrawn from the LGIM Sterling Liquidity Fund and paid into the Pension Fund current account to cover pension payments.