Agenda item
Establishment of a Pension Board
This report explains the requirement for the Council to establish a Pension Board, under new regulations which were made on 26 January 2015. There are some elements of discretion for the Council and a proposed way forward is set out for consideration by the Committee.
Minutes:
A report setting out the requirement for the council to establish a Pension Board by 1 April 2015 was presented to the committee by Conrad Hall (Chief Finance Officer). This requirement was introduced by new regulations which came into force on 26 January 2015 and was part of a wider change in governance of pensions nationally. It was emphasised that there had been considerable debate as to whether the additional layer of governance provided value for money; however, the council was obliged to comply with the requirement. Conrad Hall advised that the board did not have decision making powers and could be considered to provide a scrutiny function of the work of the Pension Fund Sub-Committee. The purpose of the board would be to assist the sub-committee in carrying out its function and the board’s remit therefore covered both pension administration and investment. The report outlined a proposed way forward for the establishment of the Pension Board, and highlighted those areas over which the council had a degree of discretion.
The committee noted the views expressed by Unison on the proposed arrangements for the Pension Board and sought further details regarding the suggested level of representation on the Board. It was queried why it was proposed that there be no substitute members for the Board and the committee further questioned what experience and skills would be sought in the recruitment of the Independent Chair. Confirmation was sought that the costs of the Pension Board would be met by the Pension Fund. Further queries were raised regarding the process to be followed should the membership for the board need to be reviewed and/or amended in the future.
Members commented that it was important that there be member representation on the board and agreed that the Pension Board did not appear to be an efficient or cost effective way of improving performance.
Conrad Hall responded to the queries raised and explained that discussions had been held with Unison in relation to the proposals. The view that the size of the Pension Board should be relative to the asset value was not supported by officers. The suggested arrangements before the committee recommended that the Board have seven members, comprising three employer representatives, three scheme member representatives and an independent Chair. As the Council was not the only employer within the Pension Fund it was considered appropriate that one employer representative be drawn from one of the other employers. Two members of the Board would be drawn from the Trade Unions recognised by Brent. The organisations responsible for nominating members to the Board would be responsible for any subsequent changes to those nominations. If the requirement arose for a new independent Chair to be appointed, this position would have to be openly advertised. It was anticipated that a Finance Director or someone with an equivalent level of experience would be suitable for the role of Independent Chair; however it could prove difficult to attract someone to the position with the remuneration offered. The entire cost of the Pension Board would be met by the Pension Fund. A budget of £10,000 was proposed which would include provision for the Chair’s allowance and enable the Board the flexibility to commission work.
In response to a further query regarding the Constitution of the Pension Board set out at appendix 2 to the report, Conrad Hall advised that paragraph 2, under the heading ‘Procedure at meetings of the Board’ had been included in error and should be deleted from the final document.
RESOLVED:
that the constitution of the Pension Board be agreed as set out in Appendix 2 to the Report, subject to the deletion of the second paragraph under the heading of ‘Procedure at meetings of the Board’.
Supporting documents: