• Agenda

Minutes of Meeting of the Pensions Committee held in the Council Chamber, Council Headquarters, Glenurquhart Road, Inverness on Thursday 14 November 2013 at 10.00 am.

Present:

Mr D Fallows, Dr D Alston, Mr K MacLeod, Mr N Donald, Mr C Macaulay, Mr A Mackinnon, Mr T Maclennan

Officials in attendance:

Mr D Yule, Director of Finance
Mr C MacCallum, Payroll & Pensions Manager, Finance Service
Mr B Porter, Finance Manager (Corporate Budgeting, Taxation and Treasury), Finance Service
Ms D Sutherland,  Audit and Risk Manager, Finance Service
Mrs M MacCallum, Treasury Officer,  Finance Service
Ms P Tait, Senior Audit Manager, Audit Scotland
Mrs L Dunn, Principal Administrator, Chief Executive’s Service
Ms A Macrae, Committee Administrator, Chief Executive’s Service

An asterisk in the margin denotes a recommendation to the Council.  All decisions with no marking in the margin are delegated to the Committee.

1.  Apologies for Absence
Leisgeulan

Apologies for absence were intimated on behalf of Mrs H Carmichael, Mr J Ford, Mr R Laird, Mrs C Wilson, Mr A Campbell, Ms E Ward, Mr E Macniven, and Mrs L Mackay.

2.  Declarations of Interest
Foillseachaidhean Com-pàirt

There were no declarations of interest.

3.  Internal Audit Review of Pension Fund Contributions
Aithisg Sgrùdaidh mu Thabhartasan Maoin Pheinnsein

There was circulated Report No. PC-14-13  (50kb pdf) by the Head of Internal Audit & Risk Management which referred to an audit of Pension Fund Contributions which was undertaken as part of the annual plan for 2013/14.

The Committee was advised that the final Internal Audit report contained an audit opinion of full assurance with the conclusion that the Pension Fund contribution system operated in accordance with the Council’s membership criteria and that the system was reliable.  A few minor discrepancies had been noted and one low grade priority recommendation had been made which was due to be implemented by 31 October 2013.

The Committee NOTED the report.

4.  Pension Fund Administration Update Report
Tabhartasan agus Rianachd Maoin Peinnsein

There was circulated Report No. PC-15-13  (37kb pdf) by the Director of Finance which provided a periodic update report on matters relating to the administration of the Highland Council Pension Fund.

There was also tabled Appendix 2 to the report which set out the programme for the Local Government Pension Scheme (Scotland) seminar on the reform of the Scheme in Scotland to be held in Edinburgh on 17 December 2013.

It was confirmed that contributions from Scheme employers were being received on time and all contributions were up to date.  Confirmation was also provided that, as requested by the Pension Committee on 22 August 2013, internal controls were in place to ensure that pension contributions deducted through the Highland Council Payroll system and paid into the Council’s bank account were promptly transferred into the Pension Fund Bank Account. The report also detailed administrative costs, actuarial fees and administrative changes associated with the Fund.

In response to a question it was explained that the late payment of contributions highlighted to the last meeting had resulted in  interest amounting to £6,364.92 which had been paid from the Council’s bank account to the Pension Fund Account. It was reported that this sum had been calculated based on the agreed model for charging interest for such delays.

In response to a question on the proposed changes from final salary to career average pensions, particularly in view of the current healthy position of the pension fund, the Finance Manager explained that the Local Government Pensions Scheme Reform involved national changes and the Council would have to implement these in line with the regulations.  The Finance Manager acknowledged that the Pension Fund assets had grown significantly over the last year but he highlighted that the last actuarial valuation indicated that the pension fund was 97% funded and consequently it still had significant liabilities also.  The Director of Finance further clarified that the changes would not be retrospective therefore employees would accrue final salary benefits up to March 2015 and that career average pensions would only apply from April 2015 onwards.

The Pensions and Payroll Manager reported that arrangements were being made for Members to receive a future presentation on the main changes to the Local Government Pensions Scheme.  

Thereafter, the Committee NOTED the report.

5.  The Highland Council Pension Fund: 2012/13 Audit
Maoin Pheinnsein Chomhairle na Gàidhealtachd: Sgrùdadh 2012/13

There was circulated Report No. PC-16-13 (431kb pdf) by Audit Scotland which presented the Highland Council Pension Fund Annual Report on the 2012/13 Audit.

In connection with this item Members were advised that the Audited Pension Fund Annual Report and Statement of Accounts for 2012/13 was now available on the Pension Fund website.

It was reported that an unqualified opinion had been given that the financial statements of the Highland Council Pension Fund for 2012/13 provided a true and fair view of the financial transactions during the year ended 31 March 2013, and of the amount and disposition of its assets and liabilities as at that date.  It was confirmed that the reported weaknesses in the accounting and internal control systems reported in last year’s audit regarding the operation of separate bank accounts for the Fund had been addressed in 2012/13. 

It was noted that a copy of the Action Plan arising from the Audit which identified three key risk areas and planned management action was attached as Appendix B to the report.

Members welcomed the Annual Report and asked that the officials and the relevant external advisers be thanked on the excellent report received.   

In regard to the outlook for the future a point was raised about the importance of Members recognising the importance of training to enable effective scrutiny, particularly in the context of the reforms to the Local Government Pensions Scheme in Scotland.

The Committee:-

i.  NOTED the External Auditor’s Report for the year ended 31 March 2013
    and AGREED the response to the findings and the completed Action Plan;
    and
ii. NOTED the Pension Fund’s Annual Report and Statement of Accounts for
    the year ended 31 March 2013.

6.  Training Policy and the CIPFA Knowledge and Skills Framework
Frèam Trèanaidh

There was circulated Report No. PC-17-13  (87kb pdf) by the Director of Finance which set out an updated training policy for the Highland Council Pension Fund, applying to both officers responsible for supporting the Fund, and Members of the Pensions Committee and Investment Sub-Committee charged with governance and decision making.

The Finance Manager confirmed that he would arrange for the CIPFA Knowledge and Skills Framework for Members of Pension Committees, which was incorporated in the report, to be circulated separately to Members. He advised that this set out six core areas which Members and officers could use to identify any personal training needs.

In discussion the importance of Members taking advantage of and attending both internal and external training events was reiterated.

The Committee:-

i.  AGREED the CIPFA Code of Practice on Public Sector Pensions Finance
    Knowledge and Skills and supporting Framework be adopted through
    agreement of the statements on Appendix A to the report;
ii.  AGREED the training policy and programme for 2013/14 set out within the
    report;
iii.  NOTED the training delivered to date on pension fund finance matters; and
iv. NOTED the self-assessment framework at Appendix B to the report which
    Members could use to identify any personal training needs.

7.  Investment Sub Committee: Minutes of Meeting
Fo-chomataidh Tasgaidh: Geàrr-chunntas na Coinneimh

There was circulated Minutes of meeting of the Investment Sub-Committee held on 22 August 2013 (37kb pdf) the terms of which were APPROVED.