Agenda item

3.25

Report by the Director for Finance.

At their meeting on 6 September 2019, the Pension Fund Committee considered potential changes to their Constitution.  The recommended changes are outlined in this report.

The Committee is RECOMMENDED to endorse the recommendations agreed by the Pension Fund Committee as set out below and RECOMMEND them to Council:

a)            Ask Officers to draw up a Training Policy consistent with the proposals contained in the annex and summarised in paragraph 4 of this report;

b)           Agree to amend the Pension Fund Committee Governance Policy to mandate all Members of the Pension Fund Committee to complete training in line with the Training Policy;

c)            Amend the constitution so that no substitutions are allowed for Members of the Pension Fund Committee;

d)           Ask Officers in consultation with the Chairman, Deputy chairman and Opposition Spokesperson of the Pension Fund Committee to amend their Governance Policy/Terms of Reference to ensure the independence and impartiality of the Pension Fund Committee Members is assured; and

e)            Make the appropriate changes to the Terms of Reference and Constitution to formalise the new governance arrangements.

Sean Collins summarised the report.  The Pension Fund Committee (PFC) was in full agreement that training be required for Members of the PFC to ensure compliance with governance standards.  At their meeting in September they discuss the issue of substitutes at PFC meetings and considered two options proposed by officers: that no substitutions be allowed or that only named substitutes be allowed who have completed the training.  The option not to allow substitutes was adopted as a recommendation by six votes to four.  It was up to the Audit & Governance Committee to recommend this to Council or to take a different view.

Members were agreed with recommendations a), b), d) and e).

Councillor Roz Smith, a Member of the PFC, stated that she could not see any reason why substitutes should not be allowed provided they had completed the training.  Members might miss meetings due to unforeseen circumstances.  There were only two Members of the PFC representing District Councils and she thought that it was particularly important that they should be able to be substituted.

Councillor Charles Mathew, a Member of the PFC, believed that Members of the PFC needed a sophisticated knowledge of pension law and investment.  Substitute members – even if trained – could muddy discussions as a build-up of understanding is important.

Councillor Glynis Phillips asked if items on a PFC agenda were usually urgent or could a meeting be deferred if it looked like attendance was going to be poor.  Sean Collins responded that officers can be delegated to make urgent decisions.  Most items on an agenda could be deferred if necessary.

The Chairman suggested trialing no substitutes for one year.  Councillor Paul Buckley disagreed saying that the situation whereby District Council representatives could not attend might not occur in a one-year period.  He suggested as a compromise that substitutes only be allowed for District Council representatives.

The Chairman proposed to put the recommendations from the PFC to a vote.  If the vote was not passed, he would put alternatives to a vote.

The recommendations were adopted by 6 votes to 2.  Councillor Roz Smith asked for it to be minuted that she was only opposed to recommendation c) and supported the other recommendations.

RESOLVED: to endorse the recommendations agreed by the Pension Fund Committee as set out below and RECOMMEND them to Council:

a)           Ask Officers to draw up a Training Policy consistent with the proposals contained in the annex and summarised in paragraph 4 of this report;

b)           Agree to amend the Pension Fund Committee Governance Policy to mandate all Members of the Pension Fund Committee to complete training in line with the Training Policy;

c)           Amend the constitution so that no substitutions are allowed for Members of the Pension Fund Committee;

d)           Ask Officers in consultation with the Chairman, Deputy chairman and Opposition Spokesperson of the Pension Fund Committee to amend their Governance Policy/Terms of Reference to ensure the independence and impartiality of the Pension Fund Committee Members is assured; and

e)           Make the appropriate changes to the Terms of Reference and Constitution to formalise the new governance arrangements.