A report of the Strategic Director Transformation and Resources sought the Pensions Committee’s comments on the proposed composition and terms of reference of Wirral Council’s Pension Board.

It was reported that the final Governance Regulations were still awaited from the Department for Communities and Local Government (DCLG). However, due to the short timescale to implement the board, it was necessary to put arrangements in place to ensure compliance with the regulations.

A first draft of the proposed Terms of Reference for the Pension Board, Member Role, Specification and Appointment Process was attached as appendices to the report and amended recommendations including amendments to section 3 of the Board’s Terms of Reference were circulated to the Committee. Members were advised that the Committee’s comments on this draft could be incorporated into a revised draft which may be subject to review upon the issue of the final regulations and the Shadow Scheme Advisory Board’s guidance.

Members were informed that the final draft would be considered by the Head of Legal and Democratic Services before submission to Council.

The Public Service Pensions Act 2013 required each Local Government Pension Fund to set up a Local Pension Board. DCLG had been consulting on the regulations relating to the governance framework for the reformed scheme and the Pension Committee had been apprised of the recent consultation, which ended on 21 November 2014, at its last meeting.

The final regulations were expected to be laid in January 2015 and the supporting Shadow Scheme Advisory Board Guidance was also expected in January. The final guidance would take account of any changes made to the regulations and the Pension Regulators Code of Practice on the Governance and Administration of Public Service Pension Schemes.

Members were also informed that administering authorities were statutorily required to have approved the composition and terms of reference of the Pension Board by 1 April 2015.

Peter Wallach, Head of the Pension Fund, informed the Committee that the Board was not a committee set up under the Local Government Acts, but a specific creation of the relevant regulations under general public sector pension legislation; therefore requirements such as political balance did not apply. The Board was not a decision making body, its role was to "assist" the Administering Authority/Scheme Manager, with the Pension Committee retaining responsibility for all decisions in respect of the management of investments and the administration of the LGPS. He clarified that the reference under 2.18 of the report to the special responsibility allowance was in relation to the allowance of £2751 p.a. paid to the Chair of Pensions Committee, not to members of the Committee. 

Members were advised that there were restrictions on which Wirral Council Members or officers may be members of the Board in order to prevent a conflict of interest. It would not be possible to sit on both the Pension Fund Committee and the Pension Board, whilst no officer involved in the running of the Fund could be either an employer or employee representative. It was possible to appoint other Board members who did not fall into either the employer or employee category, for example an independent Chair. The roles of the various governance bodies were set out in the report together with the proposed composition of the Wirral Pension Board, the appointment process, remuneration of Board Members and the Terms of Reference and the Timetable for the Board.

The Chair thanked the officers for the considerable amount of work involved and for clarification informed members of the Committee that, given the time restraints, as confirmation was still awaited from Government any changes necessary would be presented to the Chair before being presented to the Council on 16 March, 2015.

Resolved – That;

1. Pensions Committee agrees and recommends to Council:

a) the establishment of a Pension Board pursuant to regulations (The Local Government Pension Scheme (Amendment) Regulations 2014) in accordance with the Terms of Reference set out in appendix1, subject to the membership being agreed by Council and the Terms of Reference being amended to confirm that the Board shall be quorate providing a minimum of 4 members are present.

b) the Pension Board shall have the authority to do anything which is calculated to facilitate, or is conducive or incidental to, the discharge of any of its functions.

c) the establishment of a selection panel by the Council in accordance with appendix 3 to consider and assess applications received and undertake interviews. The selection panel is to make recommendations to Council with regard to appointment of members to the Board.

d) the Head of Pension Fund be authorised to implement the administrative arrangements required to undertake a recruitment exercise necessary for the selection and appointment of members to the Board.

e) the definition of independent member for the purposes of the Board shall be agreed as:

·  not a current elected member or employee of a participating scheme employer

·  has not been an elected member or employee of a participating scheme employer in the past 5 years

f) in respect of the two active member representatives, the initial appointment to the Board for one of the representatives shall be for a term of 6 years and the other for 4 years; that in respect of the two representatives of local authorities, Police/Fire/Transport authorities and Parish Councils, the initial appointment to the Board for one of the representatives shall be for a term of 6 years and the other for 4 years.

g) the Pensions Committee (and the Heads of the Pension Fund and of Legal and Member Services after consultation with the Chair of the Pensions Committee prior to the meeting of the Council in March 2015) may recommend to Council changes to the Board and its Terms of Reference having regard to the final form of regulations and statutory guidance.

2. the Selection Panel’s Terms of Reference as set out in Appendix 3 shall be that:

·  it shall comprise 3 elected members

·  it shall not consist of current Pensions Committee members

·  there shall be two advisors to the selection panel: the Head of Pension Fund and a representative from the Fund’s external auditors

3. the following amendments be made to the Board’s terms of reference set out in appendix 1.

a) Section 3 “Members of the Board shall cease to be a member of the Board if they do not attend two consecutive meetings and fail to tender apologies which are accepted by the Board” be substituted for “Other than by ceasing to be eligible as set out above, a Board member may only be removed from office during a term of appointment by the majority agreement of all the other members. The removal of the independent member requires the consent of the Scheme Manager”.

b) Section 3 the following shall be added: “ In the event of the independent member not being available for a Board meeting, a Vice Chair for that meeting shall be determined by the Board members”.