Board11thMay2016
Business & Administration CommitteePF 1730Item No.6.2
Purpose and summary
To consider the minutes and action points of the Business & Administration Committeemeeting held on the 21st March 2016. Minutes are presented in draft form and are subject to further comment.
Key issues
- The Committee noted that the meeting was of importance due to the approval required for the legal documents of the partnership.
- The Investment Committee met on 16th March and agreed that subject to the resolution of a number of queries, the committee was content with the direction of travel of the Advisory and Management Agreement and Asset Class Mandates.These were approved by the Investment Committee on 31st March.
- The Committee noted that the Financial Conduct Authority (FCA) had confirmed that the authorisation could take place on the 1st April or in the weeks following and were comfortable with the Partnership’s current preparation for launch.
- The Committeediscussed in detail the assurance statements from Clifford Chance and received a verbal presentation from Hywel Robinson. It was noted that Clifford Chance had reviewed all legal documents from the LPFA viewpoint and was comfortable with these; the final documents would also be reviewed once finalised.
- The Financial Model was reviewed by PwC which was prepared solely to demonstrate the viability of LPP as a business.. It was noted that LPP Administration Ltd had already targeted a reduction of savings and additional revenue.
- The Committee approved the recommendation to adopt the matters reserved by the Board and the delegation of authority to the Chairman and the Managing Director to complete wider changes the Constitutional Document to reflect the new partnership arrangements.These had been approved and are represented for approval under the governance report.
- The Committee noted the update on the Local Pension Board meeting in December 2015 and March 2016.
- The Chief Investment Officer provided background information on the Stewardship Committees activities and formation. The Committee noted that Francis Deakin was employed by the Lancashire County Pension Fund and was acting as LPFA’s Stewardship Officer.
Recommendation
Boardisasked to:
[1]Agree the decisions and actions set out in the draft minutes of the
meeting held on 21st March 2016.
Report date: 3rd May 2016Lead Officer: Committee Chair
Business & Administration Committee
Minutes of the meeting
held on 21st March 2016, 8.30am
G.04, 169 Union Street, SE1 0LL
Present
Committee membersStephen AlambritisChair of the Committee
Skip McMullanCommittee Member
Sir Merrick CockellCommittee Member (until 9.50)
ObserversTerence Jagger Board Member
Tamlyn Nall Board Member
Kerry Adby Board Member (via conference call)
Mike O’DonnellBoard Member (via conference call)
Principal OfficersSusan Martin Chief Executive
Mike AllenDirector of Pensions
Chris RuleChief Investment Officer
Angela SmithChief Risk and Finance Officer
In attendance
OfficersGreg SmithHead of Governance and Strategy
MinutesLoretto LeavyInvestment Company Secretary
Rebecca PittTrainee Corporate Advisor
External visitorHywel RobinsonClifford Chance (Item 1 & 2 only)
ApologiesNone received
Skip McMullan declared his appointment as the shareholder representative non-executive director of LPP. No other new declarations of interests were received.
- BA049 INTRODUCTORY MATTERS
Submission
The Executive report BA049, reporting the minutes of the meetings held on 17th November 2015 and 26th January 2016, and Quarter 3’s operational performance of the LPFA and Agency funds, was submitted to the meeting.
Discussion
The Chair welcomed all Board members to the meeting, including Terence Jagger, Tamlyn Nall, Kerry Adby and Mike O’Donnell as observers to the meeting. Hywel Robinson from Clifford Chance was also in attendance to answer any questions regarding the assurance statements.
The Committee noted the importance of the meeting due to the approval required for the legal documents under item 2.
The Committee reviewed and approved the minutes and action points of the meetings of 17th November 2015 and 26th January 2016. The Committee noted the LPFA and Agency funds Quarter 3 performance review (annex 1).
Decision
B&A Committee:
[1]Approved the minutes of the meeting on 17th November 2015, as reported in draft to Board on 10th December 2015,as a true and accurate record.
[2]Approved the minutes of the meeting on 26th January, as reported in draft to Board on 10th February 2016,as a true and accurate record.
- BA050– PARTNERSHIP UPDATE
Submission
The Executive report BA050,providing the opportunity for the Committee to endorse final entry into the partnership with Lancashire County Pension Fund from 1st April 2016, was submitted to the meeting. The assurance statements from Clifford Chance and PwC, loan facility detail and employer risks services schedule were also submitted to the meeting.
Discussion
[This section is confidential and will not be published]
Decision
B&A Committee:
[1]Approved the final entry into the Local Pensions Partnership from 1st April 2016 having considered and accepted the risks as outlined by Clifford Chance.
[2]Approved provision of the loan facility on the agreed terms.
[3]Noted the assurance statements provided by Clifford Chance and PwC (PwC statement is provided on a non-reliance basis).
[4]Noted the frequently asked questions and the commitment in place to remedy any operational or legal issues beyond 1st April 2016.
- BA051– GOVERNANCE UPDATE
Submission
The Executive report BA051,providing an overview of the main changes to the Constitutional Document – the matters reserved to the Board and seeking delegated authority to the Chairman and Managing Director for the remaining changes of the Constitutional Document, was submitted to the meeting.
Discussion
The Investment Company Secretary provided a summary of the Governance arrangements for the Board and its Committees post-April 2016. It was confirmed that the forward agenda planning and matters reserved were cross referenced with the Shareholders matters reserved and other shareholder agreements. The Investment Company Secretary outlined the proposal of reviewing the constitutional document in two parts, 1) Updating Committee terms of reference, matters reserved to the Board and changing titles; 2) reducing the word count of the interests and conduct areas but keeping the content. The Committee approved the delegation of authority to the Chairman and Managing Director of LPFA for the factual changes of the Constitutional Document and to adopt the matters reserved to the Board.
Decision
B&A Committee:
[1]Approved the recommendation to adopt the matters reserved to the Board.
[2]Approved the delegation of authority to the Chairman and the Managing Director to complete wider changes to the Constitutional Document to reflect the new partnership arrangements.
- BA052- EMPLOYER ISSUES, LGPS AND GLC DEFICIT UPDATE
Submission
The Executive report BA052, reporting the progress and issues arising from the implementation of employer security, a follow up from the 2013 Fund Valuation, and specific employer issues, was submitted to the meeting. An update on the latest position regarding former GLC/ILEA liabilities and a summary of issues covered in the last Local Pension Board meeting, was also submitted.
Discussion
[This section is confidential and will not be published]
Decision
B&A Committee:
[1]Noted the content of the report.
- BA053– STEWARDSHIP COMMITTEE UPDATE
Submission
The Executive report BA053, providing an overview of the Stewardship Committee’s engagement activity and overall stewardship approach, was submitted to the meeting.
Discussion
The Chief Investment Officer (CIO) provided background information on the Stewardship Committee and its formation.
Sir Merrick Cockell left the meeting at 9.50.
The Committee noted that Frances Deakin was employed by LCPF and was acting as LPFA’s Stewardship Officer. Her current role was to build relationships with other funds and to review policies in line with the Stewardship Code.
Decision
B&A Committee:
[1]Noted the contents of the report, including Annex 1 and 2.
There being no further business the Chair declared the meeting closed at 09.57.
Signed in draft form for submission to Board
Stephen Alambritis11 May 2016
Chair of the Business and Administration Committee
Meeting / Matters arising / Lead / Due by / ProgressBA 21.03.16 / PARTNERSHIP UPDATE
All updated documents would be supplied to Clifford Chance for final review.
The Committee requested a revisit of the legal agreements post-April 2016. / GS
GS / 31/3/16
Q2 2016 / Complete.
This would be progressed over Q2. *
GOVERNANCE UPDATE
The Committee approved the delegation of authority to the Chairman and Managing Director of LPFA for the factual changes of the Constitutional Document and to adopt the matters reserved to the Board. / SMC/ MD / 31.03.16 / Complete. An updated version is included within the papers for approval.
BA 26.01.16 / BA 048 – LANCASHIRE PARTNERSHIP UPDATE
Work will continue on the documents ahead of the Board meeting in February and 3rd March.
Further review of additional insurances available.
Full review of liabilities and where they appropriately sit. / GS
AS
GS / 03/03/16
03/03/16
03/03/16 / Complete.
Complete. All insurances are in place and documented in the Insurance and Liability Agreement.
Complete.Embedded within the Insurance and Liability Agreement.
*this action would be rolled forward as part of the Board actions.