Agenda item

Report FSD16034

The Committee received a further update from the Director of Finance on the “Pooling Options” report considered at the previous meeting of the Sub-Committee where details of the pooling options consisting of the London Collective Investment Vehicle (CIV) and ACCESS were considered.  Members agreed that the Director of Finance, in consultation with the Chairman and Vice-Chairman submit a formal first stage consultation response incorporating the views expressed at the meeting and reflecting the outcome of a follow up meeting with the London Borough of Wandsworth and Kent County Council.  The outcome of these meetings was reflected in the consultation responses submitted and attached as Appendix 2 to the report.  The consultation response was submitted on 19^th February 2016 and also covered proposed changes to pension regulations which enabled a direction from the Secretary of State in terms of where to invest in the future and powers for the Secretary of State to intervene if Councils did not pool their investments.  The consultation response from the Council referred to being minded to join the London CIV but to retain the option to be able to join more than one pool.  It also included Bromley’s concerns about the affordability of the pension scheme and issues relating to outsourcing although this was outside the scope of what was required in the response.  In March 2016, the Minister for Local Government wrote to the Chairmen of every Pension Committee to outline issues raised for individual submission and confirming that individual funds could not join multiple pools.  He also revealed the preference for pools to be set up and regulated through the Financial Conduct Authority (FCA) which prevented a lower cost “joint committee” option.

Apart from Bromley, all other London Boroughs had joined the London CIV.  The report recommended that the Council joined the London CIV on the basis of an expected lower cost option of joining; it was already FCA regulated with potential for earlier achievement of savings in management fees and had an agreed commitment of one member one vote.

Members of the Sub-Committee agreed that the following additional recommendation should be added to the report:

“That Officers be authorised to provide the formal recommendation to Council on 4^th July 2016 to join the London CIV following completion of specific legal and technical processes.”

In response to questions from Members of the Sub-Committee, the Director of Finance confirmed that once the Local Authority had joined one pool it would not realistically be possible leave in order to join another pool.  In addition to this, revised statutory regulations empowered the Secretary of State to intervene if Local Authorities failed to join a pool. 

In response to a question from a Member of the Local Pensions Board, the Director of Finance explained that the Local Authority would retain control of asset allocation and the requirement to meet the pension fund deficit .

Members of the Sub-Committee discussed the arrangements for repayment of the pension fund deficit and . the Director of Finance advised that the proposals, following the actuarial triennial valuation, would be considered at the February 2017 meeting of this sub-committee. 

RESOLVED: That

(a) the General Purposes and Licensing Committee recommend to Council that the Council joins the London Collective Investment Vehicle (CIV); and

(b) Officers be authorised to provide the formal recommendation to Council on 4^th July 2016 to join the London CIV following completion of specific legal and technical processes.