The Local Pension Board of Isle of Wight Council met on Wednesday 19 June 2024 to discuss several key issues, including ongoing staffing capacity challenges within the Pensions Administration Team, the removal of a board member due to non-attendance, and the approval of the board’s draft annual report for 2023-24.

Staffing Capacity Issues in the Pensions Administration Team

The board reviewed the draft minutes of the Pension Fund Committee meeting held on 14 February 2024 and received an update from the Director of Corporate Services on the ongoing staffing capacity issues within the Pensions Administration Team. Recruitment activities are underway to fill four vacant posts, with an estimated timeframe of three to four months. The team, supported by external consultants from Hymans Robertson, is prioritising tasks to maintain support for scheme members and identify areas for efficiency improvements. The cost of external consultancy is £29,000 per month.

Concerns were raised about the sustainability of relying on agency staff, the ability to offer competitive salaries, and the disparity in mainland pay. The Director of Finance and Section 151 Officer provided an update on the upcoming departure of the Pension Fund Manager and the steps being taken to address this, including the appointment of a new Pension Governance Compliance Officer and recommendations from the Barnett Waddingham review.

The board expressed concern that the loss of administration staff and the departure of the Pension Fund Manager were not being prioritised as urgent issues by senior officers. It was agreed that the board would meet informally in a week’s time to discuss the Barnett Waddingham structure options report and formulate comments for the Pension Fund Committee. The board also requested details of current job adverts, job descriptions, and comparative pay and benefits with other managing authorities.

Removal of Board Member Due to Non-Attendance

The board received a report on members’ attendance at meetings in 2023-24 and noted that Neil Cain had not attended a meeting since April 2023. The chairman had contacted Mr Cain to remind him of the board’s terms of reference and role profile, which state that all board members should endeavour to attend all meetings. It was proposed and agreed that Neil Cain be given notice of his removal from the board and that a selection process for a replacement member be commenced as soon as possible.

Draft Annual Report 2023-24

The board considered the draft annual report for 2023-24, which highlighted the risk to the fund in being unable to fulfil its statutory duties due to an overreliance on key members of staff, associated reputational risks, potential backlogs, and the lack of progress on the fund’s climate reporting approach. It was agreed that the report would be presented to the Pension Fund Committee at its next meeting in May 2024.

Complaints and Internal Dispute Resolution Process

The Pension Fund Manager presented the updated complaints and internal dispute resolution process. The board agreed to the process for consultation on the proposed changes and recommended the draft revised procedure to the Pension Fund Committee for adoption, subject to minor grammatical amendments.

Conflicts of Interest Policy

A new policy on conflicts of interest was proposed, based on the current code of conduct for councillors and inclusive of specific potential conflicts arising from the operation of the pension fund. The board agreed to assign the responsibility for maintaining and publishing registers of interest to Democratic Services, supported by the Pension Governance Compliance Officer. The policy was recommended to the Pension Fund Committee for adoption, subject to minor grammatical amendments.

Governance Compliance Statement 2022-23 Action Plan

The board reviewed the governance compliance statement action plan for 2022-23 and noted progress against the three identified areas of non-compliance. The board approved the complaints and internal dispute resolution policy and the fund-specific conflicts of interest policy for recommendation to the Pension Fund Committee.

Report from the Pensions Administration Team

The Pensions Manager presented a report on administration statistics, employer compliance, complaints, and breaches of the law. The team continues to face capacity issues, with another member resigning since the last report. External consultants from Hymans Robertson have been assisting with key projects. The board expressed its thanks to the team for maintaining the service.

Risk Register Update

The Pension Fund Manager presented the revised risk register, noting an increase in the score of five risks and the resulting six red risks. Each risk will include a future trend statement for additional context. The board agreed to the updated risk register and recommended it to the Pension Fund Committee for adoption.

Knowledge and Understanding

The board reviewed the record of members’ training and the Hymans Robertson Knowledge Progress Assessment report. It was agreed that the board would meet with the Pension Governance Compliance Officer to discuss the initial training plan for 2024-25 and agree on development priorities.

Other Matters

The board expressed sincere thanks to the Pension Fund Manager for her work on behalf of the pension fund during her time in post.

For more details, you can refer to the minutes of the meeting.