• The dynamic asset al ocation plan was up and running.
• The Committee held its annual strategy day which included:
o A presentation from each head of investment
o A technology update and significant progress has been made on process improvements and
reduced reliance on spreadsheets.
o A range of presentations including on inflation and global trends.
• Performance is strong.
• The Committee reviewed and recommends approval of a change to the Ethical Investment Policy.
The Board, on recommendation of the Investment Committee:
•
Approved the proposed change to section 7 of the Ethical Investment Policy.
•
Noted that allocation of exposure deviations from the strategic asset allocations (SAA) are to be
more customised to each scheme account.
The Board had a general discussion about investment staff and auditing of models.
9(2)(a)
and Ms Oakley left the meeting at 10.35 am.
BOARD ONLY SESSION
The Chair informed the secretary that the Board:
• Agreed Board Committee membership which would be further reviewed with two new members
starting
• Discussed the agenda for the day
• Discussed final pay for CEO, with the exception of the “at risk” component that was discussed today
• Discussed the revised structure of the CIO “at risk” pay.
4. Propero Report
This item was deferred until later in the day.
5. Chief Executive’s Report
Mr Pickering and Mr Tully joined the meeting at 11.45 am.
Mr Pickering advised the secretary that the following matters were discussed:
• Background context for the PHAS paper on the agenda.
• Board Strategy Day update.
• Brand work – overview of next steps and connection to Board Strategy Day conversation.
• Rehabilitation performance update.
OPERATIONAL REPORTING
Mr Mil er left the meeting at 12.30 pm. Mr Fletcher, Ms Powell, Mr Raubal, Ms Champness, Mr Healy,
Ms Oakley, 9(2)(a)
and 9(2)(a)
joined the meeting.
6. Performance Update
Mr Healy and 9(2)(a)
spoke to the paper. The Board made a number of enquiries and discussed a
range of matters including:
• The “return to independence for those not in the workforce” measure. Management advised that:
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o This is a measure of the proportion of clients who are no longer receiving non-weekly
compensation entitlements 12 months after registration. It is reported as a 12 month rolling
average.
o The measure incorporates the status of new registrations over the span of the last 12
months so, the impact of last year’s alert level restrictions on the measure have not been
fully realised.
o During the lockdown months there was a temporary drop in rehabilitation service utilisation
leading to a period of improvement in the results. However, since June 2020 when most
services resumed and clients re-engaged with their rehabilitation, this measure has been
adversely impacted.
o The performance of new claims which occurred during national lockdown last year are
anticipated to drive declining performance over the next 3-5 months. Delays accessing
health services during national lockdown (e.g. elective surgery) would have extended
rehabilitation timeframes beyond the one-year threshold this measure is based on.
o Performance is expected to gradually decline into the first quarter of 2021/22, and from then
on, a positive trajectory is anticipated to 2021/22 target levels.
• Whether there could be outsourcing or offshoring opportunities that could assist with better
solutions and service standards for clients at better costs, noting the increase in claims costs and
potential shortages of resources. Management noted that telehealth services are available and
more needed to be explored in terms of bringing together the importance of therapeutics (including
senses of safety and security), clear clinical advice and customer wil ingness to engage.
• Increased channels for Maori are being utilised but note yet translating to an uplift in claims.
• The Board expressed appreciation to Ms O’Connor’s team.
ACTION: The Board requested that Management provide further information about policy settings and
good practise in terms recovery compared to entry into the OCL when the next report is made on
sensitive claims.
The Board noted:
• The claims cost performance; and
• The operational and financial performance.
7. Quarterly Enterprise Risk and Compliance Report
Mr Mil er re-joined the meeting at 12.50 pm.
Mr Raubal introduced the paper and highlighted:
• The OCL; and
• Increased confidence and promising signs with ECP for benefits realisation, while risk remains
present.
The Board enquired about:
• Strategic consideration of a situation where there was an over-performance of investments and how
to balance that with levy considerations. Management advised this was unlikely given interest rates
and caps on levies but that there was the potential to step in if such concerns ever arose.
• How Covid-19 might impact metrics in the future.
• The potential for deeper dives on mental health, Maori strategy and other matters in the future.
The Board noted the Quarterly Enterprise Risk and Compliance Report.
The Board stopped for lunch at 1.00 pm. The walkaround the Justice Centre was cancelled.
ACTION: Reschedule a walk around or equivalent for the Board.
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The meeting resumed at 1.30 pm with all Board members except Dame Rebstock present. Mr Tully
and Ms Oakley were also present.
4. Propero Report
The Board was supportive of the insights in the Propero report and discussion included:
• The desire to improve papers so they increase insight rather than information and, are shorter.
• That legal review and the Chief General Counsel support these aims.
• That templates prompt the inclusion of all relevant matters including financial input.
• That CEO reports focus on strategy and what is important and not where time is spent.
• That the performance and operational reports are simplified as they are currently repetitive.
• Opportunities for the Board to discuss further what good looks like, the approach to meetings and
how value is added to Management, including working with a new CEO once appointed and on
resetting the approach to engagement with key external stakeholders.
Dame Rebstock re-joined the meeting at 1.55 pm.
• The July strategy day and a potential further strategy session in September supported a journey
over the next six months or so for the Board to form ahead.
The Board noted the Propero Report.
BOARD PAPERS
8. Social Unemployment Insurance Update
Ms Champness, Mr Healy, Ms Powell, Mr Raubal, 9(2)(a)
and Mr Fletcher joined the meeting at
2.00 pm.
Ms Champness introduced the paper and updated the Board on:
• ACC’s recent discussions with officials on potential design settings.
• Risks to the ACC scheme and how to prepare if there is to be a new scheme.
• Indicative timings for consideration of, and consultation on, a potential new scheme.
Mr Pickering re-joined the meeting at 2.10 pm.
The Board’s discussion included:
• What administration of a new scheme might involve and what might be similar or different to the
current scheme and how that could impact the ability to influence outcomes.
• How incentives of a range of stakeholders may interplay and how success might be defined, that it
varies in other countries and can be impacted by other policies eg: wage scarring, labour market
policies and employment contracts.
• Whether a new scheme might be branded as ACC or separate.
• The engagement activity and process currently and, how ACC might be appropriately and actively
involved and funded.
• That there is a lot of detail about how a potential new scheme that has not been outlined and
discussed including in the areas of IT, levies and asset and liability matching.
Mr Pickering left the meeting at 2.40 pm.
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ACTION: The Board requested that Management present a work programme to the Board to support
Board participation on the design and execution of a potential new social unemployment insurance
scheme.
The Board:
•
Noted the update on the Government’s proposed social unemployment scheme.
•
Delegated the ability to discuss these matters with the Minister to Mr Mil er and the Hon. Maharey.
9. Levy Narrative & Approach
9(2)(a)
joined the meeting at 2.45 pm.
Mr Raubal introduced the paper and sought the Board’s input to inform the approach to consultation.
The Board discussed and provided feedback which included the following:
• Suggestions and the need to improve clarity and simple communication to the public.
• The importance of the ability to change levies and ideally avoid shocks while ongoing increases
occur given increasing costs and past reductions.
• That a sensitivity analysis of the potential for future surpluses (eg: if interest rates rise) and how that
might inform the appropriate narrative.
• The need to consider the future implications around motor vehicle related levies that can be
foreseen to significantly reduce in contribution.
• That Management wil present a base-case around how fund performance interplays with levies.
• Whether there is a focus group to assist with translation of the consultation material and
communication.
The Board:
•
Agreed to the approach to consultation.
•
Noted the layered approach to the design of the consultation pack.
•
Discussed the draft levy rates narrative (at annex 1).
•
Noted the Minister has requested an ‘educative’ approach to consultation and that ACC was to
guide levy payers through a simple and consistent story for each proposal.
•
Noted that Management are engaging with MBIE on their request to explore an alternate approach
to increasing the impact of a fatality in experience rating and would keep the Board updated through
weekly reporting.
•
Noted the consultation package and supporting materials are being finalised for approval in July
2021.
9(2)(a)
and Mr Raubal left the meeting at 3.20 pm.
10. Young Driver Business Case
Ms O’Connor, 9(2)(a)
and 9(2)(a)
joined the meeting at 3.20 pm.
The Board had no questions and:
•
Noted young drivers (aged 16-24) that participate in Drive are 40 percent less likely to have an
accident resulting in an injury than young drivers that have not participated in Drive.
•
Noted in the last three years the number of Drive users has increased from 40,000 to more than
80,000. 15% identify as Māori.
•
Noted Drive’s return on investment of:
o $2.91
for every $1 invested (against target of $2.48) for the current three-year investment
period – ending 30 June 2021.
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o $3.02 for every $1 invested is expected for the proposed three-year investment period –
ending 30 June 2024.
•
Noted that funding for the three-year investment for Drive wil come from the ACC Injury Prevention
budget.
•
Noted that as a partner in Drive, Waka Kotahi expects to invest approximately $7.71m alongside
ACC investment during the three years from 1 July 2021.
•
Noted that Board approval is required in accordance with ACC Corporate Delegations Schedule B,
as the whole-of-life investment now exceeds $30 mil ion.
•
Approved $8.962m additional investment to continue delivery of the Drive Programme until 30
June 2024.
9(2)(a)
and 9(2)(a)
left the meeting at 3.22 pm.
11. Public Health Acute Services (PHAS) Annual Service Agreement 2021/2022
The Board took the paper as read and:
•
Noted that the Minister of Health and Minister for ACC wil be requested to approve and sign the
2021/22 Public Health Acute Services (PHAS) Agreement and joint Health Report (the briefing) by 1
July 2021.
•
Noted that the ACC contribution for the 2021/22 PHAS Agreement is $670.912 mil ion, which is a
12.35% increase on last year’s amount of $597.140 mil ion.
•
Noted that the $670.912 mil ion is $20.5 mil ion more than is allowed for in the claims cost budget
for 2021/22. This wil result in a variance against the budget throughout the 2021/22 year, which
Management wil look for options to offset.
•
Noted there is an agreed calculation methodology, which covers demographic and cost pressures,
and changes in pricing for the services under the PHAS Agreement.
•
Noted that the percentage increase has been moderated – it is lower than the actual increase in
district health board costs, but moves to decrease the gap between cost and changes in pricing for
the services covered under the Agreement.
•
Noted that ACC is working with the Ministry of Health on improving the PHAS data that ACC can
access, and ACC wil work with the Transition Unit on any interactions with PHAS and Government
health reforms.
•
Endorsed the Public Health Acute Services Agreement 2021/22 and the joint Health Report, which
are in a form that reflects the information in this paper, for forwarding to the Minister of Health and
the Minister for ACC to approve.
•
Delegated authority to the Chief Executive to sign the joint Health Report.
Ms O’Connor left the meeting at 3.23 pm.
12. Te Kahu Business Case
Mr Healy introduced the paper.
The Board enquired about the procurement process. Management confirmed that the market was
tested for solutions and partners and that procurement had been undertaken in accordance with the
Government Procurement rules. The Board questioned the further investment and benefits.
The Board:
•
Approved a total budget of $26.3 mil ion for the delivery of Release 1 and 2 by March 2022,
excluding contingency.
•
Noted that total budget includes the Executive-approved budget to date of $9.286 mil ion which
covers project activity to 30 June 2021. Funding to date has been for the Initiate Phase of the
project which covers planning and design, and early commencement of Build activity.
•
Noted an estimated contingency funding of $4.5 mil ion for Release 1 and 2. This wil be governed
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by the ACC Board and only made available to the Te Kahu project on specific submission.
•
Noted the total funding investment to complete full delivery of the project is estimated between $32
to $37 mil ion over the financial years 2020 – 2023. This includes Release 1, 2 & 3, and
contingency.
•
Noted the management forecast for Releases 1 & 2 of project is higher than budgeted in FY22
Enterprise Change Portfolio, (ECP) baseline budget, creating additional pressure in the ECP FY22
budget. Management wil monitor progress and take action where necessary to manage within the
overall ECP financial year budget, or if required raise with the ACC Board.
•
Noted the management forecast for the project as included in ICIP Financial Forecast Update
Board Paper November 2020 was estimated at $20 mil ion. Management is stil confident that the
total ICIP forecast will remain within $619 mil ion.
•
Noted that the Chief Executive has endorsed the Te Kahu Implementation Business Case for
submission to the ACC Board.
13. Strategic Platform Adoption (SPA) Business Case
Mr Fletcher introduced the paper.
The Board:
•
Approved the drawdown of $8.814 mil ion (exclusive of contingency) FY21/22 and $0.554 mil ion
for FY22/23 to deliver the migration and decommission phase of the data centre exit.
•
Approved the contingency sum of $2 mil ion in FY21/22 should additional moves be required by
dependent initiatives.
•
Approved that the contingency sum to be governed by the Chief Executive, and only made
available on specific submission to the Enterprise Change Authority.
•
Noted the total funding investment to complete full delivery of the project is estimated at $18.5
mil ion (including contingency) over the financial years 2020 – 2023.
•
Noted the contents of this paper.
14. D&O Insurance
Mr Healy introduced the paper. He advised that:
• The D&O insurance was appropriate having worked with legal advice, making some minor
clarifications and that an additional cost of $100,000 would be incurred.
• If the Board would like to consider other forms of insurance (eg: cyber), he could bring back other
proposals.
The Board:
•
Noted that D&O policy cover was sufficient.
ACTION: Management to present other insurance (such as cyber) options to the RAC for consideration.
TECHNOLOGY CONTRACT RENEWALS
15. Datacom
Mr Fletcher introduced the paper and responded to the Board’s questions, including on financials.
The Board:
•
Approved entry into a revised Master Services Agreement, ICT Services Supplementary
Agreement, and ICT Project Services Supplementary Agreement with Datacom for up to four years
in substantially similar terms as outlined in this paper.
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•
Approved that the execution of the contract documents be delegated to the Chief Technology and
Innovation Officer.
•
Authorised the financial commitment up to $38.9 mil ion over the next four years, bringing the
whole of life cost of the agreement to $127.6m
16. PwC
Mr Fletcher introduced the paper and responded to the Board’s questions. This included discussion
around the relationship with PwC, PwC’s Maori Health practise, the amount of the spend and the
potential re-prioritisation of budget.
The Board:
•
Authorised the Financial Commitment of up to $13.8m (a maximum of $12m in time and materials,
up to $600,000 in expenses, and a maximum risk and reward component of $1.8m) over the next
financial year, bringing the whole of life cost of the MSA to $101.1m;
•
Approved the MSA extension and SOW for FY2021/22;
•
Noted the $12m represents the cap in time and material spend for PwC versus an existing PwC
consultancy budget of $7.2m. Budget wil need to be identified and re-prioritised from other areas if
spend is expected to be above $7.2m; and
•
Delegated signing of the MSA Extension and the SOW to the Chief Executive.
17. Microsoft
Mr Fletcher introduced the paper and responded to the Board’s questions, including on Microsoft Azure
and carbon footprint considerations.
The Board:
•
Approved entry into the Microsoft Cloud, Software and Services Agreement (MCSSA) in
substantial y similar terms as outlined in this paper.
•
Approved that the execution of the contract documents be delegated to the Chief Technology and
Innovation Officer (CTIO).
•
Authorised the financial commitment estimated to be $31,831,666 over the Agreement term (3
years).
MONTHLY REPORTS
18. Health, Safety and Wellbeing Report
The Board took the paper as read and:
•
Noted progress towards becoming a leader in health, safety and wellbeing.
•
Noted there were no notifiable events in May 2021.
•
Noted the health, safety and wellbeing indicators.
19. Litigation Report
The Board took the paper as read.
9(2)(a)
joined the meeting at 3.50 pm.
Ms Oakley provided verbal advice on the implications of the Calver decision.
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BOARD AMINISTRATION
21. Minutes
The Board:
•
Approved the minutes of the meeting held on 27 May 2021 with no amendments.
22. Matters Arising
The Board:
•
Noted the matters arising.
23. Confirmation of Decisions Made Out of Cycle
The Board:
•
Confirmed the one matter decided out of cycle during the period of 21 May 2021 to 17 June 2021
regarding the establishment of the Nominations Committee.
•
Noted there were no papers held over form the previous meetings.
24. Annual Work Programme
The Board:
•
Noted the annual work programme.
GENERAL BUSINESS
The Board provided sincere thanks and gratitude to Mr Pickering for his leadership of ACC, his
significant contribution and, wished him every success for the future.
There was no other general business.
The meeting closed at 4 pm.
Chair ………………………………………………………….
Date ………………………………
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