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Remuneration and People Committee terms of reference

Purpose

Constituted as a Committee to the IFoA Board, the Remuneration and People Committee shall review and set the remuneration of the IFoA’s Chief Executive, its Executive Directors, and members of the IFoA Board, at all times ensuring remuneration is market competitive, fair and designed to attract, retain and reward the individuals. The Committee shall participate in the objective-setting process for the IFoA’s Chief Executive and Executive Directors and oversee and advise on processes and procedures in place to drive a high-performance culture at the IFoA. The Committee shall also provide guidance and direction in related matters, such as workforce and succession planning for all IFoA colleagues. These terms may be amended at any time by the IFoA Board.

Authority

  1. The Committee is authorised by the IFoA Board to review or investigate any activity within its terms of reference.
  2. The Committee is authorised by the Board to require of the Staff such additional activity as it deems appropriate within its terms of reference.
  3. The Committee may delegate some of its powers as appropriate to members of Staff on the recommendation of the Chief Executive in accordance with a scheme of delegation approved by IFoA Board.
  4. The Committee is authorised to obtain independent legal or professional advice as approved in the budgets to support its decision making.
  5. The Committee may undertake such activities as may from time to time be delegated to it by the Board.

Key responsibilities

1. Remuneration

The Committee

  1. Sets the remuneration of:
    1. the Chief Executive;
    2. the Executive Directors; and
    3. IFoA Board members including the Board Chair as appropriate
  2. Approves any termination payments made to IFoA colleagues as part of any exit agreement or settlement that are outside of the IFoA’s redundancy policy.
  3. Approves any amendment to the IFoA’s discretion to enhance an employee’s redundancy pay, as articulated in the IFoA’s redundancy policy.
  4. Approves any exit payments for overseas employees when these exceed the local regulations.
  5. Sets guidance for, and reviews, the remuneration of Office Holder (Non-Executive) roles. (Exceptionally and as an exigency measure, the Chair of the Committee may approve payment of a fee outside that agreed within that guidance).
  6. Oversees and advises on the policy approach taken in relation to Reward matters for all IFoA colleagues.
  7. Ensures the IFoA implements and maintains remuneration policies, procedures and practices that promote sound and effective management and take full account of risks.
  8. Approves the overall remuneration framework – salaries, bonus and packages - for the Chief Executive and the Executive Directors and for staff.
  9. Oversees the application of pay principles in the annual pay reviews and distribution of the performance-related pay budget for all staff with particular attention to oversight of grade, location and DEI demographics.
  10. Approves annual pay reviews for the Chief Executive and the Executive Directors.
  11. Where proposed, approves the application of non- standard terms, contractual or otherwise for the Chief Executive and the Executive Directors.
  12. Oversees the application of non-standard terms across the IFoA through periodic reporting by the Chief Executive, to be carried out at least annually.
  13. Approves the arrangements for termination of employment and other contractual terms for the Chief Executive and the Executive Directors.
  14. Oversees such arrangements across IFoA through periodic reporting by the Chief Executive, to be carried out at least annually.
  15. Approves the remuneration and expenses policy for Board members.

2. Performance and objectives

The Committee

  1. Provides input to the Chair of IFoA Board in setting annual performance objectives for the Chief Executive, approves those objectives, and receives regular performance review updates, providing input as appropriate.
  2. Considers progress on annual performance objectives and personal development plans for the Executive Directors, on the recommendation of the Chief Executive, and considers mid-year updates from the Chief Executive on progress against and/or amendments to those objectives and/or plans.
  3. Assists the Chief Executive in incentivising performance of the Executive Leadership Team.
  4. Oversees and advises on approach taken in relation to driving high performance in all IFoA colleagues.

3. Other people-related topics

The Committee shall oversee and provide guidance on other people-related topics and risks including:

  1. Periodically, and on no greater than a 5-year cycle, reviewing the range of HR policies, taking advice from the Audit and Risk Committee (ARC) on the probity policies.
  2. Overseeing the development and key changes to the pay and other HR policies.
  3. As requested by the Board, providing advice and oversight to organisational design and workforce planning processes, identifying any risks and opportunities for the IFoA.
  4. Assuring itself that diversity, equity and inclusion are promoted and embedded across IFoA and that all considerations and decisions of the Committee are made with consideration to legal and diversity, equity and inclusion issues.

4. Governance

The Committee

  1. Complies with the Governance Manual.
  2. Is authorised to obtain reliable up to date information about remuneration as it deems necessary to aid fulfilling its obligations. To help it do so, the Committee shall have full authority to obtain external professional advice and to commission any reports or surveys which it deems necessary, provided always that it acts within any budgetary constraints imposed by the IFoA and complies with the IFoA’s financial authorisation processes.
  3. In carrying out its activities, the Committee shall, specifically, have regard to the remuneration trends across comparable organisations. Comparable organisations shall be those that have been agreed by the Remuneration and People committee. The Committee shall also act in accordance with agreed guidance when contributing to the process for setting performance objectives for the Chief Executive and Directors - specifically, the guidance notes for
    1. the Chief Executive’s appraisal; and
    2. IFoA Executive Directors’ pay.

5. Planning and reporting

  1. The Chair to report to the IFoA Board on its proceedings following each of its meetings and, at least once annually, on its own performance.
  2. As soon as is practicable, minutes of each meeting will be circulated to members for noting. They will otherwise remain confidential.
  3. The Committee will report on its activities, without breaching confidentiality, in any appropriate IFoA report.

Membership

The Committee shall comprise five members:

  1. A Chair, who is an independent Non-Executive Director on the IFoA Board
  2. Chair of IFoA Board
  3. President of Council
  4. One additional lay member with remuneration committee experience.
  5. An independent member, being someone who may be either:
    1. (a) a lay person or
    2. (b) a Fellow or Associate of the IFoA, but who is not a member of the Council and has no other role within the IFoA, but has relevant executive level remuneration experience

The President – Elect has the right to attend all meetings of the Committee.

Executive support to the committee shall be provided by the HR Team.

Specific procedural rules

  1. The Committee shall meet at key points in the year and, on average, will meet twice during the performance year. Additional meetings may be convened by exception.
  2. A quorum comprises three members of the Committee.
  3. The Chief Executive shall attend the meetings but shall not be present for or be entitled to vote in any matter relating to their remuneration.
  4. The Head of Human Resources shall attend the meetings to provide remuneration data and advice as required.

Review of effectiveness

The Committee will review its own effectiveness. The review results will be reported to the Board, including any recommendations for change.

The Terms of Reference of the Committee shall be reviewed on an annual basis.