Agenda and minutes

Pension Fund Sub-Committee
Tuesday, 17th March, 2015 7.00 pm

Venue: Committee Room 3 - Hammersmith Town Hall. View directions

Contact: Ibrahim Ibrahim  020 8753 2075

Items
No. Item

12.

Minutes of the previous meeting pdf icon PDF 65 KB

(a) To approve as an accurate record and the Chair to sign the minutes of the meeting held on 20 January 2015.

 

(b) To note the outstanding actions.

Additional documents:

Minutes:

(a) Matters Arising

 

PAGE 3 (5) – Bi-Borough LGPS Pension Administration Services from 1st April 2015

 

Debbie Morris (Bi-Borough Director for HR) confirmed that Surrey County Council (SCC) provide pension administration services to West Sussex District Council, Westminster City Council (WCC) and to their own Local Authority [SCC].

           

RESOLVED –

 

THAT, the minutes of the meeting held on 20 January 2015 were agreed as a correct record and signed by the Chair.

13.

Apologies for absence

Minutes:

Apologies for lateness were received form Councillor Guy Vincent.

14.

Declarations of interest

If a Committee member has any prejudicial or personal interest in a particular item they should declare the existence and nature of the interest at the commencement of the consideration of that item or as soon as it becomes apparent.

 

At meetings where members of the public are allowed to be in attendance and speak, any Councillor with a prejudicial interest may also make representations, give evidence or answer questions about the matter. The Councillor must then withdraw immediately from the meeting before the matter is discussed and any vote taken unless a dispensation has been obtained from the Standards Committee.

 

Where Members of the public are not allowed to be in attendance, then the Councillor with a prejudicial interest should withdraw from the meeting whilst the matter is under consideration unless the disability has been removed by the Standards Committee.

 

Minutes:

There were no declarations of interest.

15.

Pension Fund Quarterly Update Pack pdf icon PDF 107 KB

This report presents the first Pension Fund quarterly update.

Additional documents:

Minutes:

Nicola Webb (Pension Fund Officer) drew Sub-Committee Members attention to page 37; Appendix 4 of the report, which showed that the Council was likely to be overdrawn by March 2015. It was noted that £83.4m would be withdrawn from the Legal and General Cash Fund, of which £80m would then be used for the M&G investment with the remaining £3.4m being used to cover the payments to year end.

 

Alistair Sutherland (Deloitte) drew Members attention to pages 12 – 29; Appendix 2 of the report, which showed that Majedie, MFS and Ruffer had outperformed their benchmark figures over the quarter. It was noted that over the long term, Majedie and Ruffer were continuing to deliver though there were concerns about the MFS Fund. In addition, Members were concerned about Goldman Sachs performance though Alistair Sutherland advised that they offered a risk-controlled portfolio that invested across a range of different categories of bonds and bond like investments. 

 

David Coates (Interim Payroll Manager) confirmed that once the Council had transitioned to SCC from Capita, there would be a review of the risks surrounding the operational administration. In addition, Members requested an ongoing monthly snapshot of the Fund Performance, which had not been sent for some time. Jonathan Hunt (Tri-Borough Director for Treasury and Pensions) agreed to begin forwarding this to Members again.

 

ACTION: Jonathan Hunt

 

Debbie Morris drew Members attention to an information note on proposals for a Pensions Annual General Meeting. Members approved the recommendations for a more detailed AGM.

 

ACTION: Jonathan Hunt, Debbie Morris and Nicola Webb

 

RESOLVED –

 

(a) THAT, the Sub-Committee approved the withdrawal of the balance remaining in the Legal and General Investment Management Sterling Liquidity Fund, after funding the M&G investment, and that it is transferred to the Pension Fund Current Account.

 

(b) THAT, Jonathan Hunt, Debbie Morris and Nicola Webb would prepare a detailed AGM agenda for the next meeting of the Pensions Sub-Committee.

16.

Pension Fund Actuarial Service pdf icon PDF 85 KB

The Fund Actuary, Graeme Muir of Barnett Waddingham, is attending the Sub-Committee to brief Members on his role and some of the key issues affecting the funding of the Pension Fund.

 

Additional documents:

Minutes:

The Fund Actuary, Graeme Muir of Barnett Waddingham, attended the Sub-committee to brief members on his role and some of the key issues affecting the funding of the Pension Fund.

 

It was noted that the Pensions Fund was delivering good investment returns with an actual figure of 8.7% compared with an assumption of 6%. In addition, it was noted that the Fund had slightly lower long-term inflation expectations at 2.6%.

 

Jonathan Hunt informed Members that Barnett Waddingham’s contract was currently up for renewal on 31st August 2015 and a request for a further one month extension to September 2015 was requested. In response, Members approved a shared services (LBHF, WCC and the Royal Borough of Kensington and Chelsea (RBK&C)) re-tender process as it was felt that the 3 Funds were closely aligned, which presented economies of scale.

 

RESOLVED –

 

THAT, the contract for Pension Fund actuarial services with Barnett Waddingham be extended until 30th September 2015, as allowed for under the current contract.

17.

Statement of Investment Principles pdf icon PDF 264 KB

This report presents a draft Statement of Investment Principles and recommends an increase in certain limits on investment.

Additional documents:

Minutes:

Jonathan Hunt introduced the report, which required the Pension Fund to prepare, publish and maintain a Statement of Investment Principles in accordance with Government regulations.

 

Jonathan Hunt drew Members attention to page 64 – 65; point 5.5 of the report, which set out proposals to increase the limits set out in the table to provide the Fund with greater flexibility to make investments in products in line with the investment strategy. In addition, Jonathan Hunt drew Members attention to page 74; Appendix 1 of the report, where it was noted that the rate of return was expected to be 6%. In addition, Members noted that with reference to page 78; Appendix 1, there was one principle, which was described as partially compliant. In response Jonathan Hunt agreed to examine solutions in order to make this fully compliant though it was noted that this could be role for the Pensions Board.

 

ACTION: Jonathan Hunt

 

RESOLVED –

 

(a) THAT, the Sub-Committee approved the draft Statement of Investment Principles set out in Appendix 1, subject to consultation with the employers of the Pension Fund, and the agreement of the final version being delegated to the Tri-Borough Director for Treasury and Pensions in consultation with the Chair of the Sub-Committee.

 

(b) THAT, the Sub-Committee agreed to increase the limits on investment as set out in the table, in line with the factors specified in section 5.5 of this report.

18.

Date of the next meeting

Thursday 14th May 2015.

Minutes:

14th May 2015, 7pm.

19.

Exclusion of the public and press

The Committee is invited to resolve, under Section 100A (4) of the Local Government Act 1972, that the public and press be excluded from the meeting during the consideration of the following items of business, on the grounds that they contain the likely disclosure of exempt information, as defined in of Schedule 12A of the said Act, and that the public interest in maintaining the exemption currently outweighs the public interest in disclosing the information.

Minutes:

The Chair requested for any members of the public and press to leave the meeting room, as all the public reports had been heard and the Committee were then moving onto exempt items.

 

RESOLVED –

 

THAT under section 100A (4) of the Local Government Act 1972, the public and press be excluded from the meeting during the consideration of the following items of business, on the grounds that they contain the likely disclosure of exempt information, as defined by paragraph 3 of Schedule 12A of the said Act and that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

20.

Minutes

To approve as an accurate record and the Chair to sign the minutes of the exempt discussion at the meeting held on 20 January 2015.

Minutes:

RESOLVED –

 

THAT, the exempt minutes of the meeting held on 20 January 2015 were agreed as a correct record and signed by the Chair.

 

21.

Standard Life Long Lease Property Fund

To receive a report on the Standard Life Long Lease Property Fund.

Minutes:

RESOLVED –

 

(a) THAT, the Sub-Committee approved the recommendations contained within the report.

 

(b) THAT, the Sub-Committee approved the recommendations contained within the report.

22.

Investment Strategy Update

To receive an update on the Investment Strategy.

Minutes:

RESOLVED –

 

THAT, the Sub-Committee approved the recommendations contained within the report.

23.

Infrastructure Investments

To receive a report on the Infrastructure Investments.

Minutes:

RESOLVED –

 

THAT, the Sub-Committee approved the recommendations contained within the report.