Agenda and minutes

Pension Committee
Friday 9 February 2018 10.00 am

Venue: Meeting Room 1&2 - Shire Hall, Gloucester. View directions

Contact: Andrea Griffiths 

Items
No. Item

1.

Declarations of Interest -

Members of the Committee are invited to declare any financial or pecuniary interest related to specific matters on the agenda.

 

Please see note (a) at the end of the agenda.

Minutes:

Councillor Theodoulou & Stowe declared they members of Cotswold District Council.  Councillor Hay declared he was a member of Cheltenham Borough Council. 

 

Councillor Theodoulou also declared that his wife was a Governor at Farmor’s School. 

2.

Public Questions -

To answer any written questions about matters that are within the powers and duties of the Committee. The closing date/time for the receipt of questions is 10.00am on 2nd February 2018.

 

To answer any oral question(s) put by members of the public.

 

Depending on the nature of the oral questions asked it may not be possible to provide a comprehensive answer at the meeting, in which case a written answer will be supplied as soon as reasonably possible after the meeting.

Minutes:

No public questions were received.

3.

Members' Questions -

To answer any written members’ questions. The closing date/time for the receipt of questions is 10.00am on 2nd February 2018.

Minutes:

No Member questions were received.

4.

Minutes - pdf icon PDF 134 KB

To approve as a correct record the Minutes of the meeting held on 10th November  2017.

Additional documents:

Minutes:

The public minutes of the meeting held on the 10th November 2017 were approved as a correct record and signed by the Chairman. 

 

Resolved

 

That the public minutes of the meeting held on the 10th November 2017 be approved as a correct record. 

5.

Pension Fund Risk Register pdf icon PDF 67 KB

Additional documents:

Minutes:

Mark Spilsbury, Head of Pensions introduced the risk register explaining that it had been reviewed in January 2018.  Following feedback from the pension board the pension committee had agreed that in future a report on the risk register would be considered at each of their regular quarterly meetings. 

 

It was noted that the risk register was a live document and therefore it was important for it to reflect the discussion carried out by the committee.

 

Members were informed that since the risk register was last considered by the Committee in November 2017 a number of changes have been made:

 

-           As requested by the Pension Board and agreed by the Pension Committee in November 2017, a new governance risk 8 has been added to the risk register:

 

“Loss of experience on the Pension Fund Committee or Pension Board, and/or the lack of adequate training, resulting in a negative impact on governance arrangements within the Gloucestershire LGPS”.

 

-           As requested by the Director of Strategic Finance and agreed by the Pension Committee in November 2017, a new governance risk 9 has been added to the risk register:

 

“Transition from the current custodian to State Street Bank under the Brunel Pension Partnership resulting in:

           Failings during the transition

           Inadequate performance reporting post transition

           Negative impacts on the final accounts of the Pension Fund due to failings in the accounting reports received from State Street Bank”.

 

Members were informed that no major problems were encountered during the transition and assets transferred were reconciled back to the detailed records held by each manager. At the time of the update of the risk register the adequacy of the performance report and accounting reports is not known hence this remains a medium risk.

 

It is was proposed that a new governance risk 10 is added to the risk register:

 

“Failure to comply with the General Data Protection Regulation, resulting in breaches which have to be reported to the Pension Regulator and the Information Commissioners Office resulting in complaints from scheme members and/or significant financial fines”.

 

As noted in the risk register, detailed guidance and support was being obtained from the GCC Information Management Team which would include the production of an action plan to detail and monitor actions required to ensure compliance within the Gloucestershire LGPS.

 

In response to a question relating to F5, members commented on the Brexit risk and the fact that they felt  there were other political risks greater than Brexit.  The Committee requested that comments in relation to risk F5 be amended to include ‘Brexit & other political risks’.  (Action – MS)

 

One member commented on the risk identified at G11, and felt that it was essential to be conscious and not complacent of the risk identified.  The Director of Finance agreed to check and report back on best practice methods.  (Action – JW)

 

The committee were informed that a number of new period comments had been inserted into the Risk Register and the residual risk score for risk  ...  view the full minutes text for item 5.

6.

Market Valuations and Quarterly Performance Review of the Pension Fund: Quarter 4 pdf icon PDF 72 KB

Additional documents:

Minutes:

Mark Spilsbury, Head of Pensions presented the report outlining that this was the first report produced for the Gloucestershire Fund by State Street Bank in their capacity as the custodian of the Brunel Pension Partnership.  Members noted that the format of the report was different to previous performance reports, but that the key information had been included in a more user friendly format.  In addition, the report now contained information which related to risks and returns delivered for the Fund’s portfolio’s compared with their benchmark. 

 

The Committee attention was drawn to Page 23 of the report, which provided a detailed summary overview of the Quarter ending December 2017.  Members noted that the entire report contained considerable detail, which at times appeared overwhelming.  It was suggested that pages 24 & 25 could be combined into one page, in an effort to reduce the size the report and whilst focusing upon the detail. 

 

It was noted that the information on page 26 was very important, as it gave a comparison of the  actual performance by the GCC Fund as a whole compared with the strategic benchmark.  The committee appreciated that over a ten year period the fund had outperformed the benchmark.  However, it was noted that since inception the strategic benchmark had not been outperformed.  Officers explained that this was due to the fact that some mandates had been established longer than the ten-year period and must have had a lower level of performance during the pre 10 year period. 

 

Overall, the Committee felt there had been a good returns for the last 1, 3, 5 and 10 year periods.

 

The Head of the Pension referred to the Risk v Return chart on Page 31 of the report.  The Committee felt that the visual comparison was a good idea, however felt that it was difficult to follow and requested that the chart be revised.  The Independent Advisor suggested that a visual line be included linking the actual risk/return with the benchmark risk/return for each mandate, as this would focus members attention, when considering performance.  (Action – MS)

 

In response to a question, members were advised that when the funds assets  transferred to the Brunel Partnership both the active and passive mandates would be transitioned in accordance with an agreed transition plan. 

 

Resolved

 

That the report be noted. 

7.

Brunel Pension Partnership Oversight Board Minutes pdf icon PDF 73 KB

Minutes:

Mark Spilsbury, Head of the Pension Fund presented the report.  It was explained that the Brunel Pension Partnership minutes and supporting reports were available via their website. 

 

The Committee requested that they received the minutes with a covering report highlighting any items of interest in the future.  (Action – MS)

 

Resolved

 

That the minutes be noted. 

8.

Annual Pensioners Newsletter pdf icon PDF 53 KB

Additional documents:

Minutes:

Mark Spilsbury, Head of Pensions presented the Annual Pensioners Newsletter.  He informed the Committee that the Newsletter contained a lot of factual information which was designed to help LGPS members have a clearer understanding of the scheme.  The committee appreciated the need to communicate with Pensioners who invested in the scheme. 

 

It was noted that the newsletter contained a reminder to pensioners to ensure that they contacted the Pensions Team and update their personal information if necessary.  In addition, information had been included on the national fraud initiative. 

 

Members indicated that the newsletter was very dense and contained a lot of information.  There were some reservations over the layout and content.  

The Director of Finance accepted the points raised and agreed it was fair challenge.  She recognised that the volume of text could be reduced and some graphics could be inserted to highlight the key messages, in order to make future newsletters more user friendly.  (Action – MS)

 

Resolved

 

That future years Newsletters be refreshed in an effort to make them more user friendly. 

 

That the Newsletter be noted. 

9.

Training: Verbal Update

Minutes:

Mark Spilsbury, Head of Pensions asked the Committee to consider if further training was required.  It was agreed that it would be useful if a brief training session on Investment Performance and Risk could be held prior to a future meeting, with the formal Committee meeting commencing at 10:30am. (Action – MS/AG)

 

Members requested that any training opportunities be circulated via email and any requests for places on courses be sent to the Head of Pensions. The Chairman asked officers to explore the possibility of providing external training at GCC. (Action – MS) 

 

Resolved

 

That the verbal update be noted. 

10.

Exclusion of the press and public

Resolved

 

 That in accordance with Section 100 A (4) of the Local Government Act 1972 the public be excluded from the meeting for the following agenda items, because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 of Part 1 of Schedule 12 A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

 

Minutes:

It was resolved

 

That in accordance with Section 100 A (4) of the Local Government Act 1972 the public be excluded from the meeting for the following agenda items, because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 3 & 5 of Part 1 of Schedule 12 A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

11.

Exempt Minutes

To approve as a correct record the exempt minutes of the meetings held on 10th November 2017.

Minutes:

The exempt minutes of the meeting held on 10th November 2017 were agreed as a correct record and signed by the Chairman.

 

Resolved

 

That the exempt minutes of the meeting held on the 10th November 2017 be approved as a correct record. 

 

12.

Brunel Pension Partnership Update Report

Minutes:

The Chairman welcomed Dawn Turner, CEO, Mark Mansley (Chief Investment Officer) and Matthew Trebilcock (Client Relationship Director) from the Brunel Pension Partnership to the meeting. 

 

Dawn Tucker, CEO of BPP, presented the Brunel Update report and answered questions from the Committee.  The Committee were advised that the external auditors, Grant Thornton, had now been appointed to the BPP. 

 

Councillor Moor explained that the Pension Board felt there were good scrutiny arrangements in place and would continue to monitor the process with interest. 

 

Resolved

 

That the report be noted.

13.

Brunel Pension Partnership Investment Portfolios and briefing on Passive mandates

Minutes:

Mark Mansley from BPP provided the Committee with a detailed presentation, which highlighted the investment portfolios and passive mandates.  The presentation was well received by members. 

 

Resolved

 

That the report be noted.

14.

Economic Review Q4 2017 & Feedback from Managers Meetings

Minutes:

John Arthur, Independent Advisor, presented the report.  The Committee were advised that overall the Independent Advisor was content with the appointed Fund Managers progress. 

 

The Independent Advisor gave an insightful analogy to the Committee which was well received, it explained the global impacts in relation to market volatility and global economy recovery. 

 

The report was well received, it was noted that it was not always possible to manage all risks as some were unknown.    The Independent Advisor informed members that if they had specific questions or concerns they were welcome to email him directly. 

 

Resolved

 

That the report be noted.

15.

Implementation of New Investment Proposals

Minutes:

Mark Spilsbury, Head of the Pension Fund presented the report which informed the Committee as to the current position.   

 

Resolved

 

That the report be noted.

16.

Admission Body Requests

Minutes:

The Committee received a report from the Director of Strategic Finance. 

 

Councillor Theodoulou declared that his wife was a Governor at Farmors School, therefore he refrained from taking part in the discussion. 

 

Resolved

 

That the Committee approved the Admission Body Request. 

 

17.

Investment Manager Presentation CBRE

Minutes:

Dugal Hunt and Max Johnson from CBRE provided a detailed presentation to the Committee. 

 

Resolved

 

That the report be noted.