Agenda and minutes

Pension Committee
Friday 10 November 2017 10.00 am

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

Items
No. Item

61.

Apologies

Minutes:

Apologies were received from Nigel Cooper. 

62.

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, Parsons and Stowe declared they were members of Cotswold District Council.  Councillor Hay declared he was a member of Cheltenham Borough Council. 

63.

Minutes - pdf icon PDF 142 KB

To approve as a correct record the Minutes of the meeting held on 1st September 2017. 

Additional documents:

Minutes:

The public summary minutes of the meeting held on the 1st September 2017 were approved as a correct record and signed by the Chairman. 

 

Members’ attention was drawn to the action sheet.  In relation to Action 1, the Clerk informed the Committee that two nominations (Councillor Hay & Councillor Parsons) for the Vice-Chairmanship had been received by Democratic Services.    On being put to the vote, Councillor Parsons was duly elected as Vice- Chairman.

 

Mark Spilsbury informed the Committee with regards to Action 4, that 91% of County Council Employees were members of the LGPS.

 

Resolved

 

That Councillor Parsons was duly elected as the Vice-Chairman of the Pensions Committee.   

 

That the public minutes of the meeting held on the 1st September 2017 be approved as a correct record. 

64.

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 3rd November 2017.

 

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. 

65.

Members' Questions -

To answer any written members’ questions. The closing date/time for the receipt of questions is 10.00am on 3rd November 2017.

Minutes:

No written Members questions were received.

 

Councillor Hay raised a verbal question in relation to public interest in off shore tax havens and requested to know if any of GCC’s investments were in such accounts.  It was agreed that the Head of Pensions would contact all of the investment managers used by the Gloucestershire Fund and seek assurances that none of the funds investments were placed “off shore” in order to avoid the payment of tax. IT was also agreed that a statement would be brought back to the next meeting of the Committee.  (Action MS)

 

Steve Tyson, Independent Advisor, referred to the notion of responsible investments.  It was noted that the Brunel Partnership would ensure better engagement and responsible investing.

 

Councillor Oosthuysen referred to an email from one of his constituents in relation to fossil fuel investment and the possibility of such investments becoming stranded assets.  He requested to know if the Gloucestershire LGPS was involved with such investments, it was explained that the LGPS invested in Shell, BP and other renewable energy sources, etc.  Members were informed that these were legitimate investments.   The Independent Advisor explained that a major theme for investments would be managing the Carbon Footprint, it was suggested that these concerns should be considered when agreeing the investment portfolios to be used under the  Brunel Pension Partnership.

 

In response to a question, it was confirmed that Brunel would have ethical investment portfolios available.  Members agreed that it would be advisable to incorporate training on responsible ethical investing, carbon footprints, etc, into the next member training session.  (Action – MS)

66.

Market Valuations and Quarterly Performance Review of the Pension Fund: Quarter 3 2017 pdf icon PDF 126 KB

Additional documents:

Minutes:

 Head of Pension Fund, Mark Spilsbury, presented an overview of market valuations and an update on the performance of the Gloucestershire Local Government Pension Scheme, (LGPS), as at 30 September 2017. It was noted that this report used the new strategic asset allocation as agreed by Committee in March 2017, for implementation from 1 April 2017.  The short term (pre-Brunel) strategic asset allocation was shown within the report.   Members were informed that this was the last time the report would be received by the Committee in this format. 

 

The report was sub-divided into four areas, detailing information on i) Manager Performance; ii) Asset Allocation; iii) Market Values, and iv) Cash Position. The Committee discussed the report in detail. 

 

The Head of Pension Fund informed members that performance was slightly above the benchmark targets for Quarter 3.  It was reported that the performance return was positive during the past 12 months with a 12% return being delivered across the full portfolio. 

 

In response to a question the Committee were informed that 50% of the investment in the Blackrock Aquila Life mandate was hedged against curreny changes.   Members also commented on Standard Life GARS poor performance. 

 

It was agreed that the performance of the private debt mandates would be be included within future performance reports. 

 

Members were advised that State Street had been appointed as the new custodian to the Brunel Partnership.  It was noted that Gloucestershire LGPS was within the transition second tranche, and would make the transition on the 15th December 2017.  The Committee noted that the new report format would be an example of best practice and would  be more user friendly than then current reporting format, and would be capable of amendment if required by the Committee. 

 

The Head of the Pension Fund explained that State Street would do the reconciliation detail for individual funds.  The Committee were advised that the report would contain historical data for comparison.

 

Resolved

 

That the performance report was noted. 

67.

Pension Fund Risk Register pdf icon PDF 59 KB

Additional documents:

Minutes:

The Administrative Authority, Gloucestershire County Council was required to maintain, and keep under review, a Risk Register for the Gloucestershire Pension Fund, in which the Council is required to identify any risks associated with the Pension Fund and the measures or controls taken to counter such risks. The Risk Register was last reviewed by the Pension Committee in September 2017 and by the Pension Board in October 2017.

 

Mark Spilsbury, Head of the Pension Fund, informed members that since the Risk Register was reviewed by the Pension Board in October 2017, the Board had requested that the following new risk be included:

-           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. 

 

Members noted that the risk to GCC was mainly every four years, in terms of elections.  The Committee agreed that this risk should be included on the Risk Register The Head of the Pension Fund explained that it would be included as Governance Risk 8.  

 

John Arthur, Independent Advisor, explained that he was previously involved with MIFIID at Allenbridge, and the risk was mitigated in the opt up process, however it could create issues if not managed carefully.  Members felt reassured that transition mechanisms were in place within the MIFIID directive.   

 

The Director of Strategic Finance proposed that the transition to the new custodian State Street should also be included as an additional risk within the register, members concurred with the proposal. 

 

In response to a question, it was noted that the newly appointed committee member had received a one to one in house briefing session, in addition to LGPS Fundamentals Training Course.   The Director of Strategic Finance explained that training was mandatory and members were expected to keep their training records up to date.  The Independent Advisor added the Devon Pension Committee members undertook more training, which was well received.  The Chairman requested that officers look at the training options available to Pension Committee Members and report back accordingly. (Action – MS)

 

Peter Clarke, Co-opted member also explained as an employee it was not always possible to have time off from work to attend such training events and consideration should be given to this factor.  The Chairman noted the pointed raised and requested officers to consider these points when arranging training sessions.  

 

The committee noted and agreed the amendments to the Risk Register, as highlighted by the published report and agreed at the meeting. 

 

Resolved

 

That the Committee reviewed and agreed the attached Risk Register, including the following amendments:

-           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.  (Governance Risk 8)

-           That the transition to State Street as the custodian should also be included within the Risk Register.  

68.

Pension Board Minutes pdf icon PDF 93 KB

The Committee is asked to note the public minutes.

Minutes:

Councillor Moor presented the minutes of the Pension Board meeting held on 16th October 2017.  The Board requested to view the draft annual report for future years prior to publication, the Chairman agreed to the request.    (Action – MS)

 

During the discussion, it was noted that there was a typographical error at Minute 47, the term ‘employee’ should be amended to ‘employer’.         (Action –MS)

 

Resolved

 

That the minutes of the Pension Board meeting held on 16th October  2017 were duly noted, subject to the amendment of the typographical error at Minute 47.

69.

Annual Pensioners Newsletter pdf icon PDF 68 KB

Additional documents:

Minutes:

The Head of the Pension Fund, Mark Spilsbury presented the report.  He explained that the Annual Newsletter contained factual information which was designed to help LGPS members have a clearer understanding of the scheme. 

 

During the discussion, the committee suggested that the newsletter should contain a reminder to pensioners to ensure that they contact the Pension Team and update personal information held as appropriate. In addition, it was noted that information on the National Fraud Initiative should be emphasised in the new version, as a delaying in mentioning any overpayment, would increase the amount to be repaid.  Members didn’t wish to frighten people but felt the message should be clear.    (Action – MS)

 

The Committee requested that they received the Annual Pensioners Newsletter for information purposes at the February 2018 meeting.

(Action – MS)

 

Resolved

 

That the committee review future newsletters.

 

 

At this juncture, the Committee adjourned the meeting to attend the Remembrance Service and reconvened shortly afterwards.

70.

Training Update

To receive a verbal update.

Minutes:

The Head of the Pension Fund, Mark Spilsbury, updated the Committee on forthcoming training events and explained that all training events would be circulated via email in the future.  Committee members were requested to contact Mark Spilsbury if they wished to attend any of the training events.  

 

It was noted that a training needs questionnaire had been tabled at the meeting, members were request to complete and submit their questionnaire as soon as possible.  (Action – Members of the Committee)

 

Members wished to know if their role on the Pension Committee would change in light of the Brunel Partnership arrangements. It was explained that the vast majority of their current role would continue, albeit that there would be a greater emphasis of the Strategic Asset Allocation, with the Committee no longer being involved in the appointment and/or removal of Investment Managers.

 

The Head of the Pension Fund suggested that it would be beneficial to invite representatives from the Brunel Partnership to the next meeting of the Committee.  In order to discuss the arrangements, provide a short presentation and answer any questions members may have.  (Action – MS)

 

Resolved

 

That the update be noted and that representatives from the Brunel Partnership be invited to the next meeting. 

71.

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.

72.

Exempt Minutes

To approve as a correct record the exempt minutes of the meetings held on the 1st September 2017.

Minutes:

The exempt minutes of the meeting held on 1st September 2017 were agreed as a correct record and signed by the Chairman.

 

Resolved

 

That the exempt minutes of the meeting held on the 1st September 2017 be approved as a correct record. 

73.

Pension Board Exempt Minutes

The Committee is asked to note the exempt minutes.

Minutes:

During the discussion, it was noted that there was a typographical error at Minute 47, the term ‘employee’ should be amended to ‘employer’.  (Action –MS)

 

Resolved

 

That the exempt minutes of the Pension Board meeting held on 16th October  2017 were duly noted, subject to the amendment of the typographical error at Minute 47.

74.

Pension Administration Performance

Minutes:

The Head of the Pension Fund, Mark Spilsbury presented the report in detail. 

 

Resolved

 

That the report was duly noted and the Committee agreed that performance figures would be reported on a six monthly basis. 

75.

Investment Update

To receive a verbal update.

Minutes:

The Independent Pension Advisor, Steve Tyson, presented information on investment issues and the position of the financial markets. 

 

Resolved

 

That the update was duly noted.

 

76.

Meeting with Fund Manager

Minutes:

The Head of the Pension Fund, Mark Spilsbury gave a detailed presentation.

 

Resolved

 

That the report be noted.

77.

Brunel Pension Partnership

To receive a verbal update

Minutes:

The Head of the Pension Fund, Mark Spilsbury informed the Committee, as to the current position. 

 

Resolved

 

That the update be received.  

78.

Admission Body Request

Minutes:

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

 

Resolved

 

That the Committee approved the Admission Body request.

79.

Investment Presentation

To receive a Blackrock presentation.

Minutes:

Peter Hunt, David Wright and Richard Matthieson from Blackrock gave a detailed presentation, which highlighted the Strategic Asset Allocation to the end of September 2017.