Agenda and minutes

Pension Committee - Friday 13 February 2015 10.00 am

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

Items
No. Item

6.

Minutes - pdf icon PDF 118 KB

To approve as a correct record the Minutes of the meetings held on 7 November 2014, 28 November 2014 and 23 January 2015.

Additional documents:

Minutes:

The minutes of the meetings held on 28th November 2014 and 23 January 2015 were approved and signed by the Chairman.

7.

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:

Cllr Brown made a non-prejudicial declaration as a member of Gloucester City Council.

 

Cllr Cooper made a non-prejudicial declaration as a member of Stroud District Council and governor at Archway School.

 

Cllr Hay made a non-prejudicial declaration as a member of Cheltenham Borough Council.

 

Cllr Stowe made a non-prejudicial declaration as a member of Cotswold District Council and UBICO.

 

Cllr Theodoulou made a non-prejudicial declaration as a member of Cotswold District Council.

8.

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 Friday 6 February 2015.

 

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.

9.

Members' Questions -

To answer any written members’ questions. The closing date/time for the receipt of questions is 10.00am on Friday 6 February 2015.

Minutes:

No members’ questions were received.

10.

Training Update

To receive any verbal updates.

Minutes:

10.1                Members requested that training opportunities be circulated to them by email to ensure that they could stay up to date. There was some discussion as to whether there should be a minimum amount of training for a member to undertake. Details of upcoming Local Government Scheme (LGPS) specific training would be circulated.

 

10.2                A training day was in the process of being organised and officers would ensure that the date was agreed with members as soon as possible.

 

11.

Market Valuations and Quarterly Performance Review of the Fund 4th Quarter 2014 pdf icon PDF 46 KB

To note the report

Minutes:

11.1                The committee considered the fourth quarter report to 31st December 2014. Vicki Morgan, Pension Accountant presented the report. The total fund value at quarter end was £1.6bn; the value at the end of September had been £1.57bn. Since the committee papers had been sent out, there has been a few small changes to the ‘since inception figures’ on page 16 of the agenda pack. A replacement page was circulated at the meeting.

 

11.2                During the fourth quarter 2014, the total fund had underperformed against benchmark by 0.6%. The Standard Life Equity fund, both BlackRock Funds and Hermes outperformed. The total fund underperformed by 1.3% against the target for the 12 months to the end of December; outperformed by 1.5% for the rolling three year position and underperformed by 0.3% against the ‘since inception’ benchmark. On an individual mandate basis, three funds outperformed across all the periods under review: BlackRock Emerging Markets, BlackRock Global and Hermes Property fund.

 

11.3                The supplementary table presented to members showed that WAMCO GMS underperformed both benchmarks during fourth quarter 2014. The fund also failed to reach the manager’s internal target for the 12 months to the end of December and underperformed since the ‘inception period’ also. Standard Life GARS achieved positive returns across all periods accoridng to its own internal benchmark.

 

11.4                Members noted the quarter end asset allocation of the fund against the strategic direction.

 

11.5                A summary was given of the rebalancing actioned in quarter four as seen on page 18 of the agenda pack. This included, the rebalancing previously advised to committee in November, a large bulk transfer out of the Fund and draw down payments to CBRE taken from cash reserves. The rebalancing undertaken in quarter 1 2015 totaled £7.58m and had been spread equally across four mandates. All rebalancing and relevant transfers were actioned in accordance with the Fund’s agreed strategy.

 

11.6                Members were informed of the overall cash position of the fund, the majority of which was held by fund managers with a small balance kept in-house. The committee queried the cash position of Standard Life and officers would obtain further detail of the changes over the period.

 

11.7                There was some discussion around the performance of the Fund Managers including the different strategies of the funds in relation to the short and long term.  In addition, the merits of active and passive funds were explored. It was therefore

 

RESOLVED

 

That the report be noted.

 

12.

Pension Fund Risk Register pdf icon PDF 57 KB

To review and agree the Risk Register

Additional documents:

Minutes:

12.1                Graham Burrow introduced the covering report and attached risk register. The LGPS Regulations required the Administering Authority to maintain a Funding Strategy Statement and to keep it under review.

 

12.2                It was explained that the significance of individual risks was measured by a scoring system which multiplied the likelihood of the occurrence with the potential impact of such an occurrence. Both ‘likelihood’ and ‘impact’ were scored 1-5 and after multiplying both numbers together, the higher the product, the higher the risk. Members noted that the level of risk, once scored, was demonstrated by a traffic light system. The committee noted that one risk which had a high inherent risk was in relation to ‘failure to hold personal data securely and keep pension records up-to-date and accurate’. Through the current controls in place this was managed to a much smaller residual risk.

 

12.3                Members welcomed the risk register and one member commented on the importance of the register being dynamic. The committee agreed that they should receive the risk register twice a year with any movement in risk levels fed back to the committee at each meeting. It was therefore

 

RESOLVED

 

To agree the risk register and request that it be reviewed by the committee twice yearly.

 

 

13.

Governance Policy and Compliance Statement pdf icon PDF 51 KB

To consider the report.

Additional documents:

Minutes:

13.1                Graham Burrow introduced the report explaining that the LGPS regulations required administering authorities to prepare, publish and maintain statement of compliance against a set of best practice principles for scheme governance and stewardship as well as a statement detailing governance policy.  It had previously been reviewed by the committee in June 2013.

 

13.2                Members noted the changes in relation to the establishment of the Pension Board.

 

13.3                The area within the Compliance Statement where there was only partial compliance was in relation to representation on the committee. The statement explained why not all employers were represented on the Committee. Members discussed the importance of representatives attending the meetings. The committee discussed the fact that employers were represented through presentations to the Employers Forum. It was therefore

 

RESOLVED

 

To agree the Governance Compliance and Governance Policy Statements, with a request to refer to the presentations to the Employer Forum in the statements. 

 

 

14.

Pension Fund Business Plan 2015-16 pdf icon PDF 52 KB

To agree the Business Plan.

Additional documents:

Minutes:

14.1                Graham Burrow introduced the report for 2015/15. The LGPS regulations required funds to include within their Statement of Invesment Principles (SIP) details of compliance with the Myners principles. The preparation of the Business Plan covered two of these areas, 1) Effective Decision Making and 2) Performance Assessment.

 

14.2                A correction was made to a figure within the report. On page 47 of the agenda pack under ‘Scheme Administration’ External costs were at £250,000 replacing the figure of £230,000.

 

14.3                One member queried the use of benchmarking within the report. It was explained that on page 47, the report detailed that the fund took part in the annual CIPFA Benchmarking of LGPS Administration costs and had been consistently in the lowest cost quartile.  Members requested that the figures were provided.

 

14.4                There was discussion around the increase in staff costs and, in response to a question, it was clarified that this was in relation to staff increments. It was explained that the estimates in the paper did not show outturn figures. The volume of work in this area had increased and while there had been staff turnover it was now a more stable position. Officers confirmed that they would provide the actual expenditure once available  against budget and to circulate the information to members.

 

RESOLVED

 

That the Business Plan be agreed.

 

15.

Pension Fund Administration Strategy pdf icon PDF 59 KB

To agree revisions to the Fund’s Administration strategy

Additional documents:

Minutes:

15.1                Graham Burrow introduced the report. The Administration Strategy outlined procedures for liaising and communicating with employers, set performance targets for both the administering authority and scheme employers and specified the level of performance required from employing authorities. The strategy had last been reviewed in 2011. Once agreed, the strategy would be sent to employers for a 4 week consultation period.

 

15.2                The committee discussed the need for monitoring against the strategy. It was understood that this was also something included in the new CIPFA reporting guidelines and therefore this would be incorporated into the Pension Fund’s Annual Report and Accounts.

 

RESOLVED

 

To agree the Pension Administration Strategy and confirm the arrangements, detailed in the report, covering the agreement of any changes following the consultation process with the scheme employers.

 

16.

Terms of Reference for the Pension Board

To update the Committee on progress since the last meeting

Minutes:

16.1                Constitution Committee had agreed the terms of reference to go to Council on 18 February. The paper contained within the agenda pack for the Full Council meeting was circulated to members for their information.

 

16.2                The Committee noted that the Constitution Committee would be involved in the selection process for Pension Board members.

 

16.3                Members discussed the arrangements around quorum for the Board and requested that the requirement for the Chairman to be in attendance to be removed. It was therefore

 

RESOLVED

 

To note the terms of reference and request an amendment to quorum requirements. 

 

 

17.

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:

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.

18.

Exempt Minutes

To approve as a correct record the exempt minutes of the meetings held on 7th and 28th November 2014.

Minutes:

The exempt minutes of the meetings held on 7th and 28th November were agreed as a correct record and signed by the Chairman.

 

19.

Admission Body Request

To note the request

Minutes:

An additional admission body request had been made since the circulation of the agenda papers. In the opinion of the chair this was urgent business with a decision needing to be made before the next committee meeting.

 

RESOLVED

 

That the two requests for admission to the Fund be approved.

 

20.

UK Equity mandate

Update on progress

Minutes:

RESOLVED

 

To note the report.

 

21.

Fund manager meetings in London in January

To discuss any matters arising.

 

TO FOLLOW

Minutes:

RESOLVED

 

To note the report

 

22.

Investment Report - GMO

Commencing at 12:00 for 45 minutes.

Minutes:

GMO gave a presentation on their performance in quarter 4 2014 and set out their strategy for 2015.

 

RESOLVED

 

That the presentation be noted.