Agenda and minutes

Pension Committee - Friday 12 February 2016 10.00 am

Venue: Cabinet Suite - Shire Hall, Gloucester. View directions

Items
No. Item

10.

Minutes - pdf icon PDF 100 KB

To approve as a correct record the Minutes of the meeting held on 29 January 2016.

 

TO FOLLOW

Minutes:

The public minutes of the meeting held on 29 January 2016 were agreed as a correct record and signed by the Chairman.

11.

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 and as a trustee of Cheltenham Trust.

 

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

District Council.

 

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

 

Peter Clark declared that he was a member of the Local Government Pension Scheme.

 

12.

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 5 February 2016.

 

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.

 

13.

Members' Questions -

To answer any written members’ questions. The closing date/time for the receipt of questions is 10.00am on 5 February 2016.

Minutes:

No Member questions were received.

14.

Training Update

Verbal updates

Minutes:

14.1                Graham Burrow explained that members would be notified of upcoming training. Members discussed the LGA training for new members and noted that this update training from the LGA would also be useful for longstanding committee members. Members asked that this suggestion be fed back to the LGA.
ACTION                     Graham Burrow

 

14.2                Members discussed the need for future training in relation to the pooling of investments and noted that this need would be common across regions. It was suggested that joint training should be explored.
ACTION                     Graham Burrow

 

15.

Market Valuations and Quarterly Performance Review of the Fund Quarter 4 2015 pdf icon PDF 215 KB

To note the report.

Minutes:

15.1                Steve Tyson provided an update on market conditions, noting that the information in the report was from December 2015, since when there had been volatility in financial markets.

 

15.2                It was explained that there had been fears expressed from some companies that the world economy was sliding back into recession. He explained that it was his view and that of other investment advisers that there was unlikely to be a slide back into recession but that we were entering into a challenging period. He cited a move to negative interest rate in Japan and Europe.

 

15.3                Gloucestershire’s portfolio was diverse and while there would be volatility some assets would hold up and there would be some dependency on the skill of individual managers.

 

15.4                At future meetings, just before investment manager presentations, Steve Tyson would have a formal agenda item where he would give a brief verbal update to members on market conditions ahead of the discussion with investment managers.

ACTION                     Stephen Bace/ Steve Tyson

 

15.5                Sharon Crane, introduced the report which showed the market values for each fund manager and their performance to date and since inception. There was some discussion around the difficulty in comparing the performance of fixed income against equities with members noting the importance of taking into account the inception date.

 

15.6                Members discussed the performance of the funds, with one member noting that equity funds while not outperforming had remained stable through volatile market conditions over a sustained period of time. Another member queried where the value was for equities in relation to the higher risk.

.

16.

Policy on Reporting Breaches to the Pension Regulator pdf icon PDF 56 KB

To agree the report.

Additional documents:

Minutes:

16.1                Graham Burrow introduced the report explaining that under the Public Service Pensions Act 2013, there was a legal requirement on all Pension Fund Committee members, Local Pension Board members and officers of the fund, employers and advisers to report any significant breaches of the law to the Pensions Regulator where they were likely to be of material significance to them.

 

16.2                Members were provided with Breaches Policy Guidelines which had been produced by officers in conjunction with Hymans Robertson. Members were asked to agree the policy and made a number of comments:

 

·         Members asked that the document be amended throughout to note the non county councillor members who share the responsibilities.

·         Members asked that there be a standard item on the agenda at each committee meeting updating members on the administration of the Pension Fund. In response it was agreed that a performance dashboard be created to ensure members could monitor this.

ACTION               Graham Burrow

 

16.3                Members were reassured that there were various bodies and mechanisms within the Council that would also have a role in monitoring compliance with the breaches policy, including Internal Audit, the Council’s whistle blowing procedure and reporting through the Statutory Officers Group. This document was about raising awareness and identifying responsibilities.

 

RESOLVED

To agree the Breaches policy including the suggested amendments.

17.

The 2016 Triennial Fund Valuation pdf icon PDF 60 KB

To note the report

Minutes:

17.1                Members were informed that all Local Government Pension Scheme (LGPS) Pension Funds in England and Wales would be undertaking a triennial Fund valuation during 2016.

 

17.2                The key stages of the process was outlined for members including the Actuary producing draft valuation results in November 2016 with the finalisation of the results during January/ February 2017.

      

18.

Review of the Fund's Risk Register pdf icon PDF 72 KB

To agree the report.

Additional documents:

Minutes:

18.1                Graham Burrow introduced the risk register explaining that it had been reviewed and included a new risk relating to the development and implementation of the South West investment pool.  This related to whether the Fund had sufficient resources to move the pooling proposal forward while not having a detrimental impact on the management of the Gloucestershire Fund.

 

18.2                Members were informed that the residual risk rating of Risk F1 ‘Fund assets fail to deliver returns in line with the anticipated returns underpinning the valuation of liabilities over the long term’ had been reduced from a score of 8 to 6 (Low). This was because the ‘like for like’ valuation comparison of South West Funds undertaken by Hymans Robertson following the last valuation showed Gloucestershire Fund had a very strong deficit recovery position requiring the lowest investment return, of 4.1%.

 

18.3                The Committee made a number of comments in relation to the risk register for appropriate amendments to reflect the following:

 

·         Given the recent volatility of markets should the Risk level for F1 be higher? It was noted that while there may be short term market volatility this was a long term funding target and given the Fund’s strong deficit recovery position and the low returns required to achieve this the current risk score was still appropriate. But it was agreed this would be kept under review.

 

·         Members requested that Cyber security be more explicit within the risk register.

 

·         Members questioned what would happen in a circumstance where the current level of risk was higher than the appetite for risk. In those circumstances it was important that the actions being taken to mitigate risk be outlined.

 

·         The risk register was a live document and therefore it was important for it to reflect the discussion carried out by the Committee. The committee requested that the comments be included in the risk register to recognise the active monitoring and management of risk.

 

 

ACTION                     Graham Burrow

19.

Key Performance Indicators pdf icon PDF 62 KB

To agree the report.

Additional documents:

Minutes:

19.1                The Committee was informed that the national LGPS Scheme Advisory Board (SAB) had developed a range of draft Key Performance Indicators (KPIs) for LGPS Funds during 2014 which had been piloted by a number of Funds.

 

19.2                While Gloucestershire had not been part of the pilot, members were provided with details of the KPIs and how Gloucestershire self-scored against them for information.

20.

Pension Fund Business Plan 2016/17 pdf icon PDF 52 KB

To agree the report.

 

TO FOLLOW

Additional documents:

Minutes:

20.1                The Committee received the Business Plan for 2016/17 which looked to identify major milestones, key targets and their measurement plus financial estimates for investment and administration. The Committee was also setting out expectations on its own performance including attainment of standards in CIPFA’s knowledge & skills framework, achievement of required training outcomes and achievement of administrative targets.

 

20.2                The Committee asked that the document be amended in the following ways

 

·         The Committee asked that under ‘Key issues to be considered by the Pension Committee’  the phrase ‘an acceptable level of risk’ should include  a reference  to the investment strategy and risk register.

 

·         To add ‘over the long term’ to the line that specified that the Committee also had to ensure there were sufficient assets readily available to meet all Fund liabilities.

 

 

·         One member asked that the Targets and Major Milestones list include the date for annual members benefit statement

 

·         The Committee requested that a note was included to explore regional training through pooling arrangements

 

 

RESOLVED

 

That the Committee agreed the Business Plan 2016/17 with the suggested amendments.

 

21.

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.

 

22.

Exempt Minutes

To approve as a correct record the exempt minutes of the meetings held on 29 January 2016.

 

TO FOLLOW

 

Minutes:

The exempt minutes of the meeting held on 29 January 2016 were agreed as a correct record and signed by the Chairman.

 

23.

Update on Fund Pooling proposals

To update the Committee (verbal update)

Minutes:

23.1                Graham Burrow updated members on the Fund Pooling proposals outlining the timeline moving forward.

24.

Admission Body Request

To agree the report.

Minutes:

RESOLVED

 

That the request for admission to the Fund be approved.

           

25.

Actuarial contract

To agree the report

Minutes:

RESOLVED

 

The Committee agreed the recommendation within the report.  

26.

BlackRock Global mandate

To consider the report.

Minutes:

RESOLVED

 

That the Committee agree the recommendation as per the officer advise.

27.

Investment Report - GMO

(Starting at 12:30pm for 45 minutes)

Minutes:

27.1                The item was deferred to a future  Committee meeting due to unavoidable personal circumstances.