Agenda and minutes

Pension Committee - Friday 29 January 2016 10.00 am

Venue: Meeting Room 6 - Shire Hall, Gloucester. View directions

Items
No. Item

1.

Minutes - pdf icon PDF 120 KB

To approve as a correct record the Minutes of the meeting held on 27 November 2015.

Minutes:

The public minutes of the meeting held on 27 November 2015 were agreed as a correct record and signed by the Chairman.

2.

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 Cooper made a non-prejudicial declaration as a member of Stroud District

Council and governor at Archway School.

 

 

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.

 

3.

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 22 January 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.

4.

Members' Questions -

To answer any written members’ questions. The closing date/time for the receipt of questions is 10.00am on 22 January 2016.

Minutes:

No members’ questions were received.

5.

Local Government Pension Scheme: Investment Reform- Criteria and Guidance pdf icon PDF 87 KB

To note the report

Minutes:

5.1                   Members were reminded that as part of the July 2015 Budget statement, the Chancellor announced that the government would be working with Local Government Pension Scheme (LGPS) administering authorities to ensure they pool investments to significantly reduce costs, while maintaining overall investment performance.  The subsequent pooling criteria had been published by government on 26 November 2015 and covered 4 areas. These were size, costs, governance and infrastructure.

 

5.2                   Authorities had been asked to submit their initial proposals by 19 February 2016 and should include a commitment to pooling and a description of their progress towards formalising their arrangements with other authorities. Refined and completed submissions were expected by 15 July 2016.

 

5.3                   Members noted the report which went into detail on the criteria which included ‘Asset pools that achieve the benefit of scale’, ‘strong governance and decision making’, ‘reduced costs and excellent value for money ‘ and ‘an improved capacity to invest in infrastructure’. Some members commented on the risks that they saw within investing in infrastructure and noted that they would discuss this further when considering the detailed proposals in the exempt part of the meeting.

6.

Consultation on Revoking and Replacing the LGPS (Management and Investment of Funds) Regulations 2009 pdf icon PDF 120 KB

To consider a response to the consultation

Additional documents:

Minutes:

6.1                   Graham Burrow explained that in addition to publishing criteria on the pooling of Local Government Pension Scheme (LGPS) investments, the government also published a consultation on revoking and replacing the LGPS (Management and Investment of Funds) Regulations 2009. The consultation was partly to modernise the regulations, but also to facilitate the pooling of investments. The deadline for responding was on 19 February 2016.

 

6.2                   There was some discussion around Secretary of State powers proposed within the document to force funds to take actions in relation to pooling. The power were wider than that and allowed funds to be instructed if they were not following government guidance. Examples were provided as to situations where there might be interventions.

 

6.3                   Members consider the questions on the proposed revisions and the suggested responses to be made on behalf of the committee. It was explained that in response to the question as to whether six months was an appropriate period for transitional arrangements to remain in place, that it would seem sensible to increase the deadline to publish an Investment Strategy Statement to allow for a review after the triennial valuation. The concerns were outlined in more detail in the document.

 

6.4                   One member of the committee queried the key points outlined around derivatives being used as a risk management tool. He asked what was meant by derivative instruments may only be made in so far as they ‘facilitate efficient portfolio management’. In response it was explained that this was applied in the private sector and allowed increased flexibility. While members acknowledged that the term could be used as a ‘catch-all’ and noted concerns around how derivatives could be used inappropriately, it was acknowledged that it was a key part of effectively managing a mandate.

 

6.5                   There was further discussion on the concerns in relation to the Secretary of State’s powers outlined in the document. Concern specifically related to regulation 8 (2) (b) and how an instruction could conflict with objectives within the Funding Strategy Statement. Members requested that the concerns expressed on this within the report be strengthened to outline the responsibility the authority had for pensioners and rate payers.

ACTION                     Graham Burrow

 

 

RESOLVED

 

That the Committee delegates the Strategic Finance Director and Chairman of the Pension Fund to submit a response based around the key points within the annex of the report and taking on board members’ comments.

7.

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:

Exclusion of the press and public

 

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.

 

8.

The Pension Fund's initial Proposal on Pooling Investments

To consider the proposal

Minutes:

8.1                   Following the report at agenda item 6, the committee received a report which outlined proposals intended to be submitted to Department of Communities and Local Government.

 

8.2                   Members asked questions to clarify the proposals and made comments and suggested amendments to the documents.

 

RESOLVED

 

Approve the initial pooling proposal to DCLG

 

Delegate authority to the Strategic Finance Director in consultation with the Pension Committee Chairman to agree any amendments to this proposal following subsequent meetings.

9.

Exempt Minutes

To approve as a correct record the exempt minutes of the meetings held on 27 November 2015.

Minutes:

The exempt minutes of the meeting held on 27 November 2015 were agreed as a correct record and signed by the Chairman.