Agenda and minutes

Agreed as accurate records.

It was noted that the minutes of the final Investment Strategy Sub-Committee had not been considered and would need to be attached to the next meeting of the Pensions Committee.

That Items 8, 9 and 10 be considered in private for the reasons stated on the agenda and for the rest of the items to be considered in public.

At the start of the meeting, the Chairman highlighted that the incorrect Terms of Reference had been included in the agenda pack in error. A copy of the updated version, following changes to the Constitution, approved in February 2015 were circulated at the meeting.

Consideration was given to the report which provided a review of financial markets and fund performance for the quarter ending 31 March 2015. It was noted that the total value of the fund’s investments as at 31 March 2015 was £801.3m. 

Reference was made to the performance of the Fund for the quarter ending 31 March 2015, showing an outperformance of 0.5%, with a return of 4.8% compared to the benchmark of 4.2%. One year figures showed returns of 10.4% (substantially ahead of the RPI+4% target return and in line with the benchmark). It was noted that over the three year period, the Fund returned 0.8% pa over the benchmark; the absolute rate was 9.9%, which was well ahead of the required investment return.

It was noted that the table (Performance Attribution Relative to Benchmark) contained a mixture of absolute performance and performance set against LIBOR which made it difficult to understand.  Officers were asked to investigate how the data could be better presented in future.

With regards to Outlook, the report summarised the issues which had confronted investors and also provided an overview of the global economic climate. Officers highlighted the history of the past 20 years had shown the importance of making timely and meaningful asset allocation adjustments to ensure strong Fund performance.

RESOLVED - 

1. That the report be noted.

Consideration was given to the report which provided an update on the latest pension administration performance data and early retirements for the year 2014/15.

In relation to Administration Performance Information, it was noted that after a significant low in October 2014, an overall performance measure of 90% had been maintained. Officers were commended for their ongoing partnership working with Capita which had resulted in a 98.96% performance measure in May 2015.

The report highlighted that in 2014/15 there had been 23 redundancy, 8 ill health and 52 voluntary (over 60) early retirements.

In terms of transfer requests, it was noted that for the period 1 April to 31 May 2015, there were 10 requests for a transfer out quotation, of which 6 were in relation to new freedoms. Despite these quotes, Officers confirmed that there had been no actual transfer requests. Moving forward, it was noted that Corporate Pensions Manager would oversee all transfer requests and ensure the Council was proactive in highlighting the potential risks associated with moving funds.

Referring to the Transfer Request information included on page 45 of the agenda, officers confirmed that they would contact Capita and request that it was more specific on its forms in future.

RESOLVED -

1. That the Pensions Committee:

i)     Reviewed the latest administration performance statistics.

ii)   Noted the latest information in respect of early retirements

iii) Noted the details on transfer requests received since 1 April 2015.

Consideration was given to the report which provided an update on the introduction of the local Pensions Board.

It was noted that an Internal Audit was conducted on Pensions Investments during quarter four of 2014/15 and this investigation had specifically looked at the governance arrangements around Pensions Investments. The Committee was assured to learn that the Internal Audit assurance opinion was Substantial. 

RESOLVED:

   1. That the report be noted.

This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985.  This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act).

The confidential report provided Members with performance updates on recent meetings with Fund Managers and an overview of engagement activities over the last quarter.

RESOLVED -

    1.  That the contents of the report be noted.

This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985.  This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act).

The confidential report provided details of a governance strategy for approval for the investment activities of the Pension Fund. The report set out the role and responsibilities of the Pensions Committee and new Pensions Board, as well as recommending a framework for the delegation of certain activities to the Corporate Director of Finance.

RESOLVED -

1.   That the Pensions Committee agree the Investment Framework, as detailed in the attached KPMG report to delegate specific powers to the Corporate Director of Finance to manage day-to-day investment activities of the Pension Fund.

This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985.  This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act).

The confidential report provided a further update on Pensions Administration performance.

RESOLVED -

1.  That the Pensions Committee note the ongoing officer action in relation to the Capita Pensions Administration contract and agree to extend the notice period for a further year until 31 October 2016.