Agenda and minutes

Councillor Yvonne Constance attended for Councillor Richard Langridge

To approve the note of the informal meeting held on 14 June 2013 and the Minutes of the meeting held on 9 July 2013 (PF3) and to receive information arising from them.

The Minutes of the meetings held on 14 June 2013 and 9 July 2013 were approved and signed.

A written address from Nigel Williams, a trustee of Oxfordshire Community Foundation (OCF) – Agenda Item 19(a) – Employer Update (Exempt report).

10:15

Tables 1 to 10 are compiled from the custodian's records. The custodian is the Pension Fund's prime record keeper. He accrues for dividends and recoverable overseas tax within his valuation figures and may also use different exchange rates and pricing sources compared with the fund managers. The custodian also treats dividend scrip issues as purchases which the fund managers may not do. This may mean that there are minor differences between the tabled figures and those supplied by the managers.

The Independent Financial Adviser will review the investment activity during the past quarter and present an overview of the Fund’s position as at 30 June 2013 using the following tables:

In addition to the above tables, the performance of the Fund Managers over the past 18 months has been produced graphically as follows:

Graph 1 – Value of Assets

Graph 2 – 3 – Baillie Gifford

Graph 4 - Wellington

Graph 5 - 6 – Legal & General

Graphs 7 - 10 – UBS

The Committee is RECOMMENDED to receive the tables and graphs, and that the information contained in them be borne in mind, insofar as they relate to items 11,12 and13 on the agenda.

Mr Davies reported that, after the unprecedented asset appreciation seen in the first quarter, there had been a capital loss of approximately £21million in the second quarter. This comprised £11million in UK equities and £12million in bonds. Overseas equities had gained slightly. Bonds had fallen in value and fixed income liability had fallen by 4% giving a reduction of approximately £90million.

RESOLVED: to receive the tables and graphs; and that the information contained in them be borne in mind insofar as they related to items10, 11 and 12 on the agenda.

The Committee is RECOMMENDED that the public be excluded for the duration of items 7, 8, 9, 10, 11, 12 and 13 in the Agenda since it is likely that if they were present during those items there would be disclosure of exempt information as defined in Part I of Schedule 12A to the Local Government Act 1972 (as amended) and specified in relation to the respective items in the Agenda and since it is considered that, in all the circumstances of each case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

THE REPORTS RELATING TO THE EXEMPT ITEMS HAVE NOT BEEN MADE PUBLIC AND SHOULD BE REGARDED AS STRICTLY PRIVATE TO MEMBERS AND OFFICERS ENTITLED TO RECEIVE THEM.

NOTE: In the case of item13, there is no report circulated with the Agenda. Any exempt information will be reported orally.

RESOLVED: that the public be excluded for the duration of items 7,8, 9,10,11,12, 13 and 14 in the Agenda since it was likely that if they were present during those items there would be disclosure of exempt information as defined in Part 1 of Schedule 12A to the Local Government Act 1972 (as amended) and specified in relation to the respective items in the Agenda and since it was considered that, in all circumstances of each case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

10:20

To approve the exempt minutes of the informal meeting held on 14 June 2013 and of the meeting held on 9 July 2013 (PF7) and to receive information arising from them.

The exempt Minutes of  the meetings held on 14 June 2013 and 9 July 2013 were approved and signed.

10.25

Karen Thrumble (WM) will review the Fund’s performance for the 2012/13 year, including comparison to benchmark data from the WM Local Authority Pension Fund Universe.

Karen Thrumble, representing the WM Company, presented her report (PF8) on the Pension Fund’s investment performance for the 12 months ended 31 March 2013. The presentation compared Oxfordshire’s performance against its own customised benchmark and against the WM Local Authority Pension Fund Universe. A copy of her presentation is attached to the signed copy of the Minutes.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.                  Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority’s investments in funding the Pension Fund.

RESOLVED: to take note of the points raised in the presentation and to thank Karen Thrumble for her presentation.

11:05

Report of the Independent Financial Adviser (PF9).

The report sets out an overview of the current and future investment scene and market developments across various regions and sectors. It also provides the context for consideration of the reports from the Fund Managers. The report itself does not contain exempt information and is available to the public. The Independent Financial Adviser will also report orally and any information reported orally will be exempt information.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to receive the report, tables and graphs, to receive the oral report, to consider any further action arising on them and to bear the Independent Financial Adviser’s conclusions in mind when considering the Fund Managers’ reports.

The Committee considered a report of the Independent Financial Adviser (PF9) which set out an overview of the current and future investment scene and market developments across various regions and sectors. Members asked a number of questions, to which the Independent Financial Adviser responded.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

            3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority’s investments in funding the Pension Fund.

RESOLVED: To receive the report, tables and graphs and the oral report of the Independent Financial Adviser and to bear his conclusions in mind when considering the Fund Manager’s reports.

11:20

(1)               The Independent Financial Adviser will report orally on the performance and strategy of Wellington drawing on the tables at Agenda Items 5 and 9.

(2)               The representatives (Nicola Staunton and tbc) of the Fund Manager will:

(a)       report and review the present investments of their part of the Fund and their strategy against the background of the current investment scene for the period which ended on 30 June 2013;

(b)       give their views on the future investment scene.

In support of the above is their report for the period to 30 June 2013.

At the end of the presentation, members are invited to question and comment and the Fund Managers to respond.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to note the main issues arising from the presentation and to take any necessary action, if required.

The representatives, Nicola Staunton and Ian Link reported on and reviewed the present investments in relation to their part of the Fund and their strategy against the background of the current investment scene for the period which ended 30 June 2013.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

            3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority’s investments in funding the Pension Fund.

RESOLVED: to note the main issues arising from the report.

12:00

(1)               The Independent Financial Adviser will report orally on the performance and strategy of Baillie Gifford drawing on the tables at Agenda Items 5 and 9.

(2)               The representatives (Anthony Dickson and Ian McCombie (TBC) of the Fund Manager will:

(a)       report and review the present investments of their part of the Fund and their strategy against the background of the current investment scene for the period which ended on 30 June 2013;

(b)                 give their views on the future investment scene.

In support of the above is their report for the period to 30 June 2013.

At the end of the presentation, members are invited to question and comment and the Fund Managers to respond.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to note the main issues arising from the presentation and to take any necessary action, if required.

The representatives, Anthony Dickson and Ian McCombie reported on and reviewed the present investments in relation to their part of the Fund and their strategy against the background of the current investment scene for the period which ended 30 June 2013.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

            3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority’s investments in funding the Pension Fund.

RESOLVED: to note the main issues arising from the report.

12:40

Attached at PF12 is the report of the Independent Financial Adviser on the main issues arising from the officer meetings with UBS Global Asset Management and Legal & General Investment Management. These reports should be read in conjunction with information contained in the tables (Agenda Item 5).

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to note the main issues arising from the reports contained in PF12 and to take any necessary action, if required.

The Committee considered two notes of meetings which took place since the last meeting (PF12) with representatives from UBS Global Asset Management and Legal & General Investment Management.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

            3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority’s investments in funding the Pension Fund.

RESOLVED: to note the reports.

12:45

The Independent Financial Adviser will, if necessary, summarise the foregoing reports of the Fund Managers and answer any questions from members.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund. 

The Independent Financial Adviser reported that no summary was required.

12:50

This report (PF14) seeks the Committee’s agreement to a revised securities lending policy following the change of Custodian arrangements.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

The Committee is RECOMMENDED to:-

(a)      delegate to officers responsibility for reviewing and approving the securities lending approved counterparty list;

(b)    agree any changes required to the securities lending collateral policy; and

(c) restrict the value of securities on loan to 25% of the total fund

(d) agree the continued use of discretionary lending for UK and overseas securities.

The Committee considered a report (PF14) which sought agreement to a revised securities lending policy following the change of Custodian arrangements.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

            3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information.

RESOLVED:

(a)               to delegate to officers the responsibility for reviewing and approving the securities lending approved counterparty list;

(b)               not to make any changes to the securities lending collateral policy;

(c)               to restrict the value of securities on loan to 25% of the total fund; and

(d)               to restrict the continued use of discretionary lending for UK and overseas securities.

READMISSION OF PRESS AND PUBLIC

14:00

The draft Annual Report and Accounts for 2012/13 is before the Committee at PF15 for comment and amendment. The finalised report will be submitted to the Committee’s December meeting for adoption.

Mary Fetigan, representing Ernst & Young, the Fund’s external auditors will attend to present any key findings of their audit and answer questions from the Committee.

The Committee is RECOMMENDED to receive the draft report and accounts for 2012/13.

The Committee considered the draft Annual Report and Accounts for 2012/13 (PF15) which showed the final accounts for the Pension Fund ended 3131 March 2012.

Mary Fetigan, representing Ernst & Young, the Fund’s external auditors, attended the meeting to present the findings and to respond to questions from Members. She reported that there were a small number of areas to conclude on but no significant risk, or any major concerns or issues had been identified to date.

Mary Fetigan was thanked for her presentation.

RESOLVED: to receive the draft report and accounts for 2012/13 subject to the meaning of the text in note 9, page 29, being made clearer.

The report (PF16) covers the income and expenditure of the Pension Investment and Administration Teams during 2012/13 and explains key variations from the agreed budget.

The Committee is RECOMMENDED to receive the report PF16 and to note the outturn position.

The Committee had before them a report (PF16) which set out the income and expenditure for both the Pension Investment and Administration Teams during 2012/13 and which also explained key variations from the agreed budget.

Mr Gerrish pointed out that the previous Chairman had arranged for in-house member training for members of the Committee and asked if this, or an alternative, would be arranged in the future. Mr Collins undertook to investigate whether member training was an allowable expense for the Pension Fund Committee and report back.

The Committee AGREED to:

(a)               receive the report PF16 and to note the outturn position; and

(b)               to request the Officers to begin organising member/staff training in the new regulations.

14:30

The report PF17 provides details of the annual review of the performance of the Pensions Administration Team highlighting key performance indicators.

The Committee is RECOMMENDED to note the report PF17.

The Committee had before them a report (PF17) which provided details of the annual review of the Pensions Administration Service, highlighting key performance indicators and any key issues over the past year.

RESOLVED: to note the report PF17.

14:40

The report (PF18) provides an opportunity for the Committee to undertake a formal review of its major policy documents, held in line with the LGPS Regulations.  The last such comprehensive review of policies was in June 2012, and the report provides an update of any key changes since that date.

The Committee is RECOMMENDED to approve the revised policy documents as set out in Annexes 1-6 to this report, noting the main changes in the documents as discussed above.

The Committee considered a report (PF18) which provided an opportunity for the Committee to undertake a formal review of its major policy documents, held in line with the LGPS Regulations. The last such comprehensive review of policies was in June 2012, and the report provides an update of any key changes since that date.

RESOLVED: to approve the revised policy documents as set out in Annexes

1 – 6 of the report PF18, noting the main changes in the documents; and also noting that the Officers would be taking the necessary action to address the issues round member training as highlighted in paragraph 10 of the main report PF18.

14:50

The attached reports (PF19) seek Committee approval for any new admissions to the Fund, as well as update the Committee on the status of any current employer which impacts on future Scheme membership. There are two reports for this item as one contains exempt information and therefore has to be considered in exempt session.

(a)               This report (PF19) updates the Committee on a previous application for admission to the Fund, and details a current case regarding the closure of a scheme employer's admission agreement.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.                  Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

The Committee is RECOMMENDED to

a)       note the progress made on the application; and

b)       authorise the officers to continue to seek recovery of these monies on an agreed recovery period.

(b)               This report (PF19) updates members on recent employer issues including applications for admission and the closures of scheme employers.

The Committee is RECOMMENDED to:

a)   note the progress of previously approved applications for admitted body status;

b)  approve the application for admitted body status by Adviza;

c)   delegate the approval of new admission bodies detailed above to the Service Manager (Pensions) following consultation with the Chairman of this Committee; and

d)   note the cessation of scheme employers as detailed in the report.

The Committee considered two reports, the first of which (PF19(a)) gave an update on a previous application for admission to the Fund and which detailed a current case regarding the closure of a scheme employer’s admission agreement.  The second report (PF19(b)) updated Members of the Committee on recent employer issues including applications for admission and the closures of scheme employers.

With regard to report PF19(a), the Committee RESOLVED to note the exempt report and to authorise the officers to take the necessary action as set out in the report.

The public were excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

            3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the  information.

With regard to report PF19(b), the Committee RESOLVED to:

(a)   note the progress of previously approved applications for admitted body status;

(b)   approve the application for admitted body status by Adviza;

(c)   delegate the approval of new admission bodies detailed in the report to the Service Manager (Pension), following consultation with the Chairman; and

(d)   note the cessation of scheme employers as detailed in the report.

Also to request the Officers to:

(a)   ensure that the schools/and or academies understand, on admission, that they would be underwriting any risk under the new regulations;

(b)   submit a report to a future meeting, following advice from the Actuary, assessing the level of risk to the Pension Fund associated with the cessation of admission bodies;

(c)   arrange a brief training session on transferable pensions; and

(d)   request the officers to write to all those bodies who had been admitted  the Scheme under the old regulations requesting them to send the Pensions Manager a copy of their annual balance sheet on a year to year basis.

15:00

The report (PF20) updates members on the recent consultation exercises on the New Look LGPS 2014, and on future Governance Arrangements. It also seeks Committee approval to the response to the recent Call for Evidence on the future arrangements for the LGPS.

The following papers are annexed to the report PF20:

Annex 1  and  Annex 2 – copies of consultation responses made by this Committee

Annex 3 – draft consultation response for consideration by this Committee.

The Committee is RECOMMENDED to note the consultation responses included at Annexes 1 and 2, and agree any changes to the draft consultation response at Annex 3 for submission to the Department for Communities and Local Government.

The Committee had before them a report (PF20) which gave an update on the recent consultation exercise on the New Look LGPS 2014, and on future Governance arrangements. The Committee’s approval was also sought to a draft response (Annex 3) to the recent Call for Evidence on the future arrangements for the LGPS.

Attached to the report were the following annexes:

Annexes 1 and 2 – copies of previous consultation responses;

Annex 3 -  - draft consultation response.

The Committee AGREED to:

(a)               note the consultation responses set down at Annexes 1 and 2; and

(b)               authorise Sean Collins to formulate a committee response to the draft consultation, as set out at Annex 3, for submission to the Department for Communities & Local Government, following final consultation with the Chairman.

15:20

Officers will provide an oral update on the on-going discussions in respect of the future management of the Oxfordshire Fund, as agreed at the 14 June 2013 meeting.

The Committee is RECOMMENDED to note the report.

Members discussed some of the issues being considered as part of the on-going discussions about the future management of the Oxfordshire Fund, as agreed at the 14 June 2013 meeting.

There was some uncertainty about which body within the County Council would be taking the final decision.

The Committee RESOLVED to:

(a)               note the report; and

(b)               request the Chairman and the Officers to take legal advice as to where the final decision should be taken with regard to the future management of the Oxfordshire Pension Fund.

15:30

The report (PF22) will provide the Committee with summary details of the amounts written off in the last quarter in accordance with Financial Regulations of the Fund.

The Committee is RECOMMENDED to note the report.

The Committee had before them a report (PF22) which set out summary details of the amounts written off in the last quarter in accordance with Financial Regulations of the Fund.

15:35

To remind Members of the Committee that the Annual Pension Forum will take place on Friday 13 December 2013at 10:00 am.

The Committee were reminded that the Annual pension Forum would take place at Unipart House on Friday 13 December 2013 at 10.00am.