Agenda, decisions and minutes

To approve the Minutes of the meeting held on 15 September 2017 (PF3) and to receive information arising from them.

City Councillor Jean Fooks attended in place of City Councillor James Fry.

Councillors Bulmer, Fooks, Howson, Lygo, Sanders and Thompson each declared personal interests as members of the Pension Fund Scheme under the provisions of Section 18 of the Local Government Act 1989. Cllr Mark Lygo also declares a personal interest in respect of his role as a retained fire-fighter.

The Minutes of the last meeting held on 15 September 2017 were approved and signed as a correct record.

With regard to Minute 52/17, resolution (b), Sean Collins reported that the Scheme Advisory Board had received a mixed response in respect of the establishment of a Cross Pool Information Forum, to which this Committee had voted against, adding that all chairs of Pension Fund Committees were to be invited to a meeting where this would be addressed.

There were no requests to address the meeting or to submit a petition.

The unconfirmed Minutes of the Local Pension Board which met on 20 October 2017 are attached for information only at PF5.

The unconfirmed Minutes of the Local Pension Board held on 20 October 2017 were noted.

10:10

This is the second report of the Local Pension Board to the Pension Fund Committee in response to the request from the new Chairman of the Committee to have a dedicated item on each Committee Agenda where the Committee can properly discuss the work of the Board and any issues identified (PF6).

The Committee is RECOMMENDED to:

(a)                note the comments of the Board in respect of the workload associated with the employer management programme, and the potential benefits of increased investment in specialist project management support;

(b)               consider whether they wish to ask the Board to undertake any specific follow up work in respect of the items on the General Data Protection Regulations or Employer Covenants  included elsewhere on their agenda today; and

(c)                consider the need for a further risk in respect of changes in Government Policy.

The Committee had before them the second report of the Local Pension Board to this Committee (PF6). The Committee was asked to note the comments of the Board and to undertake any suggested action as set out at (b) and (c) below.

RESOLVED:  to thank the Board for the report and to:                                                   

(a)  note the comments of the Board in respect of the workload associated with the employer management programme, and the potential benefits of increased investment in specialist project management support;

(b)  consider at Agenda Items 11 and 20 whether to ask the Board to undertake any specific follow up work in respect of the items on the General Data Protection Regulations and Employer Covenants included elsewhere on the Agenda; and

(c)  consider at agenda item 8 the need for a further risk in respect of changes in Government Policy.

10:20

This report (PF7) reviews progress against the key service priorities as set out in the Annual Business Plan for the 2017/18 financial year.

The Committee is RECOMMENDED to note progress against the key service priorities identified in the 2017/18 financial year.

The Committee had before them a report (PF7) which reviewed progress against the key service priorities as set out in the Annual Business Plan for the 2017/18 financial year.

RESOLVED: to note the progress against the key service priorities identified in the 2017/18 Business Plan.

10:50

The report (PF8) updates the Committee on the Fund’s Risk Register, updating the position on risks reported to the last meeting and adding in new risks identified in the intervening period.

The Committee is RECOMMENDED to:

(a)                 note the current risk register;

(b)               consider the comments from the Pension Board; and

(c)                determine any changes to the current risk register.

The Committee considered a report (PF8) which gave an update on the position on risks since the last meeting and adding in new risks identified in the intervening period. The report also asked the Committee to consider the comments from the Pension Board.

RESOLVED:

(a)  to note the current risk register;

(b)  in addition to risk 17 to include change to Government Policy leading to a significant change in liability profile or cash flow as a result of structural changes, as an unknown risk in a note situated at the end of the Register, but to escalate it into the Register should a specific issue begin to rise on the horizon;

(c)  in respect of risk 14 – the risk of a breach of data security – Committee and Board to receive further written information from the insurer on the amount the Fund was covered for in respect of cyber-attack;

(d)   in relation to risk 7 – Employer Default – LGPS - to address this later in the Agenda at confidential item 20, ‘Employer Covenants’;

(e)  in relation to risk 10 - Insufficient resources to deliver responsibilities – LGPS and FSPS – to address the issue relating to staff resource later in the Agenda at Agenda Item 10 ‘Administration Report; and

(f)   in relation to risk 11 – Insufficient skills and knowledge on Committee – LGPS and FSPS – a training day for all members of the Committee and the Board to take place in the Spring 2018.

11:00

The report (PF9) updates the Committee on the work of Project Brunel to develop the Brunel Pension Partnership.

The Committee is RECOMMENDED to:

(a)   note the latest position in terms of the on-going development of the Brunel Pension Partnership; and

(b)   delegate to the Director of Finance, as the nominated Shareholder Representative, the responsibility for the approval of the Brunel Business Plan at the Company AGM, following consultation with the Chairman, Deputy Chairman and Opposition Spokesperson of the Committee.

The Committee had before them a report (PF9) which gave an update on the work of the Brunel Pension Partnership.

The Committee noted that Cllr Bulmer had been elected Vice-Chairman of the Brunel Oversight Board.

RESOLVED: to

(a)  note the latest position in terms of the on-going development of the Brunel Pension Partnership;

(b)  agree to delegate to the Director of Finance, as the nominated Shareholder Representative, the responsibility for the approval of the Brunel Business Plan at the Company AGM, following consultation with the Chairman, Deputy Chairman and Opposition Spokesperson of this Committee; and

(c)  request the officers to circulate the Minutes of the meeting of the Oversight Board to members of the Committee and the Local Pension Board when they contain information on special reserve matters; and

(d)  (nem con) request the Independent Financial Adviser to include a review of the current split between active and passive management, and the alternative options to a low risk allocation in producing his report to the March meeting on asset allocation and the Brunel portfolios.

11:30

This report (PF10) updates the Committee on the latest position on administration issues outside of the business plan, including the latest position on new admissions to the Fund, employer cessations and any debt write offs.

The Committee is RECOMMENDED to note the report.

The Committee had before them a report (PF10) which gave an update on the latest position on administration issues outside of the business plan, including the latest position on new admissions to the Fund, employer cessations and any debt write - off’s.

RESOLVED:

(a)  to note the report;

(b)  (nem con) that the Chairman write to the software provider on the Committee’s behalf expressing its concern regarding the inadequacy of their unsatisfactory response to the needs of Oxfordshire in relation to inconsistencies in performance data results which in turn is affecting the performance of the Pensions Team; and

(c)  to thank the Pension Team very much for progress made.

11:40

Attached at PF11 is an update on the provisions of the General Data Protection Regulations (GDPR).

The Committee is RECOMMENDED to note the report.

The Committee had before them at PF11 an update on the provisions of the General Data Protection Regulations (GDPR).

RESOLVED: to note the report.

11:45

The attached report sets out changes to an existing discretionary policy and seeks the Committee’s view on the introduction of a new discretionary policy (PF12).

The Committee is RECOMMENDED to:

(a)  comment on and approve the proposed changes to the Administration Strategy; and

(b)  confirm whether the Committee wishes to introduce a voluntary scheme pays option, providing criteria in paragraph 11 are met.

The Committee considered a report (PF12) which set out changes to an existing discretionary policy and which sought a view on the introduction of a new discretionary policy.

RESOLVED: to

(a)  approve the proposed changes to the Administration Strategy with the proviso to request the officers to investigate the possibility of ratchetting up the charges for late or incorrect information for repeat offenders and to report back to Committee with the findings; and

(b)  introduce a voluntary scheme pays option, providing the criteria as set out in paragraph 11 of the report are met.

11:50

Tables 1 to 4 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 September 2017 using the following tables:

In addition to the above tables, the performance of the Fund has been produced graphically as follows:

Graph 1 – Market value of the Fund over the last three years

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 15, 16, 17, 18 and 19 on the agenda.

The Independent Financial Adviser reviewed the investments activity during the past quarter and presented an overview of the Fund’s position as at 30 September 2017.

Mr Davies reported that the overall value of the Fund over the last quarter had increased by £20m which was largely due to Equity gains and some in real estate.

RESOLVED: to receive the tables and graphs, and that the information contained in them be borne in mind, insofar as they relate to items 15, 16, 17, 18 and 19.

The Committee is RECOMMENDED that the public be excluded for the duration of items 15, 16, 17, 18, 19 and 20 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 items 16 and 17, there are no reports circulated with the Agenda. Any exempt information will be reported orally.

RESOLVED: to exclude the public for the duration of items 15, 16, 17, 18, 19 and 20 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 the circumstances of each case, the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

11:55

The report of the Independent Financial Adviser (PF15) sets out an overview of the current and future investment scene and market developments across various regions and sectors. 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 had before them a report of the Independent Financial Adviser (PF15) which set out an overview of the current and future investment scene and market developments across various regions and sectors. The report itself did not contain exempt information and was available to the public. Information that the independent Financial Adviser reported orally would be exempt information.

The public was excluded during this item because its discussion in public 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 was considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighed 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 to bear the Independent Financial Adviser’s conclusions in mind when considering the Fund Managers’ reports.

12:05

(1)            The Independent Financial Adviser will report orally on the performance and strategy of Adams Street drawing on the tables at Agenda Items 13 and 15.

(2)            The representatives (Ana Maria Harrison 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 September 2017;

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

In support of the above is their report for the period to 30 September 2017.

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 Independent Financial Adviser reported orally on the on the performance and strategy of Adams Street, drawing on the tables at Agenda items 13 and 15.

The representatives, Ana Maria Harrison and Sergey Sheshuryac of the Fund Manager presented their approach to investments in relation to their part of the Fund and their strategy against the background of the current investment scene.

At the end of the presentation they responded to questions from members of the Committee.

The public was 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 outweighed 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 in funding the Pension Fund.

RESOLVED: to:

(a)  note the main issues arising from the presentation; and

(b)  request the Independent Financial Adviser to review the current allocations to public and private equity in his March 2018 report.

12:45

The Independent Financial Adviser will report on and review the investments within the allocation to Private Equity as a whole. Members will be invited to question and comment (PF17).

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 Independent Financial Adviser reported on and reviewed the investments within the allocation to Private Equity as a whole. The Committee was invited to question and comment (PF17).

The public was 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 was considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighed 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

(a)  note the main issues arising from the presentation; and

(b)  request the officers to bring a further report to the 9 March 2018 meeting with information on how the Brunel Pension Partnership intends to structure Private Equity.

13:00

The Independent Financial Adviser will report on the meetings with UBS, Wellington, Insight (Diversified Growth Fund) the Committee as well as update the Committee on any other issues relating to the Private Equity portfolio.

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 and to take any necessary action, if required.

The Independent Financial Adviser reported on the officers’ meetings with UBS, Wellington, and Insight (Diversified Growth Fund) as well as on any other issues relating to the Private Equity portfolio (PF18).

The public was excluded during this item because its discussion in public was 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 was considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighed 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 reports.

13:05

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. 

There were no further issues requiring summary.

13:10

This report provides the Committee with further analysis of current levels of Pension Fund deficits and the financial strength of the employers responsible for meeting these deficit payments. The Committee is invited to consider any changes they would wish to make to the current Funding Strategy Statement in light of this report (PF20).

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 the information is supplied in commercial confidence.

The Committee is RECOMMENDED to consider the information contained within this report and determine any proposed changes to the current Funding Strategy Statement as the basis for a future consultation.

The Committee considered a report (PF20) which provided further analysis of current levels of Fund deficits and the financial strength of the employers responsible for meeting these deficit payments. Members were invited to consider any changes they would wish to make to the current Funding Strategy Statement in light of this report.

The public was 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 category:

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

RESOLVED: (nem con) to note the information contained in the report and that a further report be brought to the 9 March 2018 meeting to include further information on issues relating to asset security in the event of an employer becoming bankrupt; and any ensuing proposals for change to the current Funding Strategy Statement as a basis for future consultation.

13:15

This item covers any issues concerning Corporate Governance and Socially Responsible Investment which need to be brought to the attention of the Committee.

No further issues were brought.

13:20

There will be an oral report on arrangements for the next Annual Pension Forum.

Sally Fox announced that the Pension Forum would take place on Wednesday 17 January 2018 at Unipart House.

All members of the Committee and the Board were encouraged to attend as it would be an opportunity to meet with scheme employers.