Agenda item

There will be an update on progress.

The Pension Fund Committee, at their meeting on 11 March 2015, noted the current position (report attached at LPB6); agreed a nominee and a named substitute to represent the Committee on the Shadow Joint Committee Oversight Board and asked to receive regular briefings by email unless there were significant issues that arose which would require an informal briefing meeting for Committee members. The Committee also agreed to reserve 1 July 2016 in their diaries as the date for the agreement of the final submission.

Prior to receiving the update, Board members noted that the Pension Fund Committee had noted the current position (as detailed in the attached report to the Board); agreed a nominee (Cllr Stewart Lilly) and a named substitute (Cllr Nick Hards)  to represent the Committee on the Shadow Joint Committee Oversight Board. The Committee had also asked to receive regular briefings by email, unless there were significant issue that arose which would require an informal briefing meeting for Committee members. The Committee had also agreed to reserve 1 July 2016 in their diaries as the date for the agreement of the final submission. Board members were invited to attend this meeting and to give their views.

Sean Collins reported that the submission had been agreed on 29 January and had been signed off by all 10 Pension Funds comprising Project Brunel. Favourable feedback had also been received from Marcus Jones MP at the end of March. He explained that the Government had envisaged that all collaborated Pension Funds would join an ACS (Authorised Contractual Scheme) and wanted to satisfy themselves that the chosen alternative Scheme was the best way of working. He stressed that Project Brunel were keen for their chosen structure to be a properly regulated body. Arrangements had therefore been made for members/officers comprising Project Brunel to present their chosen structure to a panel of experts in May.

As part of the Board’s discussion on disinvestment in non-socially responsible investment, Sean Collins pointed out that the Government had advised that under the Regulations, Pension Funds must take into account the best interests of the scheme members when decisions were taken. He added that the Oxfordshire Pension Fund Committee had always wanted their fund managers to engage with companies in regard to issues of this kind and they would only take a decision to disinvest if it was believed that the companies were not acting in the best interests of the scheme members. David Locke reported that he believed that in some organisations, staff were required to sign their name against a statement that they understood the consequences of diversification.

Sean Collins reported that one of the first tasks of Project Brunel would be to agree a set of high level investment principles. An early draft which had been drawn up had not contained a divestment line in it. The pool had agreed that they would carry out a risk analysis and if the factors indicated that it would be unwise to invest, the investment would not happen. It had been agreed that a simple governance model be set up so as to avoid complications in what would be an abundance of governance arrangements.

Mr Collins reported that the Oversight Board had met once to date and had elected an interim independent chair, John Finch, who had recently retired from a role as consultant in the same field. A new Chairman would be elected after July.

Sean Collins was asked by the Board to explain the structure of the officers’ Operations Group. The Chair and the two Vice-Chairs of the Group had the role of front-lining to the Government. He explained that there were 6 work streams reporting to the Operations Group, the Operations Group would then report on to the Oversight Board. Each work stream was made up of 2/3 shared leads of offers from the Operations Committee. The functions of the work streams were as follows:

·         work stream 1 – 3 officers looking at high level structure and liaising with Government, and the other pools;

·         work stream 2 – group looking at detailed structure and resourcing requirements;

·         work stream 3 – group looking at investment principles and the sub-fund structure, including principles regarding the sharing of costs;

·         work stream 4 – group looking at cost/saving patterns and transitions issues;

·         work stream 5 – group looking at infrastructure;

·         work stream 6 – group focusing on reporting and performance management and how it is ensured that individual funds are kept aware of current issues.

Sean Collins stated that the ultimate aim of Project Brunel was to ensure that the sub-fund structures met the investment requirements of the individual Committees, as determined by their liability profiles.

Sean Collins advised the Board that there would be a special meeting of the Pension Fund Committee on 1 July 2016 to which Members of the Board would be invited to participate in the discussion around the table. Briefings would be given to Committee and Board members as and when the information was available.

Members of the Board asked if the Government would, in the future, be stipulating that investment be made in large national building projects such as Crossrail. Sean Collins responded that this was the subject of a debate with the Government, but the specifics relating to the sub funds would be set up to meet the needs of the Oxfordshire Pension Fund Committee to take into account risk, capital growth and what liquidity and protection it would require.

In conclusion, Sean Collins informed the Board that from 1 April 2016, his job role was changing to encompass pensions only, as a result of all the work entailed in managing the change.