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To Members of the Pension Fund Committee Notice of Meeting
MembershipChair – Councillor Dickie Dawes Councillors:
Co-opted Members:
The
agenda follows. Decisions taken at the meeting will become effective at
the end of the working day on 3 March 2003
unless
called in by that date for review by the appropriate Scrutiny Committee AGENDA
To approve the minutes of the meeting held on 15 November 2002 (PF3) and to receive for information any matters arising therefrom.
10:05 The
Financial Adviser will review the investment activity during the past
quarter and present an overview of the fund’s position as at 31 December
2002 using the following charts:- The spreadsheets included as tables 1 to 7 provide the detailed figures in support of the above charts. The Committee is RECOMMENDED to receive the charts and tables, and that the information contained in them be borne in mind insofar as they relate to items 7E to 8E in the Agenda. EXEMPT ITEMS The Sub-Committee will be invited to resolve to exclude the public for the consideration of the following exempt items (marked E) by passing a resolution in relation to each such item in the following terms: "that the public be excluded during the consideration of the following items in the Agenda since it is likely that if they were present during those items there would be a disclosure of "exempt" information as described in Part I of Schedule 12A to the Local Government Act, 1972 and specified below each item in the Agenda." Note: In the case of items 7E - 8E there are no reports circulated with the Agenda. Any exempt information will be reported orally. The Fund Managers’ reports relating to the Exempt Items at 7E and 8E and any information to be reported orally have not been made public and should be regarded as strictly private to members and officers entitled to receive them until after 21 May 2003.
10:20 The Independent Financial Adviser will report orally, giving an overview of the current and future investment scene and market developments across various regions and sectors. His oral report and the report (PF6E), (download as .doc file) which is not exempt, will be supported by relevant charts of economic and market trends, where appropriate, which are attached. Any exempt information will be reported orally. (Information Exempt in that it relates to the financial or business affairs of any particular person (other than the authority).) The Committee are RECOMMENDED to receive the oral report and charts, to consider any further action arising thereon, and to bear the Financial Adviser’s conclusions in mind when considering the Fund Managers’ reports.
10:30 (a) The Independent Financial Adviser will report orally, on the performance and strategy of Schroder Investment Management drawing on the charts at items 5 and 6E. (b) The representative(s) of the Fund Manager will:
In support of the above is their valuation report for the period to 31 December 2002, and a separate report for the period. At the end of the presentation members are invited to question and comment, the Fund Managers to respond and, finally:- (Information Exempt in that it relates to the financial or business affairs of any particular person (other than the authority).) The Committee is RECOMMENDED to consider and to adopt or amend any recommendations before them.
10:55 (a) The Independent Financial Adviser will report orally, on the performance and strategy of Deutsche Asset Management Ltd drawing on the charts at items 5 and 6E. (b) The representative(s) of the Fund Manager will:
In support of the above is their valuation report for the period to 31 December 2002, and a separate report for the period. At the end of the presentation members are invited to question and comment, the Fund Managers to respond and, finally:- (Information Exempt in that it relates to the financial or business affairs of any particular person (other than the authority).) The Committee is RECOMMENDED to consider and to adopt or amend any recommendations before them.
11:20 The Financial Adviser will, if necessary, summarise the foregoing reports of the Fund Managers’ and answer any questions from members. (Information Exempt in that it relates to the financial or business affairs of any particular person (other than the authority).)
11:25 Report by Director for Business Support & County Treasurer (PF10E). The Local Government Pension Scheme Regulations allow discretion to enable the Administering Authority to disregard a break from full-time education or from training for a trade or profession, to continue payment of a child’s pension. The report requests the Committee to exercise this discretion for an individual case. (Information Exempt in that it relates to the financial or business affairs of any particular person (other than the authority).) The Committee is RECOMMENDED to agree that the break in full-time education or training of the child named in the report be disregarded and the pension payment start again from August 2002 until July 2004 or earlier if the child ceases to be eligible.
11:30 Report by Director for Business Support & County Treasurer (PF11E). The report asks the Committee to consider the circumstances arising from a pension overpayment and to decide whether the Council should seek to recover the overpayment. The Committee is RECOMMENDED to consider the circumstances arising from a pension overpayment and to decide whether the Council should seek to recover the overpayment. (Information Exempt in that it relates to the financial or business affairs of any particular person (other than the authority).) ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC
11:35 Designated Member: Councillor Dermot Roaf Chair, Pension Fund Committee: Councillor Dickie Dawes Review Leader: Barry Phillips (Directorate for Business Support & County Treasurer) Best Value Committee at its meeting on 15 January 2003 considered a report which provided information on progress against the Action Plan of the Review. The Committee noted the progress made by the review team; requested a further report on implementation in January 2004; and referred the report to this Committee. This is attached at PF12. The Committee is RECOMMENDED to consider the progress made by the Review Team.
11:50 Report by Director for Business Support & County Treasurer (PF13). At the special meeting held on 6 November 2002, the Committee requested the officers to invite suitably qualified consultants to assist in the tendering for, and appointment of a global custodian. A global custodian is responsible for the safe keeping of assets, dividend and other income collection and settlement of trades in all asset classes and markets. The Pension Fund currently uses the custodial arms of its incumbent managers - Schroder Nominees Ltd for Schroders and Deutsche Bank AG for Deutsche Asset Management. Larger Investment Houses had traditionally provided joint management and custody arrangements for balanced fund mandates, and charged an all-inclusive fee for both services. However, there have recently been changes to this arrangement including the sale by Deutsche Bank of its custody operations to State Street Corporation. The Myners Report recommended that for larger institutional pension funds the appointment of a single global custodian is desirable. The report explains why there is a need for a single custodian and give information on the appointment of PSolve as consultants. An update of the tendering process and outstanding issues is also presented. The Committee is RECOMMENDED to authorise the Director for Business Support & County Treasurer, to be advised by the Independent Financial Adviser, to agree the appointment of a Global Custodian, for a period of three years, commencing from 1 April 2003.
12:00 Report by Director for Business Support & County Treasurer (PF14). During the quarter a number of issues have arisen in respect of the officers’ and Fund Managers’ involvement in matters of Socially Responsible Investment and Corporate Governance. These are summarised in the report and refer to:
The Committee are RECOMMENDED to note the issues contained within the report.
12:15 Report by Director for Business Support & County Treasurer (PF15). The report provides an update on progress made with the tendering process to appoint the new specialist managers. It sets out a recommended process and timetable for the short listing and interviewing of prospective fund managers. The Committee is RECOMMENDED to:
12:30 Report by Director for Business Support & County Treasurer (PF16). At the 24 May 2002 meeting, the Committee requested the officers to draw up an annual business plan, to contain financial estimates for the investment and administration of the Pension Fund and appropriate provision for member training. A recommended business plan for 2003/04 and the investment management and scheme administration budget for 2003/04 will be given. The business plan will also set out in detail all elected member training courses, specific provision for which is now contained within the budget. The Committee is RECOMMENDED to:
12:40 Report by Director for Business Support & County Treasurer (PF17). The Office of the Deputy Prime Minister (ODPM) is carrying out a "stock take" of the pension provisions for employees eligible to join the Local Government Pension Scheme (LGPS). Pension provisions for teachers and fire fighters are not included within this exercise. At the last Pension Fund Committee in November 2002 the Committee members agreed to take the discussion paper on the Stocktake exercise of the Local Government Pension Scheme (LGPS) back to their political groups for discussion and comment and that the outcome be collated and submitted to the next meeting, together with any feedback received from delegates at the Pension Fund Forum. The report advises the Committee of the next stages of this review together with information on a green paper on pension provision and other pension consultation papers. The Committee is RECOMMENDED to note the report and to discuss arrangements for comment to be made on the officers’ draft composite response so that the Council can respond to the ODPM and the Treasury within the deadlines set out above.
12:50 Report by Director for Business Support & County Treasurer (PF18). The current regulations for the Local Government Pension Scheme came into force from 1 April 1998 and gave employees in the Fund the power to improve the widower’s pension, enabling it to be based on the member’s service from 1972, at no additional cost to the member. Using the discretionary power within these regulations the County Council as an employer within the Fund had resolved to improve this package at no additional cost to the member. At the February 2002 meeting, the Committee had before them a report that set out the actions the County Council might take, and the implications thereon, to a series of informal suggestions made by the Department of Transport, Local Government & the Regions concerning additional provision. They decided to take no action; to request the County Council to contact the women employed by the County Council to advise them of the decision; and also to inform the other employers within the Oxfordshire Fund. Following a request made by a contributor to the Chairman of this Committee, members will be asked to reconsider the available options put to the February 2002 meeting. The Committee is requested to reconsider the decision taken at the 22 February 2002 meeting.
13:00 The Director for Business Support & County Treasurer reports as follows: Following last year’s consultation on allowances and pensions for the elected members, the Government has decided to give local authorities the power to determine which councillors are to be eligible for membership of the Local Government Pension Scheme (LGPS), on the advice and recommendation from the authority’s independent remuneration panel (IRP). Membership of the LGPS may be offered not only to elected members of the County Council, but also to the elected members of the District Councils. It is expected the regulations will be effective from 1 April 2003. Draft regulations have been given a very limited circulation but a copy obtained by the Society of County Treasurers lists the following key features:
Caution must be taken as the draft regulations are still in consultation stage and may yet be subject to change. Until the regulations are released, it will not be possible to say with any certainty how the benefit package will be structured for members. However, the benefits are likely to be very different from those available to officers and this will clearly be an issue for the consultation process. It is known that one of the consultees, The Association of Council Secretaries and Solicitors, has raised this as a concern as well as raising other potential differences of treatment between members and officers that have not been addressed e.g. ill-health retirement and how this could apply to members. The other main concern will be about the consistency of treatment across the country and even within funds (between county and district) if discretion is left to individual councils. The Democratic Services Unit are being kept informed of developments so that the IRP can be involved in due course. The Political Group Leaders meeting also discussed this matter at their meeting on 13 January. The meeting concluded that, subject to the provision of the new Regulations, it would be preferable for the Council to determine the principle of whether or not to pay pensions before referring it to the IRP. It also agreed that any decision on the principle should be considered by a wider group of the membership, for example, by Democracy & Organisation Committee. The
Committee is RECOMMENDED to note the report.
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