Meeting documents

Pension Fund Committee
Friday, 24 November 2006

PF241106

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To Members of the Pension Fund Committee

Notice of a Meeting of the Pension Fund Committee

Friday 24 November 2006 at 10.00 am County Hall, Oxford


Derek Bishop
Head of Democratic Services

15 November 2006

Contact officer: Marion Holyman Tel: 01865 810177; E-Mail

Membership

Chairman – Councillor Rodney Rose

Deputy Chairman – Councillor David Harvey

Councillors:

Bill Bradshaw

Neville Harris

Jim Moley

Bill Service

David Wilmshurst

 

Co-opted Members:

Michael Howes

Bob Price

 

Notes:

  • A lunch will be provided

  • Date of next meeting: 23 February 2007

If you have any special requirements (such as a large print version of these papers or special access facilities) please contact the officer named on the front page, but please give as much notice as possible before the meeting.

AGENDA

Addenda

  1. Apologies for Absence and Temporary Appointments

  2. Declarations of Interest – see guidance note

  3. Minutes

    4. To approve the minutes of the meeting held on 25 August 2006 (PF3) and to receive for information any matters arising therefrom.

  4. Petitions and Public Address

  5. Overview of Past and Current Investment Position

10.05 Tables 1 to 7 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 2006 using the following tables:

Table 1 - provides a consolidated valuation of the Pension Fund at 30 September 2006;

Tables 2 to 4 - provide details of the individual managers’ asset allocations and compare these against their benchmark allocations;

Table 5 - shows net investment/disinvestments during the quarter;

Tables 6 to 7 - provide details on the Pension Fund’s Private Equity;

Tables 8 to 10 - provide investment performance for the consolidated Pension Fund and for the four Managers for the quarter ended 30 September 2006.

(PF5 - Overall Valuation of Fund at 30 September 2006 - Tables 1-7 - download as .xls file)

(PF5 - OCC Pension Fund - Overall Valuation of Fund as at 30 September 2006 - Tables 8-10 - download as .xls file)

T

The Committee is RECOMMENDED to receive the tables, and that the information contained in them be borne in mind, insofar as they relate to items 7E, 8E and 9E on the agenda.

EXEMPT ITEMS

The Committee is RECOMMENDED that the public be excluded for the duration of items 6E, 7E, 8E, 9E, 10E, 11E and 12E 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 7E, 8E and 9E there are no reports circulated with the Agenda. Any exempt information will be reported orally.

THE QUARTERLY REPORTS FROM THE FUND MANAGERS RELATING TO THE EXEMPT ITEMS AT 7E, 8E and 9E AND ANY INFORMATION TO BE REPORTED ORALLY HAVE NOT BEEN MADE PUBLIC AND SHOULD BE REGARDED UNTIL AFTER 24 FEBRUARY 2007 AS STRICTLY PRIVATE TO MEMBERS AND OFFICERS ENTITLED TO RECEIVE SUCH REPORTS AND INFORMATION.

  1. Overview and Outlook for Investment Markets

    (See also Addenda)

    2. 10.25 Report of the Independent Financial Adviser (PF6E) (download as .doc file)

    The report 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 and tables, 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.

  2. Report of Main Issues arising from Reports of the
    3. Fund Managers not represented at this meeting

    10:35 The Independent Financial Adviser will report orally on the main issues arising from the meetings with Baillie Gifford and Legal & General 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 and to take any necessary action, if required.

  3. UBS Global Asset Management

    4. 10:40 (1) The Independent Financial Adviser will report orally on the performance and strategy of UBS Global Asset Management drawing on the tables at Agenda Items 5 and 6E.

    (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 2006;

    (b) report on whether or not voting rights have been exercised and if so details of the rights exercised;

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

    In support of the above is their report for the period to 30 September 2006.

    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.

  4. Alliance Bernstein

11:05

(1) The Independent Financial Adviser will report orally on the performance and strategy of Alliance Bernstein drawing on the tables at Agenda Items 5 and 6E.

(2) The representatives (Mr G Blunden and Mr P Rudden) 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 2006;

(b) report on whether or not voting rights have been exercised and if so details of the rights exercised;

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

In support of the above is their report for the period to 30 September 2006.

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.

  1. Summary by the Independent Financial Adviser

    2. 11:30 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.

  2. Annual Review of the Independent Financial Adviser

    3. 11:35 Report by the Head of Finance & Procurement (PF11E).

    The report reviews the activities of the Independent Financial Adviser for the twelve-month period ending 30 November 2006 and recommends that he is reappointed for a further twelve months.

    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 lead to the disclosure of the amount proposed to be incurred.

    The Committee is RECOMMENDED to re-appoint the Independent Financial Adviser for a further twelve months and to upgrade his fee by 2.95%, in line with the Local Authority Green Book Pay Award for 2006/07, to take effect from 1 December 2006.

  3. Additional Voluntary Contributions (AVC) - Annual Review

11:50 Report of the Head of Finance & Procurement (PF12E).

The review considers the quality of service provided by the Prudential, explores the range of investment funds available and recommends the discontinuation of a default option.

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 company concerned.

The Committee is RECOMMENDED to:

          1. note the report and to confirm the continued use of the Prudential as the Council’s AVC provider;

          2. continue with its current arrangement of having no default option for its AVC’s but to ensure that the Prudential annually notify AVC contributors of the potential risks of investing in higher risk funds as they approach retirement;

          3. add the four funds set out in Table 2, Annex 2 to the Council’s range of available AVC funds.

ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC

  1. Oxford City Council Motion
    2. Investment and Representation

    12:05 Report of the County Solicitor and the Head of Democratic Services (PF13).

    The report provides information on the issues raised by the Oxford City Council’s motion on investment of the pension fund for social good and seeking three member nominated representatives with full voting rights on the Committee.

    The Committee is RECOMMENDED:

    (a) to continue to act within its agreed Statement of Investment Principles in the best interests of the Scheme;

    (b) in the light of the Government’s proposal to undertake statutory consultation on the local governance arrangements of the LGPS, to defer consideration of the City Council’s request about membership until the governance arrangements have been determined.

  2. Changes to the LGPS

    3. 12:20 The Head of Finance & Procurement will report orally on progress of the consultation on the 'New Look' 2008 LGPS.

    The Committee is RECOMMENDED to note the report.

  3. Formal Adoption of the Pension Fund Annual Report
    4. and Accounts for 2005/06

    12:30 A draft of the Annual Report and Accounts was approved at the meeting of the Committee on 25 August 2006 and the Committee is now asked formally to adopt the Report. A copy of the Pension Fund Annual Report and Accounts 2005/06 has been circulated separately to members of the Committee and is also available for public inspection.

    The Committee is RECOMMENDED to adopt formally the Pension Fund Annual Report and Accounts 2005/06.

  4. Pension Administration Team Structure

    (See also Addenda)

12:35 Report of the Head of Finance & Procurement (PF16).

The report recommends the strengthening of the pension administration team in recognition of current workloads and the substantial changes anticipated in the national LGPS agenda.

The Committee is RECOMMENDED to:

          1. approve the proposed new structure for the pension team at an additional cost of £12k in 2006/07 to be met from the Pension Fund; and

          2. note that the cost of £71k in 2007/08 will be incorporated into the pension administration budget proposals for next year to be presented for members’ approval in February 2007.

  1. Application for Admission as a Transferee Admission Body

    2. 12:45 Report by the Head of Finance & Procurement (PF17).

    The report sets out an application from Barnardo's to become an admitted body as County Council staff working at St Nicholas House will transfer to Barnardo’s.

    The Committee is RECOMMENDED to approve the application of Barnardo’s subject to their agreeing to the terms of the Admission Agreement and this Committee being informed when the agreement is signed.

  2. Payment of Dependent’s Pension Benefit

    3. 12:50 Report by the Head of Finance & Procurement (PF18).

    The report informs the Committee that a decision has been made under the powers delegated to the Head of Finance & Procurement by the Committee at its meeting in November 2005 of whether a child’s pension could continue when a gap year had been taken.

    The Committee is RECOMMENDED to note the report.

  3. Pension Administration - Move to Shared Services

    4. 12:55 The Head of Finance & Procurement will report orally on the progress of the move of the pension administration team to the Shared Services Centre.

    The Committee is RECOMMENDED to note the report.

  4. Future Programme and Timetable for Investment
    5. Manager Monitoring Arrangements

    (See also Addenda)

    13:00 Report of the Head of Finance & Procurement (PF20) (download as .doc file).

    The report sets out the proposed monitoring arrangements for the 2007/08 Council year.

    The Committee is RECOMMENDED to agree the programme of manager meetings as set out in the report.

  5. Annual Pension Forum

    6. 13:05 The Head of Finance & Procurement will report orally on the arrangements for the Annual Forum to be held on 27 November 2006 at 9.30 am at County Hall.

    The Committee is RECOMMENDED to note the report.

  6. Corporate Governance and Socially Responsible Investment

13:10 The Head of Finance & Procurement has nothing specific to report for this quarter but it should be noted that all the managers have included pages within their valuation reports which provide details on their voting at company AGMs, engagement with companies and their involvement with other socially responsible initiatives.

The Committee is RECOMMENDED to note the report.

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