To Members of the Pension Fund Committee
Notice of a Meeting of thePension Fund Committee
Friday 14 September 2007 at 10.15 am*
County Hall, Oxford
Tony Cloke
Contact officer: Marion Holyman Tel: 01865 810177; E-Mail: marion.holyman@oxfordshire.gov.uk
* PLEASE NOTE REVISED START TIME Membership
Chairman – Councillor David Harvey Deputy Chairman – Councillor Ray Jelf
Councillors:
Co-opted Members:
Notes: · A lunch will be provided · Date of next meeting: 13 December 2007
AGENDA
1. Apologies for Absence and Temporary Appointments
2. Declarations of Interest – see guidance note
3. Minutes
To approve the minutes of the meeting held on 25 May 2007 (PF3) and to receive for information any matters arising on them.
4. Petitions and Public Address
5. Overview of Past and Current Investment Position 10:20 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 June 2007 using the following tables:
Table 1 - provides a consolidated valuation of the Pension Fund at 30 June 2007; 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 June 2007.
(Tables - download as .xls file)
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 8E, 9E and 10E 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 6E, 8E, 9E and 10E there are no reports circulated with the Agenda. Any exempt information will be reported orally.
6.E WM Company Presentation on the Pension Fund’s Investment Performance for the Twelve Months ended 31 March 2007 10:35 The WM Company will review the Oxfordshire Pension Fund’s investment performance for the twelve months ended 31 March 2007. The presentation will compare Oxfordshire’s performance against its own customised benchmark and against the WM Local Authority Pension Fund Universe. The presentation will also explore a number of other issues including the impact of currency on investments and local authority pension funds continuing to invest in equities.
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 to consider any further action arising on it.
7.E Overview and Outlook for Investment Markets 11:20 Report of the Independent Financial Adviser (PF7E) (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.
8.E Report of Main Issues arising from Reports of the Fund Managers not represented at this meeting11:30 The Independent Financial Adviser will report orally on the main issues arising from the reports from 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.
9.E UBS Global Asset Management 11:35 (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 7E. (2) The representatives (Mr P Harris and Mr M Stemp) 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 2007; (b) give their views on the future investment scene.
In support of the above is their report for the period to 30 June 2007.
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.
10.E Alliance Bernstein 12:00 (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 7E. (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 June 2007; (b) give their views on the future investment scene. In support of the above is their report for the period to 30 June 2007.
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. 11.E Summary by the Independent Financial Adviser 12:25 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.
12.E Private Equity 12:30 Report of the Independent Financial Adviser (PF12E)
The Report briefly summarises the investments made to date in private equity fund of funds limited partnerships.
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.
ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC
13. Stock Lending 12:45 Report of the Head of Finance & Procurement (PF13)
The report reviews the Pension Fund's stock lending programme, which was put in place in April 2004. The risk control processes remain broadly the same as in 2004. The fee income generated for the Pension Fund has increased significantly and is forecast to exceed £100,000 in 2007/08. The Custodian has also agreed that the share of lending revenue received by the Pension Fund will be increased from 60% to 70% from 1 September, which will further enhance the total revenue received.
The Committee is RECOMMENDED to note the contents of this paper.
14. Draft Annual Report and Accounts for 2006/07 12:50 Report of the Head of Finance & Procurement (PF14) (download as .pdf file)
The draft Annual Report and Accounts for 2006/07 show the final accounts for the Pension Fund for the year ended 31 March 2007 and provide details on how the Fund operates, including sections on membership and investments. The Report also includes the Statement of Investment Principles, which has been updated in the light of minor changes that have taken place during the year.
The Committee is RECOMMENDED to receive the draft report and accounts for 2006/07 and to agree the Statement of Investment Principles.
15. Pension Fund Investment and Administration Expenses Outturn Report for the year ended 31 March 2007 12:55 Report of the Head of Finance & Procurement (PF15)
The report compares actual with budgeted costs for both Investment and Administration expenses for the year ended 31 March 2007. Reasons for the larger variations are explained in the report.
The Committee is RECOMMENDED to receive the report and to note the out-turn position.
16. The New Look Local Government Pension Scheme 13:00 Report of the Head of Finance & Procurement (PF16)
This report updates the Pension Committee on the latest position with regard to the Government's proposals to implement a New Look Local Government Pension Scheme with effect from 1 April 2008. The report highlights those aspects of the new scheme covered in Regulations already laid before Parliament, and those currently still going through a consultation process. The Committee is invited to note the position and the concerns regarding how much still needs to be achieved if the new look scheme is to be successfully implemented with effect from 1 April 2008. In respect of the latest consultation on further extensions to the transitional protection arrangements, following the removal of the 85 year rule from the regulations, the Committee is invited to endorse a response which argues strongly against the proposed further extension.
The Committee is RECOMMENDED to note the latest position on the implementation of the New Look 2007 Scheme, and to:
(a) approve the increase in establishment by one pensions administrator, and the appropriate increase in budget provision, in order to provide greater capacity in dealing with the significant workload arising from the scheme changes; and (b) approve the letter at Annex 1, with any amendments, as this Committee’s formal submission to the latest consultation on extending the transitional protections following the removal of the 85 year rule from the scheme.
17. Amendment (No 3) Regulations 13:05 Report of the Head of Finance & Procurement (PF17)
The report considers the introduction of a pension administration strategy and reviews the current communication policy.
The Committee is RECOMMENDED to:
(a) endorse the review and continuation of the current communication policy; (b) endorse the introduction of the administration strategy.
18. Admission Agreements 13:10 Report of the Head of Finance & Procurement (PF18)
To update members on admission agreements.
The Committee is RECOMMENDED to note the report.
19. Annual Pension Forum 13:15 The Head of Finance & Procurement will report orally on any issues arising from the last Pension Forum held in November 2006 and on the date for the 2007 Forum.
The Committee is RECOMMENDED to note the report and to agree the date for the next Forum.
20. Corporate Governance and Socially Responsible Investment 13:20 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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