Meeting documents

Pension Fund Committee
Friday, 15 November 2002

PF151102

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To Members of the Pension Fund Committee

Notice of Meeting

Meeting

PENSION FUND COMMITTEE

Date/Time

Friday 15 November 2002 at 10.00 am

Place

County Hall, Oxford

Contact officer

Julie Dean
(Tel: 01865 815322; E-mail)


Chris Impey
Assistant Chief Executive

6 November 2002

Membership

Chair – Councillor Dickie Dawes

Councillors:

Richard Farrell

Barbara Gatehouse

Brian Law

Roy Mold

Jim Moley

 

Co-opted Members:

Jean Fooks

Mary Neale

 

The agenda follows. Decisions taken at the meeting will become effective at the end of the working day on 25 November 2002 unless called in by that date for review by the appropriate Scrutiny Committee.

AGENDA

  1. Apologies for Absence and Temporary Appointments

  2. Declarations of Interest

  3. Minutes

    4. To approve the minutes of the meeting held on 30 August 2002 (PF3(a)), 7 October 2002 (PF3(b) and 6 November 2002 (PF3(c)) and to receive for information any matters arising therefrom.

  4. Petitions and Public Address

  5. Overview of Past and Current Investment Position

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 30 September 2002 using the following charts:-

Charts 1 to 3 - provide information on portfolio distribution for the Fund Managers, Deutsche Asset Management and Schroders.

Chart 4 - shows net investment/disinvestment during the quarter;

Charts 11 to 12 - provide information on UK equity sector distribution for both the Fund Managers, Deutsche Asset Management and Schroders.

Charts 13 to 14 - show UK equity sector returns for the quarter and year end to 30 September 2002.

(Please note that charts 5-10 are not included with the Committee agenda this time).

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 9E 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 - 9E 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 16 February 2003.

  1. Overview and Outlook for Investment Markets

    2. 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(a)) which is not exempt and (PF6(b)) which is exempt and includes recommendations concerning future private equality investments, will be supported by relevant charts of economic and market trends, where appropriate, which are attached.

    (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 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.

  2. Deutsche Asset Management Ltd

10:30 (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:

        1. 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 ending on 30 September 2002;

        2. report on whether or not voting rights have been exercised, and if so details of the rights exercised;

        3. give their views on the future investment scene; and

        4. in the light of (1) above, recommend any change in their strategy and/or asset allocation;

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

  1. Schroder Investment Management

10:55 (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:

        1. 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 ending on 30 September 2002;

        2. report on whether or not voting rights have been exercised, and if so details of the rights exercised;

        3. give their views on the future investment scene; and

        4. in the light of (1) above, recommend any change in their strategy and/or asset allocation;

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

  1. Summary by the Financial Adviser

    2. 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).)

  2. Oxfordshire County Council Pension Fund Annual Review of the Independent Financial Adviser

    3. 11:15 Report by Director for Business Support & County Treasurer (PF10E).

    The report reviews the activities of the Independent Financial Adviser over the last year. It highlights that the Adviser has spent substantially more time on strategic issues including evaluating private equity opportunities, assessing the suitability of the fund investing in hedge funds, monitoring the active risk within the Fund and the ongoing investment management review; and recommends an appropriate ex-gratia payment in recognition of this.

    The report also proposed that the Independent Financial Adviser be reappointed for a further year and, in recognition of his wish to retire next year, to request the officers to find and recommend a suitable replacement for him on his retirement.

    (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:

          1. reappoint the Independent Financial Adviser for a further twelve months and to upgrade his fee in line with the retail price index to take effect from 1 December 2002;

          2. formally recognise the extra duties the Independent Financial Adviser has carried out over the past twelve months and in the light that this situation is expected to continue over the next twelve month period to pay him an ex gratia sum, to be later determined, in November 2003; and

          3. instruct the officers, with the assistance of the Independent Financial Adviser, to find and recommend a suitable replacement to succeed him on his retirement.

ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC

  1. Oxfordshire County Council Pension Fund – CIPFA Local Authority Pension Fund Investment Statistics

    2. 11:35 Report by Director for Business Support & County Treasurer (PF11).

    The report compares the Oxfordshire Pension Fund’s investment performance with that of other County Councils over 3, 5 and 10 year periods. It will also compare the Oxfordshire Fund’s asset allocation with the median local authority fund.

    The Committee is RECOMMENDED to receive the report.

  2. Performance of Additional Voluntary Contributions (AVC) Provider

    3. 11:45 Report by Director for Business Support & County Treasurer (PF12).

    The report summarises the annual review of AVC provision by Watson Wyatt pension consultations, including the Council’s existing arrangements with Prudential and their investment performance.

    The Committee is RECOMMENDED to:

          1. receive the report; and

          2. ask the officers to take a more fundamental look at AVCs and report to the Committee at the earliest opportunity.

  3. Pension Fund Annual Report and Accounts for 2001/02

    4. 11:55 The Director for Business Support & County Treasurer reports as follows:-

    A draft of the Annual Report and Accounts was approved at the 30 August meeting. The Committee will be now asked to formally adopt the Pension Fund annual report and accounts. (The report has been circulated separately to members and relevant officers.)

    The Committee is RECOMMENDED to approve the Oxfordshire Pension Fund Annual Report & Accounts 2001/2002.

  4. Socially Responsible Investment and Corporate Governance Issues

    5. 12:05 The Director for Business Support & County Treasurer will report orally on issues arising from officers and Fund Managers on their involvement in matters of Socially Responsible Investment and Corporate Governance. It will refer to the creation of a new corporate responsibility index for the UK’s leading companies, which the National Association of Pension Funds hopes to use in its voting issues service.

    The Committee is RECOMMENDED to note the report.

  5. Renewal of Admission Agreements

    6. 12:15 Report by Director for Business Support & County Treasurer (PF15).

    The Local Government Pension Scheme Regulations (LGPS) enable other employers to join the Pension Fund. Until recently, application to join was restricted to employers providing a not for profit public service, or whose funding came directly from a public body. Oxfordshire Pension Fund has many contributing employers who have joined using this route, entering into an Admission Agreement with the County. Some agreements date back to 1974. Over time, the work of these bodies may change or a management committee will decide that a change of name is necessary to better reflect the modern aims of the service.

    We have recently been advised of the change of name of two such bodies: The Elmore Committee to Elmore Community Services; and Witney and District Citizens Advice Bureau to West Oxfordshire & Distirct Citizens Advice Bureau. The Committee’s approval is necessary to prepare the legal agreements.

    The Committee is RECOMMENDED to approve the renewal of the admission agreements to be effective from the date of change of name for:

          1. Elmore Committee to Elmore Community Services; and

          2. Witney and District Citizens Advice Bureau to West Oxfordshire and District Citizens Advice Bureau.

  6. Consultation on the ‘Stock Take’ of the Local Government Pension Scheme

12:30 Report by Director for Business Support & County Treasurer (PF16).

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 in this exercise. A discussion paper has been issued following fact-finding exercises and this had been lodged in the Members Resource Centre. This paper states that current arrangements for existing staff will not be affected but that it is time for the debate for future arrangements to be started.

This report summarises the discussion paper. Views of interested parties are sought no later than 14 February 2003.

Questions referring to this consultation may be presented at the Pension Forum.

The Committee is asked to consider what response, if any, they wish to make to the ODPM’s discussion paper.

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