Meeting documents

Pension Fund Committee
Friday, 25 August 2006

PF250806

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To Members of the Pension Fund Committee

Notice of Meeting

Meeting

PENSION FUND COMMITTEE

Date/Time

25 August 2006 at 10.15 am*

Place

County Hall, Oxford

Contact officer

Marion Holyman
(Tel: 01865 810177; E-mail)

* PLEASE NOTE START TIME


Derek Bishop
Head of Democratic Services

17 August 2006

Membership

Chairman - Councillor Rodney Rose

Deputy Chairman - David Harvey

Councillors:

Bill Bradshaw

Neville Harris

Jim Moley

Bill Service

David Wilmshurst

 

Co-opted Members:

Michael Howes

Bob Price

 

 

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

  1. Apologies for Absence and Temporary Appointments

  2. Declarations of Interest – see guidance note

    3. Councillors Bradshaw, Harvey, Moley, Rose and Service are members of the Pension Fund Scheme under the provisions of Section 18 of the Local Government and Housing Act 1989.

  3. Minutes

    4. To approve the minutes of the meeting held on 26 May 2006 (PF3) and to receive for information any matters arising from them.

  4. Petitions and Public Address

  5. Overview of Past and Current Investment Position

10:20

(PF5 - Tables - download as .xls file)

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 2006 using the following tables:

Table 1 - provides a consolidated valuation of the Pension Fund at 30 June 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 June 2006.

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 and 11E 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 8E, 9E and 10E 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 8E, 9E and 10E, AND ANY INFORMATION TO BE REPORTED ORALLY, HAVE NOT BEEN MADE PUBLIC AND SHOULD BE REGARDED UNTIL AFTER 25 NOVEMBER 2006 AS STRICTLY PRIVATE TO MEMBERS AND OFFICERS ENTITLED TO RECEIVE SUCH REPORTS AND INFORMATION.

6.E WM Company Presentation on the Pension Fund's Investment Performance for the Twelve Months ended 31 March 2006

10:45 The WM Company will review the Oxfordshire Pension Fund's investment performance for the twelve months ended 31 March 2006. The presentation will not only compare Oxfordshire's performance against its own customised benchmark but will also compare it 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

11:30 Report of the Independent Financial Adviser (PF7E) (download as .pdf 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 meeting

11:40 The Independent Financial Adviser will report orally on the main issues arising from the reports from Alliance Bernstein 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

11:45 (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.

(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 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 June 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.

10.E Baillie Gifford

12:15

(1) The Independent Financial Adviser will report orally on the performance and strategy of Baillie Gifford drawing on the tables at Agenda Items 5 and 7E.

(2) The representatives (Mr I McCombie and Mr L Robb) 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 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 June 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.

11.E Summary by the Independent Financial Adviser

12:45 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.

ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC

  1. Increase in the Use of Property Specialist Funds

    2. 12:50 Report of the Head of Finance & Procurement and the Independent Financial Adviser (PF12)

    The report advises the Committee that during the quarter the Chief Executive approved under her delegated powers that UBS could be permitted to increase the maximum that might be invested in property specialist funds from 25% to 35% of the total value of the property portfolio. The report explains why UBS made this request and why they wanted to implement it at the earliest opportunity.

    The Committee is RECOMMENDED to note the action taken by the Chief Executive to approve that the maximum percentage of the property portfolio that may be held in specialist funds be increased from 25% to 35%.

    LUNCH

  2. Consultation on Proposed Changes to the Local Government Pension Scheme - (Amendment) (No 2) Regulations 2006

    3. 14:00 Report of the Head of Finance & Procurement (PF13)

    The report summarises the changes proposed in this consultation document and details the response that has been made, on behalf of the Committee, by the Head of Finance & Procurement, under the delegated authority approved by the Committee at its last meeting.

    The Committee is RECOMMENDED to note the report.

  3. 'New Look' 2008 Local Government Pension Scheme (LGPS)

    4. 14:05 Report of the Director for Resources (PF14)

    The Department for Communities and Local Government (DCLG) has set out, for consultation, four options for a new look LGPS to be implemented from 1 April 2008. This report considers each of the four options together with a range of related issues and recommends the key points to be included in the response of this Committee, acting as Administering Authority to the Oxfordshire Pension Fund.

    The Committee is RECOMMENDED to consider the report and to authorise the Director for Resources to send a response to the DCLG by 29 September 2006 which incorporates the views of the Committee on the issues raised in this report as articulated in their discussion of this agenda item, subject to the Director for Resources consulting with the Chairman, Deputy Chairman and Opposition Group Spokesman in finalising this response.

  4. Draft Annual Report and Accounts for 2005/06

    5. 14:25 Report of the Head of Finance & Procurement (PF15) (download as .doc file)

    The Draft Annual Report and Accounts for 2005/06 show the final accounts for the Pension Fund for the year ended 31 March 2006 and provide details on how the Fund operates, including sections on membership and investments. They also incorporate the Statement of Investment Principles, which has been updated in the light of changes that have taken place during the year.

    The Committee is RECOMMENDED to receive the draft report and accounts for 2005/06 and to agree the Statement of Investment Principles.

  5. Pension Fund Investment and Administration Expenses Outturn Report for the year ended 31 March 2006

    6. 14:35 Report of the Head of Finance & Procurement (PF16)

    The report compares actual with budgeted costs for both Investment and Administration expenses for the year ended 31 March 2006. 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.

  6. Best Value Review of Oxfordshire Pension Fund Administration – Implementation

    7. 14:45 Report of the Head of Finance & Procurement (PF17)

    The report outlines the focus of the Review and the current status of the key areas identified for service improvement. It concludes that overall the majority of the actions arising from the Review have been completed. The Corporate Governance Scrutiny Committee considered the report on 27 July 2006 and its comments are as follows:

    (a) to note the overall completion of the actions and sign off the Review;

    (b) to thank and congratulate the staff and members concerned;

    (c) to forward the report to the Pension Fund Committee.

    The Committee is RECOMMENDED to consider whether there are any issues it wishes to raise on the report.

  7. Motion from Oxford City Council Oxfordshire Pension Fund: Investment for Social Good

    8. 14:55 The Committee is advised that the Oxford City Council has adopted a motion on investment of the pension fund for social good and seeking three member nominated representatives with full voting rights on the Committee. To allow officers sufficient time to consider the issues raised in the motion and make recommendations to the Committee, the motion and report will be submitted to the November meeting of the Committee for consideration.

    The Committee is RECOMMENDED to note the position.

  8. Local Government Pension Scheme Regulations Application for Admission as a Transferee Admission Body

    9. 15: 00 Report of the Head of Finance & Procurement (PF19)

    The report seeks retrospective approval for the admission of SOLL VALE to the Oxfordshire Pension Fund.

    The Committee is RECOMMENDED to approve the retrospective application of SOLL Vale subject to its agreeing to the terms of the Admission Agreement and this Committee being informed when the agreement is signed.

  9. Group Action Claim for Recovery of Overseas Tax

    10. 15:05 Report of the Head of Finance & Procurement (PF20)

    The report confirms the outcome of the quantification work undertaken by KPMG, the subsequent decision to join the Group Litigation Order and the authorisation to incur the costs associated with this decision.

    The Committee is RECOMMENDED to note the report.

  10. Annual Pension Forum

    11. 15:10 The Head of Finance & Procurement will report orally on any issues arising from the last Annual Forum and on the next Forum to be held on 24 November 2006 at 2.30 pm.

    The Committee is RECOMMENDED to note the report.

  11. Corporate Governance and Socially Responsible Investment

15:15 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.

Note: The Committee is advised that Mr Sean Gibson will replace Mr Malcolm Leeding as the Beneficiaries’ Observer.

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