Meeting documents
Pension Fund Committee
Friday, 26 November 2004
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To Members of the Pension Fund Committee Notice of Meeting
MembershipChairman – Councillor C H Shouler Councillors:
Co-opted Members:
AGENDA
To approve the minutes of the meeting held on 27 August 2004 (PF3) and to receive for information any matters arising from them.
10:05 The Pension Fund's independent global custodian, ABN Amro Mellon, is the Fund's prime record keeper and from this quarter it has been decided that tables 1 to 7 will be compiled from the custodian's data. This will mean that there are minor differences between the tabled figures and those supplied by the managers. Any differences are primarily due to the custodian accruing for income within his figures but there may also be minor differences in market values due to the use of different pricing sources or applying a different pricing basis. Where the custodian has accrued for dividend then this is reflected within the cash figures. 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 2004 using the following tables: (OCC Pension Fund - Overall valuation of Fund at 30 September 2004 - download as .xls file) (Table 5 - OCC Pension Fund - Total Portfolio Progress Report - Period 1 July to 30 September 2004 - 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 7E, 8E and 9E on the agenda. EXEMPT ITEMS The 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 and 9E, there are no reports circulated with the Agenda. Any exempt information will be reported orally. The 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 as strictly private to members and officers entitled to receive them until after 26 February 2005.
10:15 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. (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 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.
10:25 (1) The Independent Financial Adviser will report orally on the performance and strategy of UBS Global Asset Management drawing on the tables at items 5 and 6E. (2) The representatives (Mr K Barker 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 ended 30 September 2004; (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 valuation report for the period to 30 September 2004. 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. 10:50 (1) The Independent Financial Adviser will report orally on the performance and strategy of Alliance Bernstein drawing on the tables at 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 ended 30 September 2004; (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 valuation report for the period to 30 September 2004. 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.
11:15 The Independent Financial Adviser will report on the main issues arising from the quarterly valuation reports from Baillie Gifford and Legal & General for the quarter ended 30 September 2004. (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 note the main issues arising from the quarterly valuation reports and to take any necessary action, if required.
11:20 The Independent 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 the Head of Finance & Procurement (PF11E). The report reviews the activities of the Independent Financial Adviser over the twelve-month period ending 30 November 2004. The Adviser is responsible for managing the Pension Fund's private equity investments and it is recommended that this arrangement is reviewed during 2005/06. The Adviser has indicated that he is willing to continue for at least the next twelve months if the Committee wishes to reappoint him. The report also sets out an advisory contingency arrangement, agreed with Hewitt Bacon and Woodrow, to cover the quarterly investment committee meetings in the event of the Adviser being unable to attend due to unforeseen circumstances. (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:
11:35 Report by the Head of Finance & Procurement (PF12E). The Oxfordshire Pension Fund currently uses Russell Mellon as its investment performance measurement service provider. The report recommends that the Oxfordshire Pension Fund should change to the WM Company, on the grounds that its service is cheaper and it is now the major service provider for local authority pension funds. (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 request the officers to transfer the Pension Fund’s investment performance measurement service from Russell Mellon to the WM Company, with effect from 1 April 2005. ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC
11:40 Report by the Head of Finance & Procurement (PF13). The report compares the Oxfordshire Pension Fund's asset distribution with that of other local authority pension funds. It also compares the Fund's 3-, 5- and 10-year investment performance with those of other English County Councils. The Committee is RECOMMENDED to receive the report.
11:50 Report by the Head of Finance & Procurement (PF14). The report highlights the key issues raised in the Green Paper, the Government's timetable for taking the matter forward, and the arrangements for developing an Oxfordshire response to the Green Paper. The Committee is RECOMMENDED to note the content of the report, to endorse it as the basis of approach to all Fund employers to stimulate discussion and debate on the consultation document (with any further information that they would wish to see presented), and to endorse the next steps set out in paragraphs 19-22 of the report.
12:05 The Head of Finance & Procurement will report orally.
12:10 Report by the Head of Finance & Procurement (PF16). An audit of the Pension Fund's UK company proxy voting was carried out for the quarter ended 30 June 2004. The Custodian is responsible for exercising the Fund's proxy votes, acting on the fund managers' instructions who in turn are instructed to comply with RREV voting guidelines. The audit uncovered a number of instances where the proxy votes had not been exercised in accordance with the RREV voting guidelines. Most of the errors were attributable to the managers or their agents issuing the wrong voting instructions. The report recommends that a similar audit exercise is carried out again over the next twelve months. The Committee is RECOMMENDED to note the report and to instruct the officers to carry out a similar exercise over the next twelve months.
12:20 Report
by the Head of Finance & Procurement and the Independent Financial
Adviser (PF17) The report briefly reviews the Pension Fund's existing private equity arrangements, which is to invest in quoted private equity investment trusts. It recommends that this policy should be supplemented by investing in closed end funds so that the Fund can achieve a 4% weighting in this alternative asset class and also have a larger exposure to overseas companies. The Committee is RECOMMENDED to invest US$10 million (approximately £5.6 million) of funds in Adam Street Partners Global private equity fund when it opens for new subscriptions at the beginning of 2005.
12:30 Report by the Head of Finance & Procurement (PF18). The report sets out the timetable for Pension Fund Committee meetings and officer meetings with the managers up until February 2006. The Committee is RECOMMENDED to agree the programme for meetings of the Pension Fund Committee and of officer meetings with the investment managers for the remainder of this Council year and for the 2005/06 Council year.
12:40 Report by the Head of Finance & Procurement (PF19). The report details proposed changes to the Local Government Pension Scheme (Management and Investment of Funds) Regulations 1998. The Committee is RECOMMENDED to note the contents of the report, and to ask the Head of Finance & Procurement to respond to the Office of the Deputy Prime Minister along the lines contained within the body of the report.
12:45 Report by the Head of Finance & Procurement (PF20). The report provides further information for the Committee to consider its discretions under the Transitional Regulation. The Committee is ASKED to:
(b) if the Committee decides not to extend the 6-month period, to determine the two individual cases.
12:50 Report by the Head of Finance & Procurement (PF21). The report reviews the policy on medical requirements for the purchase of added years due to changes in disability discrimination legislation. The Committee is ASKED to decide whether the Council will accept elections to buy additional membership without seeking an individual medical report.
12:55 Report by the Head of Finance & Procurement (PF22). A draft of the Annual Report and Accounts was approved at the 27 August meeting. This report summarises the main points contained within an Audit Commission's report on the 2003/04 Pension Fund Accounts. It reports on the inclusion in the accounts of two post balance sheet events. The Committee is RECOMMENDED to:
13:00 The Head of Finance & Procurement reports on recent admissions to the Pension Fund as follows: The agreement with the West Oxfordshire Housing Association has been updated following the change of name to COTTSWAY HOUSING ASSOCIATION on Monday 18 October 2004. The Committee is RECOMMENDED to note the report.
13:05 The
Head of Finance & Procurement will report orally on any issues
arising from the last Annual Forum or relevant to the next Forum due
to be held on 30 November 2004 at 10.00 am.
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