Return to AgendaITEM PF3
PENSION FUND committee
MINUTES of the meeting held on 25 May 2007 commencing at 10.15 am and finishing at 12.45 pm
Present:
Voting Members: Councillor David Harvey - in the chair
Councillor Tony Crabbe Councillor Neville F Harris Councillor Ray Jelf Councillor Jim Moley Councillor Dermot Roaf (in place of Councillor Bill Bradshaw)Councillor Bill Service
District Council Michael Howes Representatives: Bob Price
Officers:
Whole of meeting: Mr S Collins (Shared Services), Ms J Hydari, Mr T Wheeler and Ms M Holyman (Corporate Core)
By Invitation: Mr A Bushell (Independent Financial Adviser) Mr P Harris (UBS Global Asset Management) Mr M Stemp (UBS Global Asset Management) Mr R Barnard-Smith (Legal & General) Mr J Cloke (Legal & General) Ms C Goodheart (Legal & General)
The Committee considered the matters, reports and recommendations contained or referred to in the agenda for the meeting, together with a table showing the investment performance of UBS since March 1992 and decided as set out below. Except insofar as otherwise specified, the reasons for the decisions are contained in the agenda, reports and additional document, copies of which are attached to the signed Minutes.
20/07 ELECTION OF CHAIRMAN FOR THE 2007/08 COUNCIL YEAR
RESOLVED: that Councillor David Harvey be elected to chair the Committee for the 2007/08 Council Year.
21/07 ELECTION OF DEPUTY CHAIRMAN FOR THE 2007/08 COUNCIL YEAR
RESOLVED: that Councillor Jelf be elected as Deputy Chairman for the 2007/08 Council Year.
22/07 APOLOGIES FOR ABSENCE AND TEMPORARY APPOINTMENTS
Apologies for absence and temporary appointments were received as follows:
23/07 DECLARATIONS OF INTEREST
Councillors Harvey, Moley, Price (Co-opted Member) and Service declared personal interests as members of the Pension Fund Scheme under the provisions of Section 18 of the Local Government and Housing Act 1989. Councillor Moley declared a personal interest in agenda item 16(b) (Vale – Capita) as a member of the Vale of White Horse District Council.
24/07 MINUTES
The Minutes of the meeting of the Committee held on 23 February 2007 were approved and signed.
RESOLVED: to thank Councillor Rose, the former Chairman of the Committee, for his contribution to the work of the Committee.
25/07 OVERVIEW OF PAST AND CURRENT INVESTMENT POSITION (Agenda Item 5)
The Committee was advised that Tables 1 to 7 had been compiled from the custodian's records (the Pension Fund's prime record keeper). In his records, he accrued for dividends and recoverable overseas tax within his valuation figures and might also have used different exchange rates and pricing sources compared with the fund managers. In addition, the Committee was advised that the custodian had treated dividend scrip issues as purchases which the fund managers might not have done. This might mean that there were minor differences between the tabled figures and those supplied by the managers.
The Independent Financial Adviser reviewed the investment activity during the past quarter and presented an overview of the Fund’s position as at 31 March 2007.
On Table 1, he reported that the value of the Fund had risen by 2.4%.
On Table 2 (UBS), he highlighted that UK and overseas equities were in line with the benchmark, bonds were slightly below the benchmark, property was below the benchmark and cash held was 2.3%.
On Table 3, (Alliance Bernstein), he reported that UK equities were above the benchmark, and overseas equities were below the benchmark overall but within this class, North American equities were underweight and Emerging Markets were overweight.
On Table 4, he reported that Legal & General was overweight in UK gilts and underweight in corporate bonds and index linked gilts. Both Legal & General and Baillie Gifford were virtually fully invested.
On Table 5, he reported that there had been net purchases of UK equities and bonds, net sales of overseas equities and cash held had increased over the previous quarter. The market value of the UK equities, overseas equities and alternative investments had risen but the value of the bonds and the TAA fund had fallen. He also reported that there were the following errors on Table 5 for Asset (Private Equity):
Purchases and Sales (Other) “71” should read “(429)” Changes in Market Value (Other) “2687” should read “3187”.
On Table 6, he pointed out that the market value of private equity had risen by 7%.
On Table 7, he reported that there had been purchases of F & C Private Equity Trust ‘B’ Order GBP0.01 and SVG Capital, sales of Standard Life European Private Equity Trust and the Schroder Private Equity – Share buy back had been realised. He also reported that there was an error on Table 7 where for Standard Life European Private Equity Trust (25/01/07) the “Sale Proceeds” should read “1,092,809” and “Realised Gain/Loss” should read “592,809”.
On Table 8, he reported that, for the last quarter and the last twelve-month period, the total fund had overall underperformed the benchmark but for the last three-year period, the total fund had outperformed the benchmark. In response to a question from members, he reported that the TAA fund had underperformed its benchmark for the twelve-month period.
On Table 9, (UBS) he reported that for the 3 periods shown in the table, the total fund had underperformed the benchmark.
On Table 10 (Alliance Bernstein), he highlighted that this was the first quarter that Alliance Bernstein had underperformed the benchmark, the main reason being the underperformance of overseas equities, in particular North American and European equities. For the twelve-month period and three year period, it had significantly outperformed the benchmark. Baillie Gifford had outperformed the benchmark for this quarter but underperformed the benchmarks for the twelve-month and three-year periods. Legal & General had been in line with the benchmarks for the three periods.
RESOLVED: to receive the tables, and that the information contained in them be borne in mind, insofar as they relate to items 9E, 10E and 11E on the agenda.
26/07 EXEMPT ITEMS
RESOLVED: that the public be excluded for the duration of items 8E- 12E in the Agenda since it was 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 was considered that, in all the circumstances of each case, the public interest in maintaining the exemption outweighed the public interest in disclosing the information.
27/07 OVERVIEW AND OUTLOOK FOR INVESTMENT MARKETS (Agenda Item 8E)
The Committee considered a report (PF8E) which set out an overview of the current and future investment scene and market developments across various regions and sectors. The Independent Financial Adviser responded to questions from members.
RESOLVED: to receive the Independent Financial Adviser’s oral and written reports and to bear his conclusions in mind when considering the Fund Managers’ reports.
28/07 REPORT OF MAIN ISSUES ARISING FROM REPORTS OF THE FUND MANAGERS NOT REPRESENTED AT THIS MEETING (Agenda Item 9E)
The Independent Financial Adviser reported on the main issues arising from the reports from Alliance Bernstein and Baillie Gifford in conjunction with information contained in the tables (Agenda Item 7). He reiterated the points on their respective performances he had highlighted on Item 7.
RESOLVED: to note the main issues arising from the reports.
29/07 UBS GLOBAL ASSET MANAGEMENT (Agenda Item 10E)
The representatives (Mr P Harris and Mr M Stemp) of the Fund Manager reported and reviewed 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 31 March 2007. The Independent Financial Adviser highlighted the performance of the company over the last 15 years. The representatives discussed the underperformance of the TAA Fund. They said that the company’s investment strategy operated better in some environments than others but, in response to questions from members, they confirmed that they would be continuing with their investment strategy since it had served the company well in the past. They said that they had misjudged how mining stocks would perform. They hoped that performance would improve over the next twelve months.
RESOLVED: to receive the UBS Global Asset Management’s quarterly valuation and presentation reports for the quarter ending on 31 March 2007.
30/07 LEGAL & GENERAL (Agenda Item 11E)
The representatives (Mr R Barnard-Smith, Mr J Cloke and Ms C Goodheart) of the Fund Manager reported and reviewed 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 31 March 2007. They responded to members’ questions.
RESOLVED: to receive the UBS Global Asset Management’s quarterly valuation and presentation reports for the quarter ending on 31 March 2007.
31/07 SUMMARY BY THE INDEPENDENT FINANCIAL ADVISER (Agenda Item 12E)
The Independent Financial Adviser said that he had nothing to add to previous comments.
RESOLVED: to note the position.
ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC
32/07 THE LOCAL GOVERNMENT (EARLY TERMINATION OF EMPLOYMENT) (DISCRETIONARY COMPENSATION) (ENGLAND AND WALES) REGULATIONS 2006 SI 2914 (Agenda Item 13)
The Committee considered a report (PF13) which updated it on the regulations.
RESOLVED to:
(a) note the report; and
(b) support the single payment option referred to in paragraph 10 of the report.
33/07 THE LOCAL GOVERNMENT PENSION SCHEME (BENEFITS, MEMBERSHIP AND CONTRIBUTIONS) REGULATIONS 2007 (Agenda Item 14)
The Committee considered a report (PF14) which set out the provisions of recently issued Benefit, Membership and Contribution Regulations and updated it on the proposals in the draft administration regulations.
RESOLVED: to note the report.
34/07 THE LOCAL GOVERNMENT PENSION SCHEME – COMMUNICATION POLICY (Agenda Item 15)
The Committee considered a report (PF15) which reviewed the current policy.
RESOLVED: to note the report.
35/07 ADMISSION AGREEMENTS (Agenda Item 16)
(a) Oxfordshire Community Development Agency
The Committee was advised that this small admitted body had gone into administration at the end of 2006. Since being advised of this, there had been discussions with the administrators to get the up-to-date pay and employment information for individual scheme members. This information had now been received and the data was being processed so that a closure valuation could be undertaken.
(b) Vale / Capita
The Committee was advised that the admission agreement had now been signed and finalised.
RESOLVED: to note the reports on the Oxfordshire Community Development Agency and Vale/Capita and to ask the Head of Finance & Procurement to report on difficulties, if any, being experienced with organisations.
(Councillor Moley declared a personal interest on (b) as he was a member of the Vale of White Horse District Council.)
36/07 ANNUAL PENSION FORUM (Agenda Item 17)
The Head of Finance & Procurement advised the Committee that a possible date for the next Forum was 4 December 2007.
RESOLVED: to agree that the next Forum would be held on 4 December 2007.
37/07 CORPORATE GOVERNANCE AND SOCIALLY RESPONSIBLE INVESTMENT (Agenda Item 18)
The Head of Finance & Procurement reported that she had nothing specific to report for this quarter but that it should be noted that all the managers had included pages within their valuation reports which provided details on their voting at company AGMs, engagement with companies and their involvement with other socially responsible initiatives.
RESOLVED: to note the report.
38/07 DATES OF FUTURE MEETINGS
RESOLVED: to agree that the dates of the remaining meetings in the year be changed to the following dates:
14 September 2007 ) 13 December 2007 ) all at 10 am. 21 February 2008 )
................................................................................... in the Chair
Date of signing.................................................................. 2007
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