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ITEM PF3
PENSION fund committee
MINUTES of the meeting held on 25 February 2009 commencing at 10.00 am and finishing at 2.40 pm
Present:
Voting Members: Councillor David Harvey - in the chair
Councillor Alan BrydenCouncillor Neville Harris Councillor Ray Jelf Councillor Dermot Roof Councillor Don Seale Councillor Bill Service
District Council Councillor Richard Langridge (co-opted member) Representatives:
By Invitation: Mr. A. Bushel (Independent Financial Adviser) Mr. P. Davies (Independent Financial Adviser) Mr. L. Robb (Baillie Gifford) Mr. I McCombie (Baillie Gifford) Mr. J. Cloke (Legal & General) Mr. M. Walsh (Legal & General) Mrs. B Churchill (Beneficiaries’ Observer)
Officers:
Whole of meeting: Ms S. Scane (Assistant Chief Executive & Chief Finance Officer); Mr S Collins and Mrs S Fox (Shared Services); Mrs S. Whitehead (Corporate Core); Mr T Wheeler (consultant)
Part of meeting:
The Committee considered the matters, reports and recommendations contained or referred to in the agenda for the meeting, together with a schedule of addenda tabled at the meeting, and decided as set out below. Except insofar as otherwise specified, the reasons for the decisions are contained in the agenda, reports and schedule copies of which are attached to the signed Minutes.
1/09 INDEPENDENT FINANCIAL ADVISER
The Committee noted that it was Tony Bushel’s last meeting and the Chairman made a presentation to him as a gesture of appreciation for all he had done, noting that the Committee had received the best possible advice from him.
The Committee also welcomed Peter Davies who was taking on the role of Independent Financial Adviser.
2/09 APOLOGIES FOR ABSENCE AND TEMPORARY APPOINTMENTS
An apology for absence was received from Councillor Bob Price (co-opted member).
3/09 DECLARATIONS OF INTEREST
Councillors Harvey, Landridge (co-opted member) and Service and Mrs Churchill 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 Bryden declared a personal interest on Item 13 as a current policy holder with Prudential.
4/09 MINUTES
The Minutes of the meeting of the Committee held on 26 November 2008 were approved and signed, subject to the following amendments:
Minute 77/08 – The word ‘realise’ in the preamble to the minute to be replaced with ‘recover’.
Minute 78/08 – The word ‘property’ to be inserted before the word ‘market’ in the final sentence of the preamble.
5/09 OVERVIEW OF PAST AND CURRENT INVESTMENT POSITION (Agenda Item 5)
The Committee received the addenda that were tabled replacing Tables 11 – 16 with tables 11-13 providing investment performance for the consolidated Pension Fund and for the four Fund Managers for the quarter ended 31 December 2008. The Committee was advised that Tables 1 to 13 were compiled from the custodian's records. The custodian was the Pension Fund's prime record keeper. 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. The custodian also treated dividend scrip issues as purchases which the fund managers might not do. This might mean that there were minor differences between the tabled figures and those supplied by the managers.
Tony Bushel, the Independent Financial Adviser for the period reviewed the investment activity during the past quarter and presented an overview of the Fund’s position as at 31 December 2008. Responding to a query from Councillor Harris, the Assistant Chief Executive & Chief Finance Officer reported that the value of the fund as at 20 February 2009 was approximately £790m. It was noted that the tables provided referred to the quarterly position.
RESOLVED: 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.
6/09 OVERVIEW AND OUTLOOK FOR INVESTMENT MARKETS (Agenda Item 6E)
The Committee considered a report (PF6E) which set out an overview of the current and future investment scene and market developments across various regions and sectors. The Independent Financial Adviser updated the Committee orally and responded to members’ questions.
RESOLVED: 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.
7/09 BAILLIE GIFFORD (Agenda Item 7E)
The representatives (Mr L Robb and Mr I. McCombie) 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 December 2008.
The Committee Services Manager apologised that background information for this item had not been circulated to Members.
The Fund manager representatives responded to members’ questions and in particular Mr McCombie responded to queries about the nature of the Fund manager’s workforce. He also referred to the response of the company to the current economic downturn and explained their position in relation to cash balances.
RESOLVED: to note the main issues arising from the presentation.
8/09 LEGAL & GENERAL (Agenda Item 8E)
The representatives (Mr J. Cloke and Mr M. Walsh) 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 December 2008. They responded to members’ questions.
RESOLVED: to note the main issues arising from the presentation and to take any necessary action, if required.
9/09 REPORT OF MAIN ISSUES ARISING FROM REPORTS OF THE FUND MANAGERS NOT REPRESENTED AT THIS MEETING (Agenda Item 9E)
The Independent Financial Adviser reported orally on the main issues arising from the reports from Alliance Bernstein and UBS in conjunction with information contained in the tables (Agenda Item 5).
RESOLVED: to note the main issues arising from the reports and to take any necessary action, if required.
10/09 SUMMARY BY THE INDEPENDENT FINANCIAL ADVISER (Agenda Item 10E)
The Independent Financial Adviser stated that he had nothing to add to his comments made earlier in the meeting.
11/09 PRIVATE EQUITY, ASSET ALLOCATION, CASH HOLDINGS AND HEDGE FUNDS (Agenda Item 11E)
The Committee considered a report (PF11E) which considered the allocation to Private Equity and Hedge Funds and the impact on asset allocation.
RESOLVED:
(a) To defer the decision to adjust the strategic allocation of assets to accommodate an increase in the Private Equity benchmark holding until the annual review of the Fund’s Strategic Asset Allocation in August 2009;
(b) To note the high cash holding, which has been deliberate in falling markets;
(c) To note that cash held by UBS has been invested in their UK Cash Fund to avoid double fees; and
(d) To defer consideration of the Fund’s strategy on hedge funds until the annual review of the Fund’s Strategic Asset Allocation in August, noting that consideration may be further delayed until November.
(e) That a report be submitted to the August meeting to consider the management of cash held at County Hall.
12/09 APPOINTMENT OF THE INDEPENDENT FINANCIAL ADVISER (Agenda Item 12E
The Committee considered a report (PF12E) which set out the outcome from the appointment process.
RESOLVED: to:
(a) note the appointment of Peter Davies as the new Independent Financial Adviser to the Pension Fund; and
(b) welcome him to that role.
13/09 ADDITIONAL VOLUNTARY CONTRIBUTIONS (Agenda Item 13E)
The Committee considered a report (PF13E) which was the regular review of Oxfordshire Pension Fund's Additional Voluntary Contributions provision and looked at the performance of the provider.
RESOLVED: to:
(a) note the report;
(b) confirm the continued use of the Council’s AVC provider; and
(c) agree to receive future reports at the August meeting of the Committee.
15/09 INDEPENDENT FINANCIAL ADVICE: PRIVATE EQUITY PORTFOLIO (Agenda Item 14)
The Pension Fund Committee, at its meeting on 26 November 2008, had requested the County Solicitor to advise on the processes which needed to be followed on obtaining independent financial advice on the Private Equity Portfolio.
The report set out the background to how the Committee had previously dealt with these matters and set out a range of options that the Committee was recommended to consider.
RESOLVED: to continue with current practice as set out in paragraph 11.1 of the report.
16/09 OXFORDSHIRE PENSION FUND BUSINESS PLAN AND BUDGET FOR 2009/10 (Agenda Item 15)
The Committee considered a report (PF15) which set out the annual business plan and budget for the 2009/10 financial year and also included a member training programme and an investment management/scheme administration budget.
Members commented on the value of internal training and the ‘Fundamentals’ Training Course provided by the Local Government Employers and their Annual Conference.
RESOLVED: to:
(a) approve the Business Plan, as set out at Annex 1, for 2009/10;
(b) approve the Investment Management and Scheme Administration Budget for 2009/10, as set out in Annex 2;
(c) subject to the comments above, agree the arrangements for member training, as set out in the report and Annex 3;
(d) receive a report on the role of the Pension Fund Committee at its August meeting.
17/09 INVESTMENT VALUATION MONITORING ARRANGEMENTS (Agenda Item 16)
At the last meeting, the Committee requested a report on the arrangements for maintaining an up to date valuation of Pension Fund Investments. The report (PF16) discussed the arrangements.
RESOLVED: to:
(a) note the revised arrangements for monitoring the value of the Fund’s investments;
(b) review the arrangements once the world financial situation was more settled.
18/09 CIPFA LOCAL AUTHORITY PENSION FUND INVESTMENT STATISTICS (Agenda Item 17)
The Committee considered a report (PF17) giving statistics that covered investment returns for 3, 5 and 10-year periods ended 31 March 2008. The statistics also covered asset distribution, showing the percentage weighting of funds in each major asset class.
RESOLVED; to receive this report and for officers to consider what could be learned from the top three authorities in the tables.
19/09 PAYMENT OF A DEATH GRANT (Agenda Item 18)
The Committee considered a report (PF18) which sought Committee approval to make payment.
RESOLVED: to make payment of the death benefit to the deceased member’s son.
20/09 WRITE OFF (Agenda Item 19)
The Committee considered a report (PF19) which informed the Committee of the amounts which had been written off.
RESOLVED: to note this report.
21/09 ANNUAL PENSION FORUM (Agenda Item 20)
The Assistant Chief Executive and Chief Finance Officer reported that there were no issues arising from the last Pension Forum held on 5 December 2008.
There was discussion regarding the most appropriate date for the next Forum meeting.
RESOLVED: to note the report and to consider the date of the next Annual Pension Forum at the next meeting.
22/09 CORPORATE GOVERNANCE AND SOCIALLY RESPONSIBLE INVESTMENT (Agenda item 21)
The Assistant Chief Executive and Chief Finance Officer had nothing specific to report for this quarter but it was 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
................................................................................... in the Chair
Date of signing.................................................................. 2009
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