Return to AgendaITEM PF3
PENSION FUND committee
MINUTES of the meeting held on 27 August 2008 commencing at 10.00 am and finishing at 12.54 pm
Present:
Voting Members: Councillor David Harvey - in the chair
Councillor Alan BrydenCouncillor Neville Harris Councillor Ray Jelf Councillor Dermot Roaf Councillor Don Seale
Councillor Richard Langridge (co-opted member) Councillor Bob Price (co-opted member)
By Invitation: Mr A Bushell (Independent Financial Adviser) Mr L Robb (Baillie Gifford) Mr G Callahan (Baillie Gifford) Ms K Thrumble (WM Company)
Officers: Whole of meeting: Mr S Collins and Mrs S Fox (Shared Services); Mr P Gerrish and Ms M Holyman (Corporate Core); Mr T Wheeler (consultant)
The Committee considered the matters, reports and recommendations contained or referred to in the agenda for the meeting, together with the following additional document (more up-to-date information on the private equity sector) 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.
48/08 APOLOGIES FOR ABSENCE AND TEMPORARY APPOINTMENTS
An apology for absence was received from Councillor Bill Service.
49/08 DECLARATIONS OF INTEREST
Councillors Harvey and Price (co-opted member) declared personal interests as members of the Pension Fund Scheme under the provisions of Section 18 of the Local Government and Housing Act 1989.
50/08 MINUTES
The Minutes of the meeting of the Committee held on 28 May 2008 were approved and signed.
The Chairman reported that Mr Wheeler had left the employ of the Council but had agreed to assist, on a part-time basis, with the transitional period.
The Committee wished him well in his retirement and thanked him for his work for the Committee.
51/08 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). He accrued for dividends and recoverable overseas tax within his valuation figures and might have used different exchange rates and pricing sources compared with the fund managers. In addition the Committee was advised that the custodian 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 30 June 2008.
RESOLVED: to
(a) receive the tables, and that the information contained in them be borne in mind, insofar as they relate to items 8E and 9E on the agenda;
(b) note that the limited partnership and quoted holdings would be shown separately in Table 7 for the next meeting of the Committee.
52/08 EXEMPT ITEMS
RESOLVED: that the public be excluded for the duration of items 6E-15E 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.
ITEMS FOLLOWING THE EXCLUSION OF THE PRESS AND PUBLIC
53/08 WM COMPANY PRESENTATION ON THE PENSION FUND’S INVESTMENT PERFORMANCE FOR THE TWELVE MONTHS ENDED 31 MARCH 2008 (Agenda Item 6E)
Ms K Thrumble, the WM Company, reviewed the Oxfordshire Pension Fund’s investment performance for the twelve months ended 31 March 2008. The presentation compared Oxfordshire’s performance against its own customised benchmark and against the WM Local Authority Pension Fund Universe.
She reported that actively managed funds had performed less well than index tracker funds. Twenty per cent of local authority pension fund assets were passively tracked compared with a third of private companies’ pension fund assets. She pointed out that the performance of Oxfordshire’s fund managers over the twelve months had been below the average for the WM Local Authority Pension Fund Universe and the fund managers had underachieved their performance targets over the last three-year period. Members asked questions.
RESOLVED: to thank Ms Thrumble for her presentation and to receive the report.
54/08 OVERVIEW AND OUTLOOK FOR INVESTMENT MARKETS (Agenda Item 7E)
The Committee considered a report (PF7E) 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, tables and oral report and to bear the Independent Financial Adviser’s conclusions in mind when considering the Fund Managers’ reports.
55/08 REPORT OF MAIN ISSUES ARISING FROM REPORTS OF THE FUND MANAGERS NOT REPRESENTED AT THIS MEETING (Agenda Item 8E)
The Independent Financial Adviser reported orally on the main issues arising from the reports from Alliance Bernstein, Legal & General and UBS in conjunction with information contained in the tables (Agenda Item 5). He highlighted the underperformance of Alliance Bernstein. He pointed out that UBS were below the benchmark allocation for property and asked the Committee to consider increasing the control range of cash that UBS could hold in the current economic climate.
RESOLVED: to note the main issues arising from the reports and to agree to increase the control range of cash that UBS could hold from 0-6% to 0-10%.
56/08 BAILLIE GIFFORD (Agenda Item 9E)
The representatives (Mr L Robb and Mr G Callahan) 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 30 June 2008. They gave their views on the future investment scene. They responded to questions from Members.
RESOLVED: to note the main issues arising from the presentation and to receive Baillie Gifford's quarterly and presentation reports for the quarter ending 30 June 2008.
57/08 SUMMARY BY THE INDEPENDENT FINANCIAL ADVISER (Agenda Item 10E)
The Independent Financial Adviser reported that he had nothing to add to the comments he had made earlier in the meeting.
58/08 BAILLIE GIFFORD – SUPPLEMENTARY REVIEW (Agenda Item 11E)
In December 2007, the Committee agreed that the investment performance of Baillie Gifford should be reviewed in six months’ time. The Committee considered a report (PF11E) which set out the outcome of the review.
RESOLVED: to note Baillie Gifford’s improving investment performance.
59/08 HEDGE FUNDS - REVIEW (Agenda Item 12E)
The Committee considered a report (PF12E) which reviewed the performance of hedge funds. The report concluded that these funds had shown satisfactory performance against the benchmark since inception and in the volatile markets of the past year they had provided some stability and had added value.
RESOLVED: to agree the recommendations in the report.
60/08 TACTICAL ASSET ALLOCATION FUND - REVIEW (Agenda Item 13E)
In December 2007, the Committee requested that the performance of the Tactical Asset Allocation Fund should be formally reviewed in six months’ time. The Committee considered a report (PF13E) which set out the outcome of the review.
RESOLVED: to agree the recommendation in the report.
61/08 STRATEGIC ALLOCATION OF ASSETS – ANNUAL REVIEW (Agenda Item 14E)
The Committee considered a report (PF14E) which reviewed the strategic allocation of the Fund's investments and additional information circulated at the meeting.
RESOLVED: to
(a) agree the recommendations in the report;
(b) ask the Independent Financial Adviser to report to the Committee on the strategy for investing in private equity.
62/08 APPOINTMENT OF A PASSIVE MANAGER (Agenda Item 15E)
The Committee considered a report (PF15E) which set out the outcome from the process of appointing a Passive Manager.
RESOLVED: to note that Legal & General Investment Management had been successful in tendering to provide the Fund’s Passive Mandate for the next 10 years.
ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC
63/08 DRAFT ANNUAL REPORT AND ACCOUNTS FOR 2007/08 (Agenda Item 16)
The Committee considered the draft Annual Report and Accounts (PF16) for 2007/08 which showed the final accounts for the Pension Fund for the year ended 31 March 2008 and provided details on how the Fund operated, including sections on membership and investments. The report also included the Statement of Investment Principles.
RESOLVED: to receive the draft report and accounts for 2007/08.
64/08 PENSION FUND INVESTMENT AND ADMINISTRATION EXPENSES OUTTURN REPORT FOR THE YEAR ENDED 31 MARCH 2008 (Agenda Item 17)
The Committee considered a report (PF17) which compared the 2007/08 budget with the outturn for the year. Investment Management underspent the budget by £290,000, mainly as a consequence of lower fees for Fund Management (£141,000) and Custody (£65,000) plus increased income from stock lending (£67,000). There was also an underspend of £20,000 on administration of the scheme.
RESOLVED: to receive the report and to note the outturn position.
65/08 ADMISSION AGREEMENTS (Agenda Item 18)
The Committee considered a report (PF18) which updated the Committee on admissions/new admissions sought.
RESOLVED:
(a) Oxfordshire Connexions
(i) to approve the application from Oxfordshire Connexions subject to their agreeing to the terms of the Admission Agreements; and
(ii) to waive the need to put a bond in place;
(b) to note the change of status of Peers School and that the reference to “Oxfordshire Academy” in the report should read “Oxford Academy”;
(c) to note the completion of the Barnardo’s admission.
66/08 PAYMENT OF CHILD'S PENSION (Agenda Item 19)
The Committee considered a report (PF19) on whether payment of a child’s pension should continue.
RESOLVED: to agree that no further payments should be made in respect of this child’s pension.
67/08 PAYMENT OF DEATH BENEFIT (Agenda Item 20)
The Committee considered a report (PF20) which sought Committee approval to payment being made to one beneficiary in view of the failure to trace the second beneficiary.
RESOLVED: subject to the deceased scheme member’s daughter agreeing that no liability would fall on the County Council should her brother seek to claim a share of the death benefit in the future, to confirm that payment of the death benefit be made to the deceased scheme member’s daughter.
68/08 THE LOCAL GOVERNMENT PENSION SCHEME (AMENDMENT) REGULATIONS 2008 (Agenda Item 21)
The Committee considered a report (PF21) which updated members on changes to local government pension scheme regulations.
RESOLVED: to note the report.
69/08 ANNUAL PENSION FORUM (Agenda Item 22)
The Assistant Chief Executive and Chief Finance Officer reported that there were no issues arising from the last Pension Forum held on 4 December 2007. Councillor Harris enquired if it was known whether the current Beneficiaries’ Observer wished to continue since he had not attended meetings of the Committee on a number of occasions.
RESOLVED: to
(a) note the report and that the next Forum would be held on 5 December 2008;
(b) ask the officers to report to the Committee on whether the current Beneficiaries’ Observer wished to continue as the Beneficiaries’ Observer. .
70/08 CORPORATE GOVERNANCE AND SOCIALLY RESPONSIBLE INVESTMENT (Agenda Item 23)
The Assistant Chief Executive and Chief Finance Officer reported that she had nothing specific to report for this quarter but 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.
................................................................................... in the Chair
Date of signing.................................................................. 2008
|