Return to AgendaITEM PF3
Pension Fund committee
MINUTES of the meeting held on 28 May 2008 commencing at 10.15 am and finishing at 3:18 pm.
Present:
Voting Members: Councillor David Harvey - in the chair
Councillor Jean Fooks Councillor Neville Harris Councillor Ray Jelf Councillor Dermot Roaf Councillor Don Seale Councillor Bill Service
Richard Langridge
By Invitation: Mr A. Bushell (Independent Financial Advisor) Mr M. Stemp ((UBS) Mr N. Melhuish (UBS) Mr J. Cloke (Legal & General) Mr M. Walsh (Legal & General)
Officers:
Whole of meeting: Mr. S. Collins and Mrs S. Fox (Shared Services), Mr. P. Gerrish, Mr. T. Wheeler and Mrs S Whitehead.
Part of meeting:
The Committee considered the matters, reports and recommendations contained or referred to in the agenda for the meeting, together with a revised Annex 3 to report PF19 and decided as set out below. Except insofar as otherwise specified, the reasons for the decisions are contained in the agenda, reports and revised document, copies of which are attached to the signed Minutes.
21/08 ELECTION OF CHAIRMAN FOR THE 2008/09 COUNCIL YEAR
RESOLVED: that Councillor David Harvey be elected to chair the Committee for 2008/09 Council Year.
22/08 ELECTION OF DEPUTY CHAIRMAN FOR THE 2008/09 COUNCIL YEAR
RESOLVED: that Councillor Ray Jelf be elected as Deputy Chairman for the Committee for 2008/09 Council Year.
23/08 APOLOGIES FOR ABSENCE AND TEMPORARY APPOINTMENTS
Apologies for absence and temporary appointments were received as follows:
24/08 DECLARATIONS OF INTEREST
Councillors Fooks, Harvey, Service and Langridge (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.
25/08 MINUTES
The Minutes of the meeting of the Committee held on 21 February 2008 were approved and signed.
Matters Arising
It was noted that a copy of the information relating to members whose employment was part time would be attached as an Annex to the minutes for this meeting (download as .doc file).
26/08 OVERVIEW OF PAST AND CURRENT INVESTMENT POSITION (Agenda item 7)
The Committee was advised that Tables 1 to 7 had been compiled from the custodian's records. The custodian as the Pension Fund's prime record keeper had accrued 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 Committee was also 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 2008.
There was some discussion of the investment in private equities and it was agreed that a report be submitted to a future meeting.
RESOLVED:
(a) 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.
(b) that that a report be submitted to the next meeting to consider whether to increase the percentage of funds in private equity.
27/08 EXEMPT ITEMS
RESOLVED: that the public be excluded for the duration of items 8E, 9E, 10E, 11E, 12E, 13E, 14E, 15E and 16E 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.
ITEMS FOLLOWING THE EXCLUSION OF THE PRESS AND PUBLIC
28/08 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 updated the Committee orally at the meeting 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 in mind the Independent Financial Adviser’s conclusions when considering the Fund Managers’ reports.
29/08 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 Baillie Gifford in conjunction with information contained in the tables (Agenda Item 7). He advised that the performance of Alliance Bernstein had come under some pressure. He felt that the position of Baillie Gifford was more positive than previously and a report would be submitted to the next meeting.
RESOLVED; to note the main issues arising from the reports.
30/08 UBS GLOBAL ASSET MANAGEMENT (Agenda Item 10E)
The representatives (Mr M Stemp and Mr N Melhuish) 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 that ended on 31 March 2008 and gave their views on the future investment scene.
Responding to a comment from the Chairman concerning the performance target for the TAA fund, Mr Stemp stated that he felt that the target of 20% was still realistic. The market in relation to the fund was volatile but there were a number of opportunities and he believed that it would continue to deliver strong returns.
RESOLVED: to note the main issues arising from the presentation.
31/08 LEGAL & GENERAL (Agenda Item 11E)
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 March 2008 and gave
RESOLVED: to note the main issues arising from the presentation.
32/08 SUMMARY BY THE INDEPENDENT FINANCIAL ADVISER (Agenda Item 12E)
The Independent Financial Adviser stated that he had nothing to add to his comments made earlier in the meeting.
33/08 TRANSFER OF ASSETS (Agenda Item 13E)
The Committee considered a report (PF13E) which explained the process for transferring the UBS UK Equities and Bond Portfolios to Legal & General. The information contained in paragraph 11 was updated orally.
RESOLVED: to note this report and to thank Legal and General for carrying out a very successful and cost effective transition.
34/08 APPOINTMENT OF A PASSIVE MANAGER - UPDATE ON THE TENDER PROCESS (Agenda Item 14E)
The Committee considered a report (PF14E) that set out a recommended process and timetable for appointing a Passive Manager.
During consideration of the report some concern was expressed at the appointment of an interim manager. Members queried the balance of the criteria for appointment feeling that 25% on the cost element was perhaps on the low side. Tony Wheeler explained the reasons for the split between cost and ability criteria.
RESOLVED: to:
(a) delegate the short listing, interview and appointment of a passive manager to officers and the Independent Financial Adviser;
(b) request officers and the Independent Financial Adviser to report jointly to the next Committee meeting their reasons for selecting and appointing the successful manager.
35/08 APPOINTMENT OF OXFORDSHIRE PENSION FUND'S CUSTODIAN (agenda Item 15E)
The Committee considered a report (PF15E), which set out the process for appointing a global custodian and the reasons for re-appointing the incumbent Custodian, BNY Mellon.
RESOLVED: to note this report and to endorse the re-appointment of BNY Mellon made by the officers and the Independent Financial Adviser.
36/08 ADDITIONAL VOLUNTARY CONTRIBUTIONS (Agenda Item 16E)
The Committee considered a report (PF16E), which is the regular review of Oxfordshire Pension Fund's Additional Voluntary Contributions provision and also looked at the performance of their provider.
RESOLVED: to note this report.
ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC
At this point it was agreed to vary the order of the items on the agenda.
37/08 STATUS OF THE PENSION FUND (Agenda Item 18)
The Committee considered a report (PF18), which set out the position on the status of the pension fund and the position in respect of whether the Committee should follow the Council’s contract/procurement rules.
The Chairman advised that in noting the report he would continue to pursue the matter.
RESOLVED: to note the report.
38/08 APPOINTMENT OF AN INDEPENDENT FINANCIAL ADVISER – TENDER PROCESS (Agenda Item 17)
The Committee considered a report (PF17), on the proposed process for the appointment of an independent financial adviser.
RESOLVED: to:
(a) endorse the proposed arrangements for appointing an Independent Financial Adviser; and
(b) appoint Councillor Harvey, Councillor Jelf and the Liberal Democrat spokesperson or nominee to the appointment panel.
39/08 THE GOVERNANCE COMPLIANCE STATEMENT (Agenda Item 19)
The Committee considered a report (PF19) which followed on from the report to the last meeting and the requirements under the Local Government Pension Scheme (LGPS) Regulations to publish a Governance Compliance Statement. The purpose of this Statement was to set out the extent to which the governance arrangements for the Oxfordshire LGPS Pension Fund complied with the best practice principles set out by the Government in statutory guidance. At the last meeting, it had been stated that Oxfordshire was non-compliant in one area of best practice, and partially compliant in a further three areas.
The committee whilst not wishing to change the Governance Policy Statement in respect of the voting rights of the Beneficiaries Observer agreed to amend it to include their reasons for not giving voting rights to the Beneficiaries Observer. These reasons were in line with the report, and in particular the wish to ensure there was no disincentive to elect a County Council employee to the role, given that that group was the largest single group of stakeholders. They noted that by stating the reasons in the Policy the Oxfordshire LGPS Pension Fund would then become compliant.
RESOLVED: that:
(a) no changes be recommended to Council in respect of the membership, substitutions and voting rights of the current Pension Fund Committee;
(b) there be no change in the Governance Policy Statement in respect of the voting rights of the Beneficiaries Observer but that the reasons for not giving voting rights to the Beneficiaries Observer be included in the Statement; and
(c) the revised Governance Compliance Statement, as presented at Annex 2 to the report, and as amended in line with the change agreed at (b) above, be agreed for submission to the Department for Communities and Local Government.
40/08 CONSULTATION ON COST SHARING PROPOSALS (Agenda Item 20)
The Committee considered a paper (PF20) seeking views on the consultation paper issued by the Department of Communities and Local Government on 4 March 2008. The consultation paper set out the principles and proposals for a cost sharing mechanism to be in place by March 2009. This cost sharing would determine how scheme costs could be shared between scheme members and scheme employers to ensure the long term viability of the Local Government Pension Scheme.
During discussion members expressed their concerns over the danger to the long term future of the LGPS of the capping proposals in practice. They felt that the answer to question 13 needed to be strengthened and suggested that the first sentence be removed
RESOLVED: to endorse the proposed response, as included in the annex to the report and as amended to reflect the comments made at the meeting, for submission to the Department for Communities and Local Government.
41/08 REQUESTS TO BUY ADDITIONAL PENSION – MEDICAL REPORT (Agenda Item 21)
The Committee considered a report (PF21) outlining new arrangements under the Local Government Pension Scheme (Benefits, Membership and Contributions Regulations 2007 and the Local Government Pension Scheme (Administration) Regulations 2007 that came into force on 1 April 2008. In particular the Committee was asked to consider whether an employees request to buy additional pension should be accompanied by a medical report
RESOLVED: to:
(a) resolve that a member must provide a medical report before requesting to buy additional pension; and
(b) delegate responsibility to the Pension Services Manager to determine in light of the medical report whether to accept the request.
42/08 CONTRACT FOR ACTUARIAL SERVICES (Agenda Item 22)
The Committee considered a report (PF22), which detailed the provisions of the current contract for actuarial services and sought Committee approval to take the option of extending the current arrangements for one year.
RESOLVED: to agree the extension of the current actuarial contract for a period of one year.
43/08 ADMISSION AGREEMENTS (Agenda Item 23)
The Committee considered a report (PF23), which set out applications for admission to the fund and sought Committee approval for their admission.
RESOLVED: to approve the applications in the report subject to their agreeing to the terms of the Admission Agreements and this Committee being informed when the agreements are signed.
44/08 PAYMENT OF DEATH GRANT (Agenda Item 24)
The Committee considered a report (PF24), which requested the Committee, as Administering Authority, to exercise its discretionary powers in making payment of a death grant contrary to the wishes expressed by the deceased pensioner.
RESOLVED: to agree that payment of the death grant should be made solely to the son of the deceased scheme member.
45/08 NOMINATED COHABITING PARTNERS (Agenda Item 25)
The Committee considered a report (PF25) outlining new arrangements under the Local Government Pension Scheme (Benefits, Membership and Contributions Regulations 2007 and the Local Government Pension Scheme (Administration) Regulations 2007 that came into force on 1 April 2008. These regulations introduced a new group of beneficiaries who would have an entitlement to benefits from the scheme following the death of a member. These are known as nominated cohabiting partners.
The Committee was asked to consider what information it would accept to check whether the partnership was eligible under the terms of the regulations.
RESOLVED: to:
(a) endorse the draft declaration form (Annex 1);
(b) agree not to seek additional documentary evidence under usual circumstances.
46/08 ANNUAL PENSION FORUM (Agenda Item 26)
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. The next Forum was to be held on 5 December 2008.
RESOLVED: to note the report.
47/08 CORPORATE GOVERNANCE AND SOCIALLY RESPONSIBLE INVESTMENT (Agenda Item 27)
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.................................................................. 2008
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