Agenda and minutes

10:15

There were no apologies for absence.

Councillors Darke, Fooks, Harvey, Lilly, Patterson and Service declared personal interests as members of the Pension Fund Scheme under the provisions of Section 18 of the Local Government & Housing Act 1989.

To approve the minutes of the meeting held on  2 September 2011 (PF3) and to receive information arising from them.

The Minutes of the meeting of the Committee held on 2 September 2011 were approved and signed as a correct record.

With regard to Minute 35/11 - the Committee sent their good wishes for a speedy recovery to Sally Fox who had undergone a second operation as a result of a motor cycle accident. The Committee were reassured that most of her workload was being undertaken by the other managers.

With regard to Minute 51/11 – Mr Collins reported that the latest School to apply for academy status, Hanwell Fields Community School, Banbury, had objected to the approach being taken by the Actuary, but were unable to negotiate their contribution.

A request to speak was agreed by the Chairman in respect of Agenda Item 21.

10:20

Tables 1 to 10 are compiled from the custodian's records. The custodian is the Pension Fund's prime record keeper. He accrues 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 custodian also treats dividend scrip issues as purchases which the fund managers may not do. This may mean that there are minor differences between the tabled figures and those supplied by the managers.

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 2011 using the following tables:

In addition to the above tables, the performance of the Fund Managers over the past 3 years has been produced graphically as follows:

Graph 1                      Value of Assets

Graph 2  - 3                Baillie Gifford

Graph 4 -  5                Legal & General

Graph 6 – 10            UBS

The Committee is RECOMMENDED to receive the tables and graphs, and that the information contained in them be borne in mind, insofar as they relate to items 9, 10 and 11 on the agenda.

The Committee was advised that Tables 1 to 10 had been compiled from the custodian’s records. The custodian was the Pension Fund’s prime record keeper. He had 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 had also 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.

Mr Davies reported that the third quarter for 2011 had been a severe one for Equity markets and there had been a fall of approximately 15% in the Pension Fund, amounting to £131m. This had been offset by a small gain in Bonds of £9m. At the end of November there had been an appreciation of approximately £50m leading to an overall Fund Value of approximately £1,200m.

RESOLVED: to note the comments of the Independent Financial Adviser and to receive the tables and graphs and that the information contained in them be borne in mind insofar as they related to items 9, 10 and 11 on the agenda.

10:30

This report (PF6) will set out the benefits and costs of joining the Local Authority Pension Fund Forum in the context of the Committee’s corporate governance responsibilities and shareholder activism. Keith Bray, Forum Officer has asked to address the Committee on this item.

The Pension Fund Committee is RECOMMENDED to consider whether or not to join the Local Authority Pension Fund Forum at this time.

Mr Keith Bray, Forum Officer, Local Authority Pension Fund Forum, gave a presentation which set out the benefits and costs of joining the Local Authority Pension Fund Forum in the context of the Committee’s corporate governance responsibilities and shareholder activism.

Following a question and answer session with Mr Bray and then a member discussion, it was AGREED (by 6 votes to 3):

(a)               to thank Mr Bray for his presentation; and

(b)               not to join the Local Authority Pension Fund Forum at this time.

The Committee is RECOMMENDED that the public be excluded for the duration of items 8, 9, 10, 11, 12 and 13 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.

THE REPORTS RELATING TO THE EXEMPT ITEMS HAVE NOT BEEN MADE PUBLIC AND SHOULD BE REGARDED AS STRICTLY PRIVATE TO MEMBERS AND OFFICERS ENTITLED TO RECEIVE THEM.

NOTE: In the case of items 9 and 10, there are no reports circulated with the Agenda. Any exempt information will be reported orally.

It was RESOLVED that the public be excluded for the duration of items 8, 9, 10, 11,12 and 13 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 1 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 circumstances of each case, the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

It was AGREED that exempt item 9 on the Agenda be taken as the next item, to be followed by exempt item 8.

11:00

(1)               The Independent Financial Adviser will report orally on the performance and strategy of Adams Street Partners drawing on the tables at Agenda Items 5 and 8.

(2)               The representative (Mr Miguel Gonzalo) of the Fund Manager will:

(a)       report and review the present investments of his part of the Fund and his strategy against the background of the current investment scene for the period which ended on 30 September 2011;

(b)       give his views on the future investment scene.

In support of the above is his report for the period to 30 September 2011.

At the end of the presentation, members are invited to question and comment and the Fund Manager to respond.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to note the main issues arising from the presentation and to take any necessary action, if required.

The representatives, Mr. M. Gonzalo and Mr. D. Alcauz, reported on and reviewed the present investments in relation to their part of the Fund and their strategy against the background of the current investment scene for the period which ended 30 September 2011. The representatives responded to members’ questions.

It was AGREED to note the main issues arising from the presentation and to take any necessary action, if required.

10:50

Report of the Independent Financial Adviser (PF7).

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.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to receive the report, tables and graphs, 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.

The Committee considered a report (PF8) which set out an overview of the current and future investment scene and market developments across various regions and sectors. Members asked questions and the Independent Financial Advisor responded to them.

RESOLVED: to receive the report, tables and graphs, to receive the oral report of the Independent Financial Adviser and to bear these comments in mind when considering the reports of the Fund Manager.

11:40

(1)               The Independent Financial Adviser will report orally on the performance and strategy of Alliance Bernstein drawing on the tables at Agenda Items 5 and 8.

(2)               The representatives (Mr S Lee and Mr. N. Melhuish) 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 which ended on 30 September 2011;

(b)                 give their views on the future investment scene.

In support of the above is their report for the period to 30 September 2011.

At the end of the presentation, members are invited to question and comment and the Fund Managers to respond.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to note the main issues arising from the presentation and to take any necessary action, if required.

The representatives, Mr N. Melhuish and Mr. S. Lee, reported on and reviewed the present investments in relation to their part of the Fund and their strategy against the background of the current investment scene for the period which ended on 30 September 2011. The representatives responded to members’ questions.

RESOLVED: to note the main issues arising from the reports.

12:20

The Independent Financial Adviser will report orally on the main issues arising from the reports from Baillie Gifford and Legal & General in conjunction with information contained in the tables (Agenda Item 5).

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund.

The Committee is RECOMMENDED to note the main issues arising from the reports and to take any necessary action, if required.

Mr Davies reported that Baillie Gifford were performing well above target. Legal & General had performed marginally below the bench mark in the latest quarter, but continued to perform in line with their mandate, exceeding benchmark by 1.2% over a three year period.

RESOLVED to note the Independent Financial Adviser’s oral report.

12:25

The Independent Financial Adviser will, if necessary, summarise any other issues arising from the monitoring of our Fund Managers, including any update in respect of the change in Fund Manager as agreed at the March 2011 meeting; and answer any questions from members.

The public should be excluded during this item because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following prescribed category:

3.         Information relating to the financial or business affairs of any particular person (including the authority holding that information) and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would prejudice the trading activities of the fund managers involved and would prejudice the position of the authority's investments in funding the Pension Fund. 

Mr Davies reported that he had no additional comments to make on the existing Fund Managers performance and strategy. However, he gave an oral report on progress with regard to the interview process for the appointment of the new Global Equities Manager.

It was AGREED to note the Independent Financial Adviser’s summary.

12:30

Part 1 of this item sets out the details of recent Internal Dispute Resolution Procedure (IDRP) cases where the Administering Authority has made compensation payments to the complainant (PF13).

The Committee is asked to determine a current case, using this procedure, at Agenda Item 21 below.

The following information refers directly to the financial arrangements between the administering authority and individual members of the Pension Scheme.  The public should therefore be excluded for the consideration of this report because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following categories prescribed by Part I of Schedule 12A to the Local Government Act 1972 (as amended):

1.            Information relating to any individual;

2.            Information which is likely to reveal the identity of an individual;

3.            Information relating to the financial or business affairs of any particular person (including the authority holding that information)

and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would infringe the rights of the individual to privacy contrary to the general law and the duty of the authority to respect human rights and to comply with that law.

The Pension Fund Committee is RECOMMENDED to note the report, and the level of compensation payable from the Administration Budget.

The Committee had before them a report (PF13) that set out the details of recent Internal Dispute Resolution Procedure (IDRP) where the Administering Authority had made compensation payments to the complainant. This item was in preparation for Agenda Item 21 below when Members would be asked to determine a current case using this procedure.

It was RESOLVED to note the report.

ITEMS FOLLOWING THE RE-ADMISSION OF THE PRESS AND PUBLIC

12:35

This report (PF14) will inform the Committee of the recent consultation paper issued by the Department for Communities and Local Government, and asks the Committee to agree a response.

The Committee is RECOMMENDED to consider the issues raised in this report, and agree the consultation response as drafted at Annex 1 with any appropriate amendments, to be sent to the Government as the formal response of the Committee.

The Committee considered a report (PF14) which considered issues arising from a recent consultation paper issued by the Department for Communities and Local Government on Proposed Increases to Employee Contribution Rates and Changes to Scheme Accrual Rates.

RESOLVED to note the issues raised in the report PF14 and to agree the consultation response, as set out at Annex 1, for submission to the Government as the formal response of this Committee.

RESOLVED: to take Agenda Items 15 to19 inclusive following Agenda Item 21.

The Committee is RECOMMENDED that the public be excluded for the duration of the following item in the Agenda since it is likely that if they were present during this item there would be disclosure of exempt information as defined in Part 1 of Schedule 12A to the Local Government Act 1972 (as amended) and specified in relation to the respective item 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.

THE REPORT RELATING TO THE EXEMPT ITEM HAS NOT BEEN MADE PUBLIC AND SHOULD BE REGARDED AS STRICTLY PRIVATE TO MEMBERS AND OFFICERS ENTITLED TO RECEIVE IT.

It was RESOLVED that the public be excluded for the duration of item 21 in the Agenda since it was likely that if they were present during this item there would be disclosure of exempt information as defined in Part 1 of Schedule 12A to the Local Government Act 1972 (as amended) and specified in relation to the respective item in the Agenda and since it was considered that, in all circumstances of each case, the public interest in maintaining the exemption outweighed the public interest in disclosing the information,

14:00

Using the Procedure set out in Agenda Item 13 above, this item sets out the details of a current case, and asks the Committee to consider making a compensation payment to prejudice any future claim to the Pensions Ombudsman.

The following information refers directly to the financial arrangements between the administering authority and an individual member of the Pension Scheme.  The public should therefore be excluded for the consideration of this report because its discussion in public would be likely to lead to the disclosure to members of the public present of information in the following categories prescribed by Part I of Schedule 12A to the Local Government Act 1972 (as amended):

1.            Information relating to any individual;

2.            Information which is likely to reveal the identity of an individual;

3.            Information relating to the financial or business affairs of any particular person (including the authority holding that information)

and since it is considered that, in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, in that such disclosure would infringe the rights of the individual to privacy contrary to the general law and the duty of the authority to respect human rights and to comply with that law.

The Pension Fund Committee is asked to determine the recommendations as set out in the report.

Using the Procedure set out in Agenda Item 13 above, this item set out the details of a current case, and asked the Committee to consider making a compensation payment to prejudice any future claim to the Pensions Ombudsman.

The Committee determined the recommendations as set out in the report, accordingly.

READMITTANCE OF PRESS AND PUBLIC

12:55

A draft of the Annual Report and Accounts 2010/11 was approved by the Committee on 2 September 2011. A copy of the finalised Annual Report and Accounts 2010/11 has been circulated separately to members of the Committee and is also available for public inspection.

The Committee is RECOMMENDED to adopt formally the Pension Fund Annual Report and Accounts 2010/11.

A draft of the Annual Report and Accounts 2010/11 was approved by the Committee on 2 September 2011. A copy of the finalised Annual Report  and Accounts 2010/11 had been circulated separately to members of the Committee and had been available for public inspection.

The Committee RESOLVED to adopt formally the Pension Fund Annual Report and Accounts 2010/11.

13:00

This report (PF16) updates the Committee on the latest applications for Admitted Body status, as well as the specific arrangements relation to Foundation Schools.

The Pension Fund Committee is RECOMMENDED to approve the admission applications from:

·        Leonard Cheshire

·        Allied HealthCare

·        Food for Thought

·        Oxford Health

and note the retrospective changes in respect of Oxfordshire’s Foundation schools as listed in paragraph 16.

The Committee had before them a report (PF16) which gave an update on the latest applications for Admitted Body status, as well as the specific arrangements relating to Foundation Schools.

RESOLVED: to approve the admission applications from:

• Leonard Cheshire
• Allied HealthCare
• Food for Thought
• Oxford Health

and note the retrospective changes in respect of Oxfordshire’s Foundation schools as listed in paragraph 16.

13:05

This report (PF17) informs the Committee of the amounts approved for write off under the Fund’s Scheme of Delegation.

The Pension Fund Committee is RECOMMENDED to note this report

The Committee noted a report (PF17) which informed them of any write offs that had been agreed by the officers in line with the approved arrangements set out in the Scheme of Financial Delegation for the Fund.

RESOLVED: to note the report.

13:10

The Assistant Chief Executive & Chief Finance Officer has no other issues to report for this quarter but it should be noted that all the managers have included pages within their valuation reports which provide details on their voting at company AGMs, engagement with companies and their involvement with other socially responsible initiatives.

During discussion in relation to Agenda Item 6 above, the matter of whether the Committee were compliant with CiPFA guidance was raised in relation to corporate governance and socially responsible investment.

It was AGREED that consideration be given at the next meeting as to what is expected from the Fund Managers, prior to addressing the matter with the Fund Managers themselves.

13:10

The Assistant Chief Executive & Chief Finance Officer will report orally on any issues arising from the last Forum or about the Annual Pension Forum which will take place on 9 December 2011 at 10 am.

It was noted again that the Annual Pension Forum would take place on 9 December 2011 at 10am.