Agenda and minutes

Councillor Richard Langridge gave his apologies.

Councillors Darke, Fooks, Harvey, Lilly, Patterson and Service each declared an interest 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 1 June 2012 (PF3) and to receive information arising from them.

The Minutes of the meeting of the Committee held on 1 June 2012 were approved and signed subject to the inclusion of Councillors Richard Langridge and Jerry Patterson to those recorded as present at the meeting.

With regard to Minute 26/12 – At the request of the Committee, Mr Collins undertook to submit a report to the next meeting setting out the lessons learned from the lengthy transition time of the Wellington transfer, in order to set a pathway for the future so that funds could be moved across as expeditiously as possible.

There were no petitions submitted or any requests to address the meeting by members of the public.

10:05

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 June 2012  using the following tables:

In addition to the above tables, the performance of the Fund Managers over the past 18 months 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 8, 9, 10 and 11 on the agenda.

Mr Davies reported that the second quarter for 2012 was not a good quarter for depreciation, commenting that the overall value of equities had fallen by £33m. There had, however, been a steady move up in equities since the end of June. Bonds had increased. He added that towards the end of August the Fund had gained a further £20m, which gave an approximate overall value of £1.6m 290bn.  Over the second quarter 2012 and over 12 months the Fund was performing in line with the benchmark and was performing -0.3% over 3 years and -1.5% over 5 years.

RESOLVED: to receive the tables and graphs; and that the information contained in them be borne in mind insofar as they related to items 8, 9,10 and 11 in the Agenda.

The Committee is RECOMMENDED that the public be excluded for the duration of items 7, 8, 9, 10, 11, 12, 13 and 17 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 item 12, there is no report circulated with the Agenda. Any exempt information will be reported orally.

It was RESOLVED that the public be excluded for the duration of items 7, 8, 9, 10, 11, 12, 13 and 17 in the Agenda since it was likely that if they were present during those items there would be a disclosure of exempt information as defined in Part 1 of Schedule 12 A 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 disclosing the information.

10:20

The representative (Karen Thrumble) of the WM Company will review the Oxfordshire County Council Pension Fund’s investment performance for the twelve months ended 31 March 2012. The presentation will include a comparison to benchmark data from the WM Local Authority Pension Fund Universe.

The Committee is RECOMMENDED to note the report.

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.

Karen Trumble, representing the WM Company, presented her report (PF7) on the Pension Fund’s investment performance for the 12 months ended 31 March 2012. The presentation compared Oxfordshire’s performance against its own customised benchmark and against the WM Local Authority Pension Fund Universe. A copy of her presentation is attached to the signed copy of the Minutes.

The public were 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.

RESOLVED: to take note of the points raised in the presentation and to thank Karen Trumble for her presentation.

11:00

Report of the Independent Financial Adviser (PF8).

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 of the Independent Financial Adviser (PF8) which set out an overview of the current and future investment scene and market developments across various regions and sectors. Members asked a number of questions, to which the Independent Financial Advisor responded.

The public were 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.

RESOLVED: To receive the report, tables and graphs and the oral report of the Independent Financial Manager and to bear his conclusions in mind when considering the Fund Managers’ reports.

11:15

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

(2)               The representatives (Nicola Staunton and Ian Link) of our new Fund Manager will:

(a)   report on their planned approach to managing their new mandate;

(b)   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 June 2012; and

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

In support of the above is their report for the period to 30 June 2012. This will be circulated at the meeting itself.

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 I. Link and Mr T. Sutton (who attended in place of Ms. N. Staunton) gave a summary of the profile and future strategy of Wellington.

The public were 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.

RESOLVED: to note the summaries.

11:55

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

(2)               The representatives (Anthony Dickinson and Iain McCombie) 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 June 2012;

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

In support of the above is their report for the period to 30 June 2012.

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. A. Dickson and Mr. I. McCombie, 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 June 2012.

The public were 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.

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

12:35

The Independent Financial Adviser will report orally on the main issues arising from the reports from UBS 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.

The Independent Financial Adviser tabled a report on the main issues arising from the reports from UBS in conjunction with information contained in the tables and graphs at Agenda Item 5 (a copy of which is attached to the signed Minutes). He also reported orally on a telephone communication with Legal & General. He pointed out that UBS had performed poorly in the second quarter, adding also that Steve Lee had left the company, to be replaced by Malcolm Gordon. The performance of Legal & General remained good.

Mr Davies also reported on a meeting with Adam Street in preparation for a report to the next meeting of the Committee.

The public were 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.

RESOLVED: To note the reports.

12:40

The Independent Financial Adviser will, if necessary, summarise the foregoing reports of the Fund Managers 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. 

The public were 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 further comments.

12:45

The report (PF13) provides details of the annual review of the Fund’s Additional Voluntary Contribution (AVC) Scheme, including issues regarding the performance of  the individual funds and the Scheme Provider (Prudential) itself.

The Committee is RECOMMENDED to note the report and to confirm the continued use of Prudential as the Council’s AVC provider.

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 Scheme Provider involved and would prejudice the position of the authority's investments in funding the Pension Fund.

LUNCH

The Committee considered a report (PF13) that provided details of the annual review of the Fund’s Additional Voluntary Contribution (AVC) Scheme. The report also included issues regarding the performance of the individual funds and the Scheme Provider (Prudential) itself.

The public were 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 Scheme Provider involved and would prejudice the position of the authority's investments in funding the Pension Fund.

RESOLVED: to note the report and to confirm the continued use of Prudential as the Council’s AVC provider.

ORDER OF BUSINESS

RESOLVED: that Agenda Items 17, 15 and 16 be taken, in that order, to be followed by Agenda Items 14, 18 to end.

14:35

The report (PF17) updates the Committee on new employers within the Fund, including new scheduled bodies (academy schools) and Transferee Admission Bodies (following outsourcing exercises). It also provides information on the closure of a scheme employer. The report also covers the changing membership of the Fund and the potential future implications in terms in terms of cash flow and investment decisions. In addition it considers the necessity of maintaining previous insurance arrangements required of admitted bodies.

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.

The Committee is RECOMMENDED to:

a)     note the above applications admitted body status as agreed under delegated powers;

b)    agree the recommendation as contained in the exempt report PF17;

c)     determine whether the Insurance Scheme for unpaid contributions should be discontinued; and

d)     note the cash flow position for the Fund and ask Officers to monitor the situation and bring further reports back to the Committee as necessary.

RE-ADMISSION OF PRESS AND PUBLIC

The Committee considered a report (PF17) which gave an update on new employers within the Fund, including new scheduled bodies (academy schools) and Transferee Admission Bodies (following outsourcing exercises). The report also provided information on the closure of a scheme employer. It also covered the changing membership of the Fund and the potential future implications in terms of cash flow and investment decisions. In addition, it considered the necessity of maintaining previous insurance arrangements required of admitted bodies.

Sally Fox informed the Committee of amendments which had been made to the detail of one of the contracts. She assured the Committee that this did not alter the position or the recommendation being put to Members.

The public were 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..

Following a number of questions raised by Members it was RESOLVED to:

(a)               note the applications for admitted body status, as agreed under delegated powers;

(b)               approve the recommendation as contained in the exempt report PF17;

(c)               discontinue the insurance scheme for unpaid contributions; and

(d)               note the cash flow position for the Fund and to ask the Officers to monitor the situation and bring further reports back to the Committee as necessary.

14:15

The report (PF15) covers the outturn expenditure and income for both the Pensions Investments and Pension Administration teams; and explains any key variations from the budgets initially approved by this Committee.

The Committee is RECOMMENDED to receive the report and to note the outturn position.

The Committee had before them a report (PF15) which covered the outturn figures for both the Pension Investment and Administration Teams, and which explained any key differences for the approved budgets.

Mrs Ross responded to questions from Members.

RESOLVED: to receive the report and to note the outturn position.

14:25

The report (PF16) provides the annual review of the Pensions Administration Team, highlighting key performance indicators and any key issues over the past year.

The Committee is RECOMMENDED to note the report.

EXEMPT ITEM

The Committee had before them a report (PF16) which gave information on the annual review of the Pensions Administration Service, highlighting key performance indicators and any key issues over the past year.

Sally Fox undertook to check on the distribution of Member’s annual pension statements.

RESOLVED: to note the report.

14:00

The draft Annual Report and Accounts for 2010/11 for the year ended 31 March 2012 is attached at PF14. This provides detailed information on the operation and performance of the Fund. The final report will be brought to the Committee in December.

A representative (Mary Fetigan) of the Audit Commission will attend to present the findings and to respond to questions from Members.

The Committee is RECOMMENDED to receive the draft report and accounts for 2010/11.

The Committee considered the draft Annual Report and Accounts for 2011/12 (PF14) which showed the final accounts for the Pension Fund ended 31 March 2012 and provided details on how the Fund operated, including sections on membership and investments.

Mary Fetigan, representing the Audit Commission, attended the meeting to present the findings and to respond to questions from Members.

RESOLVED: to receive the draft report and accounts for 2010/11 and to thank Mary Fetigan for her presentation.

14:50

The report (PF18) seeks committee approval of the new procedures to be introduced following a change to the Administration Regulations allowing the administering authority to make payment of benefits to an authorised person in instances where the member is incapable of managing their own affairs.

The Committee is RECOMMENDED to:

a)                 decide whether it wishes to introduce an internal procedure for payment of benefits in cases where no formal arrangements exist;

b)                determine what medical evidence is required to support the internal procedure; and

c)                 delegate the decision making process to the Assistant Chief Executive & Chief Finance Officer.

The Committee considered a report (PF18) which sought approval for new procedures to be introduced following a change to the Administration Regulations allowing the administering authority to make payment of benefits to an authorised person in instances where the member is incapable of managing their own affairs.

RESOLVED:

(a)               to introduce an internal procedure for the payment of benefits in cases where no formal arrangements exist;

(b)               that appropriate medical evidence be submitted to support the internal procedure; and

(c)               to delegate the decision making process to the Assistant Chief Executive & Chief Finance Officer, following consultation with the Chairman, Deputy Chairman and Opposition Group Spokesperson.

14:55

The report (PF19) will provide the Committee with summary details of the amounts written off in the last quarter, in accordance with Financial Regulations of the Fund.

The Pension Fund Committee is RECOMMENDED to note the report.

The Committee had before them a report (PF19) which informed them of any write off’s that had been agreed by Officers in line with the approved arrangements set out in the Scheme of Financial Delegation for the Fund.

RESOLVED: to note the report.

15:00

This item will cover any issues that need to be brought to the attention of the Committee.

The Committee noted that there were no other issues to report.

15:05

To agree a proposed date of Friday 14 December 2012 for the 2012 Annual Pension Forum.

RESOLVED: that the 2012 Annual Pension Forum be held on Friday 14 December 2012.