Agenda and minutes
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Contact: Julie Dean Tel: (01865) 815322; E-Mail: julie.dean@oxfordshire.gov.uk
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Apologies for Absence and Temporary Appointments Minutes: Councillor Tony Crabbe attended for Councillor Sandy Lovatt and apologies were received from Councillors Roy Darke and Richard Langridge. |
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Declarations of Interest - see guidance note Minutes: Councillors Fooks, Harvey, Lilly, Patterson and Service each declared personal interests as members of the Pension Fund Scheme under the provisions of Section 18 of the Local Government & Housing Act 1989. |
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Minutes: Approved and signed subject to the correction of ‘£25m’ to ‘$25m’ in Line 3 of the preamble to Minute 69/12.
With regard to the provisional date of 8 March 2013 for the seminar on infrastructure investments (Minute 72/12(c)), it was reported that it had not proved timely to hold it on that date but arrangements would be made to hold it in a few months time. |
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Petitions and Public Address Minutes: There were no petitions submitted or requests to address the meeting. |
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Overview of Past and Current Investment Position 10:15
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 31 December 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 Graphs 2 – 3 – Baillie Gifford Graphs 4 - 5 – Wellington Graphs 6 - 7 – Legal & General Graphs 8 – 12 - 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 7, 8, 9, 10 and 11 on the agenda. Minutes: Mr Davies reported that the fourth quarter of 2012 had seen a total appreciation of £36m plus £3.5m in bond value and a little in hedge funds. Since the end of December UK Equities had risen by 9.5% and overseas equities by 14%. Bonds were slightly down. With the equity appreciation, the overall value of equities was now on or above target range and still in line with asset allocation. RESOLVED: to receive the tables and graphs; and that the information contained in them be borne in mind insofar as they related to items 7, 8, 9, 10 and 11 on the agenda.
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EXEMPT ITEMS The Committee is RECOMMENDED that the public be excluded for the duration of items 7, 8, 9, 10, 11 and 12 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 11, there is no report circulated with the Agenda. Any exempt information will be reported orally. Minutes: RESOLVED: that the public be excluded for the duration of items 7,8,9,10,11 and 12 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 outweighs the public interest in disclosing the information.
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Overview and Outlook for Investment Markets 10:30
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. Minutes: The Committee considered a report of the Independent Financial Adviser (PF7) 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 Adviser 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 Adviser and to bear his conclusions in mind when considering the Fund Manager’s reports. . |
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Baillie Gifford 10:40
(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 7.
(2) The representatives (Mr A Dickson and Mr I 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 31 December 2012;
(b) give their views on the future investment scene.
In support of the above is their report for the period to 31 December 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. Minutes: 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 31 December 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 report.
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Wellington 11:20
(1) The Independent Financial Adviser will report orally on the performance and strategy of Wellington drawing on the tables at Agenda Items 5 and 7.
(2) The representatives (Ms N Staunton and Mr T Burgess) 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 31 December 2012;
(b) give their views on the future investment scene.
In support of the above is their report for the period to 31 December 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. Minutes: The representatives, Ms N. Staunton and Mr T. Burgess 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 31 December 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 report.
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Report of Main Issues arising from Reports of the Fund Managers not represented at this meeting 12:00
The Independent Financial Adviser will report on the main issues arising from the reports from UBS and Legal & General (PF10) 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. Additional documents:
Minutes: The Committee considered two notes of meetings which took place in February (PF10) with representatives from UBS Global Asset Management and with Legal & General Investment Management. 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.
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Summary by the Independent Financial Adviser 12:05
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. Minutes: The Independent Financial Manager reported that
Following a query from a member of the Committee about whether it would be possible to take the profits where appropriate and change the allocations, Mr Davies commented that as a result of recent performance, the bench mark was now at its 2% threshold, however there still remained a need to catch up to former levels. Mr Collins added that there would be an opportunity to look at the allocations overall at the next formal review which was due to take place at the March 2014 meeting. 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 Independent Financial Adviser’s summary.
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Annual Review of the Independent Financial Adviser 12:10
The Pension Fund employs the services of an Independent Financial Adviser (IFA). Peter Davies, the current IFA, was appointed from February 2009 for five years with an option to extend for a further five years. This is the fourth annual review of his activities (PF12). The report reviews his activities and performance over the last year, and considers any changes to the current arrangements and fee levels.
This item is exempt because its discussion in public might lead to the disclosure to members of the public present information relating to the financial or business affairs of any particular person (including the authority holding the information).
The Committee is RECOMMENDED to:
(a) note the report and consider if they wish to offer any feedback to Mr Davies in relation to his performance as IFA during the last year; and
(b) discuss any contractual issues arising from the report and to delegate authority to the Service Manager, Pensions, Insurance and Money Management for their agreement and signature.
Minutes: The Pension Fund employs the services of an Independent Financial Adviser (IFA). Peter Davies, the current IFA, had been appointed from February 2009 for five years with an option to extend for a further five years. This was the fourth annual review of his activities (PF12).
The public were excluded during this item because its discussion might 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.
RESOLVED to:
(a) thank the current Independent Adviser for his excellent work for the Committee over the last four years; (b) offer him a further five year extension of contract on expiry in January 2014 and to delegate to the Service Manager, Pensions, Insurance and Money Management the authority required to agree and sign a contract extension.
RE-ADMISSION OF THE PRESS AND PUBLIC |
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Fund Manager Monitoring Arrangements 12:20
Each year the Pension Fund Committee considers the arrangements for monitoring the performance of its Fund Managers. This report (PF13) sets out the proposed schedule for 2013/14 for approval.
The Committee is RECOMMENDED to approve the Fund Manager Monitoring Arrangements as set out in the report.
Minutes: Each year the Oxfordshire Pension Fund Committee considers the arrangements for monitoring the performance of its Fund Managers. The report (PF13) set down, for approval, the proposed schedule for 2013/14.
RESOLVED: to approve the Fund Manager Monitoring Arrangements as set out in the report PF13 |
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Corporate Governance - Voting 12:25
The report (PF14) sets out the current voting arrangements of the Oxfordshire Pension Fund and reviews voting activities during 2012.
The Committee is RECOMMENDED to:
(a) note the Fund’s voting policies and activities and consider whether or not they continue meet the requirements of the Oxfordshire County Council Pension Fund; and
(b) decide whether or not they wish to continue to use proxy voting advisors or fully delegate vote decisions to fund managers.
Additional documents: Minutes: The Committee had before them a report (PF14) which set out the current voting arrangements of the Oxfordshire Pension Fund and asking Members to consider whether they continued to meet the requirements of the Oxfordshire County Council Pension Fund. The report also reviewed voting activities during 2012.
RESOLVED: to
(a) note the Fund’s voting policies and activities; and
(b) fully delegate vote decisions to fund managers. |
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Annual Business Plan, Budget and Cash Management Strategy 2013/14 12:35
The report (PF15) sets out the Pension Fund annual business plan for the 2013/14 financial year which includes the business priorities and budget for 2013/14, the current risk register and the cash management strategy for 2013/14.
The Committee is RECOMMENDED to:
(a) approve the Business Plan and Budget for 2013/14 as set out at Annex 1;
(b) approve the Pension Fund Cash Management Strategy for 2013/14 as set out at Annex 2;
(c) delegate authority to the Assistant Chief Executive and Chief Finance Officer to make changes necessary to the Pension Fund Cash Management Strategy during the year, in line with changes to the County Council’s Treasury Management Strategy;
(d) delegate authority to the Assistant Chief Executive and Chief Finance Officer to open separate pension fund bank, deposit and investment accounts as appropriate; and
(e) delegate authority to the Assistant Chief Executive and Chief Finance Officer to borrow money for the pension fund in accordance with the regulations.
Additional documents:
Minutes: The Committee considered the Pension Fund Annual Business Plan, 2013/14 (PF15 - Annex 1) which included the key objectives of the Fund; details the service activities and the service priorities for the coming year; gives a budget for 2013/14 and sets out the latest risk register for the service. Annex 2 of the report PF15 set out the Cash Management Strategy for 2013/14.
RESOLVED: to
(a) approve the Business Plan and Budget for 2013/14, as set out at Annex 1;
(b) approve the Pension Fund Cash Management Strategy for 2013/14, as set out at Annex 2;
(c) delegate authority to the Assistant Chief Executive & Chief Finance Officer to make changes necessary to the Pension Fund Cash Management Strategy during the year, in line with changes to the County Council’s Treasury Management Strategy;
(d) delegate authority to the Assistant Chief Executive & Chief Finance Officer to open separate pension fund bank, deposit and investment accounts as appropriate; and
(e) delegate authority to the Assistant Chief Executive & Chief Finance Officer to borrow money for the pension fund in accordance with the regulations. |
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Academies and Pooling within the Oxfordshire LGPS Fund 12:40
The report (PF16) provides feedback on the results of the recent consultation exercise in respect of the options for pooling Academy schools within Oxfordshire’s LGPS Fund.
The Committee are recommended to consider the responses received, and determine what changes, if any, to make to the Funding Strategy Statement which would allow academies to be pooled for the purposes of the 2013 Valuation.
The covering letter which was sent out to all schools, together with the Consultation document on Options for Pooling are attached at Annex 1.
The Committee are RECOMMENDED to consider in light of the responses to the consultation, what changes, if any, it wishes to make to the Funding Strategy Statement in respect of pooling academy schools, which will then form the basis of the 2013 Valuation results.
Additional documents:
Minutes: The Committee had before them a report (PF16) which provided feedback on the results of the recent consultation exercise in respect of the options for pooling Academy schools within Oxfordshire’s LGPS Fund. Members were asked to consider the responses received and to determine what changes, if any, to make to the Funding Strategy Statement that would allow academies to be pooled for the purposes of the 2013 Valuation.
The covering letter which was sent out to all schools, together with the consultation document on options for pooling was attached at Annex 1.
Since publishing of the Agenda, further responses to the consultation had been received, and in light of these some revised recommendations were before the Committee. Details of these responses, together with the revised recommendations were included in an Addendum which was circulated around the meeting.
RESOLVED: that, in light of the responses to the consultation, to amend the Funding Strategy Statement in respect of pooling academy schools to include:
(a) the requirement to the pooling of all academy schools within Oxfordshire where total LGPS membership for the employer is 50 or less;
(b) the option for small academies to opt out of such a pool, subject to approval by the Committee of a financial case whereby the future pension liability is underwritten by the Academy Trust, such opt out, where agreed, to be permanent;
(c) the option to consider further pooling arrangements in respect of individual academy schools under a single Umbrella Trust; and
(d) the option for all academy employers where scheme membership exceeds 50 employees to join the pool on a permanent basis. |
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12:50
The report (PF17) seeks Committee approval for any new admissions to the Fund. It also updates the Committee on the cessation of a previous admitted body as a result of insolvency.
The Committee is RECOMMENDED to:
a) note the progress of previously approved applications for admitted body status; b) approve the application for admitted body status by Pabulum; c) approve the amendment to the admission agreement with Carillion; d) approve the application for admitted body status by The Banbury Museum Trust; e) note the information regarding the cessation of AAA NORCAP as a scheme employer; and f) agree the approach being proposed in respect of certain cessation situations, whereby subject to adequate safeguards, employers with no active members can still contribute towards a past service deficit, rather than be charged an immediate cessation valuation.
Minutes: The Committee’s approval was sought in relation to a number of proposed new admissions to the Fund (PF17). The report also updated members on the cessation of a previous admitted body and sought Committee agreement to an approach to be used in respect of certain cessation situations.
RESOLVED: to
(a) note the progress of previously approved applications for admitted body status;
(b) approve the application for admitted status by Pabulum;
(c) approve the amendment to the admission agreement with Carillion;
(d) approve the application for admitted body status by The Banbury Museum Trust;
(e) note the information regarding the cessation of AAA NORCAP as a scheme employer; and
(f) agree the approach being proposed in respect of certain cessation situations, whereby subject to adequate safeguards, employers with no active members can still contribute towards a past service deficit, rather than be charged an immediate cessation valuation. |
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12:55
This report (PF18) provides the Committee with summary details of the amounts written off in the last quarter, in accordance with the Financial Regulations of the Fund.
The Committee is RECOMMENDED to note the report.
Minutes: The Committee had before them a report (PF18) which provided summary details of the amounts written off in the last quarter, in accordance with the Financial Regulations of the Fund.
RESOLVED: to note the report. |
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Amendment to the Statement of Investment Principles 13:00
The Pension Fund is required by the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2009 to publish and keep under regular review a Statement of Investment Principles, which govern the investment of the Fund.
The report (PF19) recommends Committee to amend their Statement of Investment Principles to bring the overall Performance Target for the Fund into line with the decisions to appoint Wellington as an active global equity manager and to switch £100m of the Fund into a passive global equity mandate. The Committee is also recommended to extend the current arrangements whereby the limit on the proportion of the Fund invested in a single insurance contract has been increased from 25% to 35%. A revised Statement of Investment Principles, incorporating these changes, is attached at Annex 1.
The Committee is RECOMMENDED to approve the revised Statement of Investment Principles as set down at Annex 1 to the report.
Additional documents: Minutes: The Pension Fund is required by the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2009 to publish and keep under regular review a Statement of Investment Principles, which govern the investment of the Fund.
The Committee had before them a report (PF19) which recommended that they amend their Statement of Investment Principles to bring the overall Performance Target for the Fund into line with the decisions to appoint Wellington as an active global equity manager and to switch £100m of the Fund into a passive global equity mandate. They were also recommended to extend the current arrangements whereby the limit on the proportion of the Fund invested in a single insurance contract is increased from 25% to 35%. A revised Statement of Investment Principles, incorporating these changes was attached at Annex 1.
It was AGREED to APPROVE the revised Statement of Investment Principles as set down in Annex 1 to the report; with the addition of further amendments to cover the recent change in the Investment Regulations and the change in voting policy agreed at item 14 above, |
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Pension Fund Taxation Review 13:05
The report (PF20) will update the Committee on the latest position regarding tax reclaims, and, where appropriate, seek approval to join further legal actions to recover overpaid tax.
The Committee is RECOMMENDED to: (a) note the outcome of the review of taxation undertaken for the Pension Fund;
(b) delegate to the Service Manager (Pensions, Insurance & Money Management) following consultation with the Chairman, the decision as to whether to pursue withholding tax reclaims in any EU territories, following the completion of a detailed cost benefit analysis; and
(c) delegate to the Service Manager (Pensions, Insurance & Money Management) following consultation with the Chairman, the decision as to whether to pursue a tax reclaim for MODs, following the completion of a detailed cost benefit analysis.
Minutes: The Committee considered a report (PF20) which gave an update on the latest position regarding tax reclaims. The report also sought approval to join legal actions to recover overpaid tax.
RESOLVED: to
(a) note the outcome of the review of taxation undertaken for the Pension Fund;
(b) delegate to the Service Manager (Pensions, Insurance & Money Management), following consultation with the Chairman, the decision as to whether to pursue withholding tax reclaims in any EU territories, following the completion of a detailed cost benefit analysis; and
(c) delegate to the Service Manager (Pensions, Insurance & Money Management) following consultation with the Chairman, the decision as to whether to pursue a tax reclaim for Manufactured Overseas Dividends Claims (MODs), following the completion of a detailed cost benefit analysis.
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