Agenda, decisions and minutes

Cllr John Sanders attended for Cllr Nick Hards, Cllr Les Sibley attended for Cllr Lynda Atkins and an apology was received from Cllr Hywel Davies.

The Chairman took this opportunity to thank outgoing District Councillor Hywel Davies and Paul Gerrish for all their work on the Committee over the past years.

Councillors Fooks, Lilly, Sibley, District Councillor Patterson and Paul Gerrish each 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 5 December 2014 (PF3) and to receive information arising from them.

The Minutes of the Meeting held on 5 December 2014 were approved and signed subject to the correction of the word ‘returns’ for ‘reserves; in sentence 3, Minute 72/14 ‘Petitions and Public Address’.

There were no Matters Arising.

There were no requests to submit a petition or to make an address.

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 31 December 2014 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 3 - Baillie Gifford

Graph 4 – Wellington

Graphs 7 and 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 and 10 on the agenda.

The Independent Financial Adviser reviewed the investment activity during the past quarter and presented an overview of the Fund’s position as at 31 December 2014.

Mr Davies noted that the overall value of the Fund had risen by approximately £60million over the last quarter.

RESOLVED: 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 and 10 on the agenda.

.

The Committee is RECOMMENDED that the public be excluded for the duration of items 7, 8, 9, 10, 11, 12, 13 and 14 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 8 and 9, there are no reports circulated with the Agenda. Any exempt information will be reported orally.

The Committee RESOLVED that the public be excluded for the duration of items 7, 8, 9, 10, 11, 12, 13 and 14 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 the circumstances of each case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

The Committee considered a report of the Independent Financial Adviser (PF7) which gave an overview of the current and future investment scene and market developments across various regions and sectors. The report itself did not contain exempt information and was available to the public.

The public was 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 to bear the Independent Financial Adviser’s conclusions in mind when considering the Fund Managers’ reports.

10:35

(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 (Anthony Dickson 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 31 December 2014;

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

In support of the above is their report for the period to 31 December 2014.

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 Independent Financial Adviser reported orally on the performance and strategy of Baillie Gifford drawing on the tables at Agenda Items 5 and 7.

The representatives, Anthony Dickson and Iain 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 31 December 2014. They also gave their views on the future investment scene.

At the end of the presentation they responded to questions from 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, 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 presentation and to take any necessary action, if required.

11:05

(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 (Nicola Staunton and Luke Stellini) 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 2014;

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

In support of the above is their report for the period to 31 December 2014.

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 independent Financial Adviser reported orally on the performance and strategy of Wellington drawing on the tables at Agenda Items 5 and 7.

The representatives, Nicola Staunton and Luke Stellini 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 31 December 2014. They also gave their views on the future investment scene.

At the end of the presentation they responded to questions from 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, 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 presentation and to take any necessary action, if required.

11:35

The Independent Financial Adviser will report (PF10) on the officer meetings with UBS and Legal and General, as well as update the Committee on any other issues relating to the Fund Managers not present , including issues in respect of the Private Equity portfolio.

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 reported on the main issues arising from the officer meetings with UBS and Legal & General in conjunction with information contained in the tables (Agenda Item 5). He also updated the Committee on other issues relating to the Fund Managers not present.

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.

11:40

The Independent Financial Adviser will, if necessary, summarise any issues arising from 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 Independent Financial Adviser reported that no summary was required.

11:45

This item includes a detailed employer risk report prepared by Barnett Waddington, the Fund’s Actuary (PF12). The report sets out information on deficit levels, and financial risks to the Fund, and looks at key ways of reducing levels of risk going forward.

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 reveal financial and other information of scheme employers.

The Committee is RECOMMENDED to:

a)   confirm that a total risk score of 60% or more is the standard indicator to be used;

b)   agree that officers should review and contact scheme employer identified in the report and, report back to the Committee on a regular basis;

c)   confirm that this report should be submitted to Committee on an annual basis, unless external factors change the risk profiles; and

d)   consider and incorporate any changes in next review of the Funding Strategy Statement

Following the closure of several of the smaller admitted bodies in the Oxfordshire Pension Fund and mixed results in terms of whether any monies, assessed at closure valuation could be recouped; the Committee asked officers to undertake a review of the financial status of scheme employers and the impact on the Fund if they ceased to be scheme employers. The Fund’s Actuary, Barnett Waddington, had been commissioned to produce the report which was attached at Annex 1 to the report PF12. The report set out information on deficit levels, and financial risks to the Fund, and looked at key ways of reducing levels of risk going forward.

Annemarie Allen from Barnett Waddington was invited to join the Committee for this item following her training session on the management of employer risk given prior to the 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 reveal financial and other information of scheme employers.

RESOLVED:

(a)   that a total risk score of 60% or more is the standard indicator to be used;

(b)  (amendment proposed by Cllr  Langridge, seconded by Cllr Greene and carried nem con) that officers should review and contact scheme employers identified in the report and report back to Committee as information becomes available, but on a regular basis;

(c)  a report be submitted to Committee on an annual basis, unless external factors change the risk profiles; and

(d)  incorporate any necessary changes in the next review of the Funding Strategy Statement.

12:10

The report (PF13) reviews the work undertaken by the Independent Financial Adviser over the past 12 months, and invites the Committee to agree any feedback on the levels of service received and/or changes going forward.

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 note the report and to consider if it wishes to offer any feedback to Mr Davis in relation to his performance as Independent Financial Adviser during the last year.

(Mr Davies left the room for the duration of this item).

The Committee had before them a report (PF13) which reviewed the activities and performance over the last year of the Independent Financial Adviser, Peter Davies and which asked members to agree any feedback on the levels of service received and/or changes going forward.

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.

RESOLVED: to note the report and that Mr Davies be thanked for his clear and thorough advice which is imparted in ‘user friendly’ terms to accord with his audience.

12:20

To report a recent decision made by the Chief Finance Officer under delegated powers in respect of a request for the release of deferred benefits where the previous employer was no longer in existence (PF14).

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 note the report.

The Committee had before them, for information, a report (PF14) on a recent decision made by the Chief Finance Officer under delegated powers in respect of a request for the release of deferred benefits where the previous employer was no longer in existence.

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.

RESOLVED: to note the report.

ITEMS FOLLOWING THE READMISSION OF THE PRESS AND PUBLIC

12:25

The report (PF15) sets out the Pension Fund annual business plan for the 2015/16 financial year which includes the key objectives of the Fund, the service priorities for the coming year, a budget for 2015/16 and the latest risk register for the service.

The Committee is RECOMMENDED to:

(a) approve the Business Plan and Budget for 2015/16 as set out at Annex 1;

(b) approve the Pension Fund Cash Management Strategy for 2015/16 as set out at Annex 2;

(c)  delegate authority to the 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 Chief Finance Officer to open separate pension fund bank, deposit and investment accounts as appropriate; and

(e)  delegate authority to the Chief Finance Officer to borrow money for the pension fund in accordance with the regulations.

The Committee considered the Pension Fund Annual Business Plan for the 2015/16 financial year (PF15). As well as the Business Plan it included the key objectives of the Fund, the service priorities for the coming year, a budget for 2015/16 and the latest risk register for the service.

RESOLVED: to

(a)  approve the Business Plan and Budget for 2015/16 as set out at Annex 1;

(b)  approve the Pension Fund Cash Management Strategy for 2015/16 as set out at Annex 2;

(c)  delegate authority to the Chief Finance Officer to make the 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 Chief Finance Officer to open separate pension fund bank, deposit and investment accounts as appropriate; and

(e)  delegate authority to the Chief Finance Officer to borrow money for the pension fund in accordance with the regulations.

12:35

The Public Service Pension Act 2013 require Pension Boards to be established for all public service pension schemes. The reports at PF16 detail the recommendation for the establishment of a local Pension Board for the Oxfordshire Local Government Pension Scheme and for all of the Firefighter Pension Schemes. It also asks the Committee to agree the Constitution for the Oxfordshire Local Government Pension Scheme Board (PF16).

The amendment to the regulations require the Pension Boards to be established by the 1 April 2015 with training being delivered by the Local Government Association in May and June 2015 for Pension Board members.

The reports detail the background to the legislation and the proposals for the governance and structure of the Oxfordshire Firefighters Pension Board.

With regard to the Oxfordshire Local Government Pension Scheme, the Pension Fund Committee is RECOMMENDED to:

(a)       discuss the draft constitution as presented as Annex 1 to this report and in particular the points highlighted in paragraph 6 above, and

(b)      agree the Constitution of the Oxfordshire LGPS Local Pension Board as presented in Annex 1, with any changes identified under (a) above.

With regard to the Oxfordshire Firefighters Pension Board, the Pension Fund Committee is RECOMMENDED to:

(a)       delegate the authority to the Chief Fire Officer to make decisions on the everyday administration of the Scheme;

(b)       agree the proposed format of the Firefighters

           Pension Board; and

(c)          agree the delegation for the sign-off for the terms of reference to the Chairman of the Pension Fund Committee.

The Public Service Pension Act 2013 required Pension Boards to be established for all public service pension schemes. An amendment to the regulations required the Pension Boards to be established by 1 April 2015 with training being delivered by the Local Government Association in May and June 2015 for Pension Board members.

The Committee considered two reports at PF16 the first of which set out a recommendation for the establishment of a Local Pension Board for the Oxfordshire Local Government Pension Scheme and also asking approval of a draft Constitution.

Simon Furlong, Assistant Fire Officer, introduced the second report which set out, for approval, the format of the Firefighters Pension Board (the regulations for which had only just been laid down by Government). He agreed to come along to a future meeting and deliver training to members prior to the start of the meeting on the differences between the two schemes.

RESOLVED: to

(a)  note the reports;

(b)  approve the Constitution of the Oxfordshire Local Government Pension Board as presented at Annex 1 and agree that the Board be established with effect from 1 April 2015;

(c)  in respect of the Firefighters Local Pension Scheme , to delegate the authority to the Chief Fire Officer to make decisions on the everyday administration of the Scheme; 

(d)  (as amended and agreed nem con) approve the format of the Firefighters Pension Board with the amendment that the three employer representatives be appointed following a similar process as identified in the Constitution for the Oxfordshire Local Government Pension Board ; and

(e)  agree that the sign-off for the terms of reference of the Firefighters pension Board be delegated to the Chairman of the Oxfordshire Pension Fund Committee.

12:50

The report (PF17) seeks Committee approval for any new admissions to the Fund as well as update the Committee on the status of any current employer which impacts on future scheme membership.

The Committee is RECOMMENDED to:

a)     note the position regarding previous applications;

b)     approve the application from UBICO providing that either a pass through arrangement, or a bond is put in place;

c)     approve the write off in respect of  AAA NORCAP; and

d)     note the position regarding closure of scheme employers

The Committee considered a report (PF17) which sought approval for any new admissions to the Fund and which gave an update on the status of any current employer which impacted on future scheme membership.

RESOLVED: to

(a)  note the position regarding previous applications;

(b)  approve the application from UBICO providing that either a pass through arrangement, or a bond is put in place;

(c)  approve the write off in respect of AAA NORCAP; and

(d)  note the position regarding closure of scheme employers.

12:55

The report (PF18) provides information on voting records of the fund managers in circumstances when they have voted on behalf of the Pension Fund.

The Committee is RECOMMENDED to note the Fund’s voting activities.

The Committee had before them a report (PF18) which provided information on the voting records of the fund managers in circumstances when they have voted on behalf of the Pension Fund.

RESOLVED: to note the Fund’s voting activities.

13:00

The Committee is asked to agree variations to the Scheme of Delegation to reflect recent organisational changes within the Council (PF19).

The Committee is RECOMMENDED to:

a)     note the report; and

b)     approve amendments to the Scheme of Delegation as shown at Annex 1.

The Committee were asked to agree variations to the Scheme of Delegation to reflect recent organisational changes within the Council (PF19).

RESOLVED: to

(a)  note the report; and

(b)  approve the amendments to the Scheme of Delegation as shown at Annex 1.

13:10

The report (PF20) provides the Committee with summary details of the amounts written off in the last quarter in accordance with Financial Regulations of the Fund.

The Committee is RECOMMENDED to note the report.

The Committee had before them summary details of the amounts written off in the last quarter in accordance with Financial Regulations of the Fund (PF20).

RESOLVED: to note the report.

13:15

This item covers any issues concerning Corporate Governance and Socially Responsible Investment which need to be brought to the attention of the Committee.

At the last meeting the Committee asked that UBS prepare a report following the presentation by Professor Allport on di-vesting in fossil fuels. This is attached at PF21

The Committee is asked to note the report from UBS.

The item covers any issues concerning Corporate Governance and Socially Responsible Investment which need to be brought to the attention of the Committee.

At the last meeting the Committee asked that UBS prepare a report following the presentation by Professor Allport on divesting in fossil fuels. This was presented at PF21.

RESOLVED: to note the report.