Issue - meetings

Purpose of report:This report is a summary of all manager issues that need to be brought to the attention of the Pension Fund Committee, as well as an update on investment performance and the values of assets and liabilities.

Declarations of interest:

None

Witnesses:

Neil Mason, Head of Pensions

Steve Turner, Partner, Mercer

Sam Wreyford, Mercer

Anthony Fletcher, Independent Advisor

Key points raised during the discussion:

1. The Committee were pleased to note that the equity protection policy was working exactly as expected. It was also noted that quarter four had been the worst in ten years however the markets had now rebounded. Members queried how well the investments had recovered since quarter four and the longer term impact of this and were informed that some headway had been made against any losses.

2. The Committee queried what impact Brexit would have on the Fund’s investments and were informed that there were no concerns from an asset perspective.

3. It was noted that the Fund’s Investment consultant Mercer, felt that the Surrey Pension Fund was in a good position and the Independent Advisor reflected that the markets may not be stable however it should not be as volatile as in quarter four.   

Actions/ further information to be provided:

None.

Resolved:

That the funding level as at 31 December 2018 was 93.3%. That the Fund’s investment performance for the quarter ending 31 December 2018 was -3.4%.

Purpose of the report: This report is a summary of all manager issues that need to be brought to the attention of the Pension Fund Committee, as well as an update on investment performance and the values of assets and liabilities.

Declarations of interest:

None

Witnesses:

Neil Mason, Head of Pensions

Steve Turner, Partner, Mercer

Sam Wreyford, Mercer

Anthony Flectcher, Independent Advisor

Key points raised during the discussion:

1. The Committee noted the three stages of the equity transitions based on the 30 September valuations.

2. It was highlighted that the overall target allocation of LGIM remained the same, therefore there was no need for transfers between managers for Phase 1.

3. It was noted that phase 2 would be relatively simple. The Fund’s Investment consultant Mercer, recommended that the entire holding in UBS be transferred to the new fund as it would be one of the underlying managers for the BCPP.

4. The Committee were informed that the final stage of the transfer would involve transitioning the remaining active equities to BCPP and this would bring the Fund into line with the target geographic spilt agreed by the Committee.

5. The Committee discussed the following managers in turn:

·         Marathon was the largest global equity manager and was now operating under a new strategy. The Committee agreed it would useful to view the results per the new strategy to monitor the effectiveness.

·         Majedie would no longer be a manager for the Surrey Pension Fund due to its transition to the BCPP.

·         Newton had previously struggled however showed improvement in the last 12 months. Despite improvement were under review until confidence was restored.

6.   It was highlighted that Surrey Pension Fund gross returns compared to other funds were higher due to its equity allocation and protection was in place ahead of the valuation next year.

Actions/ further information to be provided:

None

Resolved:

The Pension Committee noted the main findings of the report; the funding level of the Fund remained at 97.5% while the Fund’s investment performance for the quarter ending 30 September 2018 was +1%.