Issue - meetings

This is a part 2 report.

Declarations of interest:

None

Witnesses:

Neil Mason, Head of Pensions

Daniel Booth, Chief Investment Officer, Border to Coast Pension Partnership

Steve Turner, Partner, Mercer

Sam Wreyford, Mercer

Anthony Fletcher, Independent Advisor

Key points raised during the discussion:

1. The Chief Investment Officer provided an overview of the Border to Coast Pension Partnership (BCPP) and the equity funds that will be available to the Surrey Pension Fund. 

2. There was a discussion around the plan for transitioning further funds to BCPP and the Committee were informed that the next available transition would take place in July or September and that further information regarding this would be presented at the June 2019 meeting of the Surrey Pension Fund Committee.

3. It was noted that at its meeting of 16 November 2018, the Committee had approved the delegation of authority to the Director of Finance, in consultation with the Chairman of the Pension Fund Committee, to transition the active global equity portion of the Surrey Pension Fund portfolio to the BCPP national pool when its design has been established to the satisfaction of officer and Fund Adviseros and assuming that the “necessary conditions” of governance have been satisfied and that the Committee had also approved (subject to meeting necessary conditions prior to launch) a 2019 commitment consistent with the Surrey Pension Fund target asset allocation to Private Equity within the BCPP Alternatives Investment proposition.  It was confirmed that any additional allocations would be undertaken in line with the Surrey Pension Fund’s local strategies.

4. Members of the Committee queried whether the pooling had derived any savings to date and were informed that it was too early to tell but that there had been savings in basis points and performance fees no longer had to be paid. It was noted that the pooling arrangement had also allowed access to more experienced areas of equity.

Actions/ further information to be provided:

None.

Resolved:

The Pension Fund Committee noted the pooling update report.

Purpose of the report: The Pension Fund Committee must be kept apprised of the progress made by the Officer Operations Group (OOG), Joint Committee and BCPP Shareholder Board in the drive to create a full functioning asset pool.

Declarations of interest:

None

Witnesses:

Neil Mason, Head of Pensions

John Harrison, Interim Chief Investment Officer, Border to Coast Pension Partnership

Steve Turner, Partner, Mercer

Key points raised during the discussion:

1. The Interim Chief Investment Officer informed the Committee that the main element of the report was to show that the process of due diligence had been carried out to ensure the necessary conditions of governance have been satisfied.

2. There was a discussion around transition costs to the BCPP UK Equity Alpha Fund and the Head of Pensions explained these costs would be recouped after 3 to 4 years and a full analysis of savings and costs would be undertaken once the Post Transition Report has been received.

3. It was highlighted that the transition of the Surrey Pension Fund UK equity to BCPP would take place cautiously to ensure the market does not set its prices against the Fund.

4. The Committee agreed to carry forward the recommendation to “approve the delegation of authority to the Director of Finance, in consultation with the Chairman of the Pension Fund Committee, to transition the active global equity portion of the Surrey Pension Fund portfolio to the BCPP national pool when its design has been established to the satisfaction of the officers and Fund advisors and assuming that the “necessary conditions” have been satisfied” to its meeting in February.

Tony Elias left the meeting @12.35pm

5. The Head of Pensions was asked by the Committee to replace ‘alternatives’ with ‘sleeves’ to ensure consistency in the report.

6. The Committee discussed the active global equity portion of the Surrey Pension Fund portfolio to the BCPP national pool and were advised by the Interim Chief Investment Officer that funds had the choice to transition their whole fund allocation into the pool to be managed fully by the BCPP or chose to remain in control.

Actions/ further information to be provided:

1. Officers to carry forward the recommendation to “approve the delegation of authority to the Director of Finance, in consultation with the Chairman of the Pension Fund Committee, to transition the active global equity portion of the Surrey Pension Fund portfolio to the BCPP national pool when its design has been established to the satisfaction of the officers and Fund advisors and assuming that the “necessary conditions” have been satisfied to the Committee’s meeting in February 2019.

Resolved:

The Pension Fund Committee,

a)    Noted that compliance with the “necessary conditions” of governance for the BCPP UK Alpha fund was met on 15 October 2018 and that the transition of the UK equity portion of the Surrey Pension Fund portfolio to the BCPP has commenced.

b)    Approved in principle, the transition of the active global equity portion of the Surrey Pension Fund portfolio to the BCPP national pool when its design has been established to the satisfaction of officers and Fund advisors and assuming that the “necessary conditions” of governance have been satisfied.

c)    Approved (subject to meeting “necessary conditions” prior to launch) a 2019 commitment consistent with the Surrey  ...  view the full minutes text for item 74