Agenda and minutes
PDF 56 KBVenue: G30, County Hall, Kingston upon Thames, Surrey KT1 2DN
Contact: Cheryl Hardman Email: cherylh@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Minutes: Ian Perkin and Sheila Little (Director of Finance) informed the Board that they would need to leave at lunchtime for other engagements.
A number of Members would be late due to heavy traffic. |
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MINUTES OF THE PREVIOUS MEETING: 19 September 2014
To agree the minutes as a true record of the meeting. Minutes: The Minutes were agreed as an accurate record of the meeting. |
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DECLARATIONS OF INTEREST
To receive any declarations of disclosable pecuniary interests from Members in respect of any item to be considered at the meeting.
Notes: · In line with the Relevant Authorities (Disclosable Pecuniary Interests) Regulations 2012, declarations may relate to the interest of the member, or the member’s spouse or civil partner, or a person with whom the member is living as husband or wife, or a person with whom the member is living as if they were civil partners and the member is aware they have the interest. · Members need only disclose interests not currently listed on the Register of Disclosable Pecuniary Interests. · Members must notify the Monitoring Officer of any interests disclosed at the meeting so they may be added to the Register. · Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest.
Minutes: There were no declarations of interest from the Board. John Harrison (Surrey Pension Fund Advisor) offered a standing declaration of his role at UBS. |
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QUESTIONS AND PETITIONS
To receive any questions or petitions.
Notes: 1. The deadline for Member’s questions is 12.00pm four working days before the meeting (10 November 2014). 2. The deadline for public questions is seven days before the meeting (7 November 2014). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Minutes: There were none. |
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An action tracker is attached, detailing actions from previous meetings. The Board is asked to review progress on the item listed. Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. In relation to A12/14 (training needs analysis), the Strategic Finance Manager – Pensions & Treasury informed the Board that there were still some outstanding questionnaires to be completed. The Board was reminded that the questionnaire needed to be completed even if they had filled in a previous version. A report would be brought to the February meeting.
Actions/Further information to be provided: None.
Resolved: That the action tracker was noted and the committee agreed to remove the completed actions from the tracker.
Next steps: None. |
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MANAGER ISSUES AND INVESTMENT PERFORMANCE
This report is a summary of all manager issues that need to be brought to the attention of the Pension Fund Board, as well as manager investment performance. Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Strategic Finance Manager – Pensions & Treasury introduced the report. 2. The Board was informed that the 2016 dates for the Board had been agreed and would be circulated separately (Action Review ref.: A26/14).
Judith Glover arrived at 9.44am.
3. The Strategic Finance Manager – Pensions & Treasury explained the necessity to reassess the data on which prices were agreed with Legal & General before reporting back to committee in February 2015. The Board supported the process.
John Orrick arrived and Phil Walker left the meeting at 9.48am.
4. Members asked for information on the profit achieved by Mirabaud on the investments made with them during the period of the contract. Officers agreed to calculate the sum and provide the Board with the information (Action Review ref.: A27/14). 5. Members queried whether the recent ruling by the Employment Appeal Tribunal would have any impact on the Pension Fund. The Director of Finance informed the Board that she had been looking at the issue from a Surrey County Council perspective but did not believe that there would be any significant impact on the Pension Fund. The Employers Representative stated that the Police and Crime Commissioner’s Office had concerns that the ruling would have a significant impact on the Police Service with a knock-on impact on the Pension Fund. 6. The Surrey Pension Fund Advisor introduced the notes of the meetings with Fund Managers on 7 November 2014.
Tim Evans arrived and Phil Walker rejoined the meeting at 9.56am.
7. The Board went on to discuss whether the accounting scandal and potential litigation at Tesco would have any impact on stocks.
Tony Elias arrived as 10.05am.
8. The Board discussed the differing views of investment managers on the potential for emerging markets. 9. The Strategic Finance Manager – Pensions & Treasury highlighted the private equity cash flow analysis as requested previously by Members.
EXCLUSION OF THE PUBLIC
RESOLVED: That under Section 100A of the Local Government Act 1972, the public be excluded from the meeting for the following items of business on the grounds that they involve the likely disclosure of exempt information under paragraph 3 of Part 1 of Schedule 12A of the Act.
PART TWO IN PRIVATE
THE FOLLOWING ITEMS OF BUSINESS WERE CONSIDERED IN PRIVATE BY THE COMMITTEE. HOWEVER, THE INFORMATION SET OUT BELOW IS NOT CONFIDENTIAL.
10. The Mercer representative presented an analysis of the Fund’s private equity portfolios and fund managers. Members asked a number of questions and these were answered by officers and the Fund’s advisors. It was suggested and agreed that the Board should meet with two private equity managers – one which takes a Fund of Funds approach and one which makes direct investments. This would help the Board to understand and compare the different investment approaches. It was agreed that Standard Life (incumbent manager) should be asked to present to discuss further the merits of a Fund of Funds approach. Further ... view the full minutes text for item 57/14 |
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REVISED STATEMENT OF INVESTMENT PRINCIPLES
With adjustments to asset allocation within the Pension Fund, it is necessary to approve a revised Statement of Investment Principles (SIP). Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Strategic Finance Manager – Pensions & Treasury introduced the report and outlined the revisions since the previous meeting.
Actions/Further information to be provided: None.
Resolved: That the revised Statement of Investment Principles be APPROVED.
Next steps: None.
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CORE BELIEF STATEMENT
The adoption of a core belief statement is regarded as good practice for the Pension Fund.
Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Strategic Finance Manager – Pensions & Treasury introduced the report. He clarified that the Core Belief Statement was not a statutorily required document but that it was best practice. He explained that those Boards which agree with all parts of the Core Belief Statement will operate effectively. Where there are disagreements, the Board is likely to be dysfunctional. 2. Members felt that the Statement would be useful for people joining the Board and should also be used as a check for decisions. 3. There was support for having a Core Belief Statement. 4. It was agreed that in paragraph 2.1 the word ‘present’ be added prior to ‘cash flow’. 5. It was agreed that either ‘The Fund believes’ be added to the start of each paragraph or removed from paragraph 4.3. 6. It was agreed that a further belief statement be added: ‘A well-balanced portfolio has an appropriate mix of passive and active investments’.
Actions/Further information to be provided: None.
Resolved: That the Core Belief Statement be APPROVED subject to the amendments listed above.
Next steps: None.
The Board adjourned for lunch at 1pm and reconvened at 2.05pm without Tony Elias. |
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This report outlines the possibility of procuring services surrounding US and non US Class Action monitoring and corporate litigation. Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Strategic Finance Manager – Pensions & Treasury introduced the report. 2. Members queried what would happen if both of the law firms that the Pension Fund is contracted with want to take action on the same cases. The Strategic Finance Manager – Pensions & Treasury informed the Board that a decision would be made on the merits of the case.
Actions/Further information to be provided: None.
Resolved: i. That the Surrey Pension Fund Board AGREES to the signing up for the US and non US class action monitoring and securities and corporate litigation services with Grant & Eisenhofer PA. ii. That decisions to instruct Grant & Eisenhofer PA (and the Fund’s existing firm of class action US attorneys) on any individual cases should be decided on their merits, taking into account all risks, with a decision made by the Director of Finance in consultation with the Pension Fund Board Chairman, Strategic Finance Manager and Director of Legal & Democratic Services.
Next steps: None.
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PENSION FUND RISK REGISTER
Surrey County Council, as administering authority for the Surrey Pension Fund, is responsible for the delivery of benefit promises made to members of the Surrey Pension Fund. It achieves this by setting objectives and goals with varying timeframes. Risks lie in failing to meet the intended goals.
Risks that are established as an issue must be identified and evaluated via a risk register. The risks must be prioritised with existing controls or new controls implemented to mitigate the risks. This should be recorded in a risk register, which needs monitoring on a quarterly basis. Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Strategic Finance Manager – Pensions & Treasury introduced the report.
Actions/Further information to be provided: None.
Resolved: That the revised Risk Register be NOTED.
Next steps: None.
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KEY PERFORMANCE INDICATORS
In line with best practice, Pension Fund Board members will be supplied with Pension Fund key performance indicators (KPIs) on a quarterly basis, covering investment and administration practices. Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Pensions Services Manager introduced the report and explained that recent staffing changes within the pensions administration team and the impact of the 2014 scheme changes had led to some recent short-term deterioration in performance.
Actions/Further information to be provided: None.
Resolved: That the Key Performance Indicators statement be NOTED.
Next steps: None.
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LOCAL GOVERNMENT PENSIONS SCHEME: DRAFT GOVERNANCE REGULATIONS
The report explains the planned changes to the governance of the Local Government Pension Scheme (LGPS) as a result of the Public Service Pensions Act 2013 and draft Regulations recently issued. A key requirement is for a proposed new local Pension Scrutiny Board to monitor compliance with rules and standards. Additional documents: Minutes: Declarations of Interest: None.
Key points raised during the discussion: 1. The Strategic Finance Manager – Pensions & Treasury introduced the report. A proposed structure for the Review Board would be brought to the February 2015 meeting of the Board.
Actions/Further information to be provided: None.
Resolved: i. That the report be NOTED. ii. That the draft response to the consultation from the Surrey Pension Fund Board be NOTED.
Next steps: None.
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DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Board will be on 13 February 2015.
The Surrey Pension Fund AGM will be on 21 November 2014. Minutes: The dates of the next meeting and the AGM were noted. |