Agenda and minutes
PDF 175 KBVenue: Ashcombe Suite, County Hall, Kingston upon Thames, Surrey KT1 2DN. View directions
Contact: Cheryl Hardman Email: cherylh@surreycc.gov.uk
| No. | Item |
|---|---|
|
APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Minutes: Apologies for absence were received from Phil Walker and Hazel Watson. |
|
|
MINUTES OF THE PREVIOUS MEETING: 18 September 2015
To agree the minutes as a true record of the meeting.
Minutes: The Surrey Pension Fund Advisor suggested that run-off of private equity would go on for 10-15 years rather than 20-30 years.
The Minutes were approved as an accurate record of the meeting. |
|
|
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 disclosable pecuniary interest. |
|
|
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 (9 November 2015). 2. The deadline for public questions is seven days before the meeting (6 November 2015). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Minutes: A question was received from local resident, Steve McDonald. The question and response was tabled and is attached to the Minutes as Annex 1.
Mr McDonald asked a supplementary question related to his first question. He highlighted the contribution of burning fossil fuels on the earth’s climate and the level of investment by the Local Government Pension Scheme in fossil fuels. He suggested that such investments did not fit with local government’s social and environmental principles and asked that the Surrey Pension Fund Committee stop further investment in fossil fuels while starting disinvestment from fossil fuel companies.
The Chairman responded by highlighting the committee’s annual review of its Responsible Investment and Stewardship Policy. She informed the meeting that the Surrey Pension Fund was a member of Local Authority Pension Fund Forum which gives local authority pension funds a collective voice and clout to negotiate and engage with companies. She noted that Shell had recently pulled out of drilling in the Arctic and suggested that this was partly due to the influence of the Forum. She asked, if the Surrey Pension Fund was to disinvest, where it should draw the line eg should transport and retail companies also be avoided. Also, if the Fund disinvests it no longer has the ability to influence or negotiate with those companies. Finally, the Chairman pointed out the Surrey Pension Fund Committee’s fiduciary duty to the Fund’s members. |
|
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 A5/15 (assessment one to ones), the Chairman reported that she had now met with the most recent members of the committee to discuss their assessment results. 2. In relation to A12/15 (pooling options), the Strategic Finance Manager (Pension Fund & Treasury) informed the committee that the consultation document had not yet been published but that a full report would be brought to committee in February 2016. 3. In relation to A14/15 (cash flow), the Strategic Finance Manager (Pension Fund & Treasury) stated that this was dealt with under item 6 Manager Issues and Investment Performance. 4. In relation to A15/15 (investment consultants), this would be arranged in the new year.
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. |
|
|
MANAGER ISSUES AND INVESTMENT PERFORMANCE
This report is a summary of all manager issues that need to be brought to the attention of the Surrey Pension Fund Committee, as well as manager investment performance.
Additional documents: Minutes: Declarations of interest: None
Key points raised during the discussion: 1. The Strategic Finance Manager (Pension Fund & Treasury) introduced the report, tabling the notes from the external fund manager meetings on 9 November 2015 (attached as Annex 2 to the minutes). 2. The Senior Advisor (Pension Fund) gave a verbal summary of the meeting of the Local Pension Board on 12 October 2015. 3. In response to a question about whether there is a limit to the amount of stock lending that is allowed, the Strategic Finance Manager (Pension Fund & Treasury) confirmed that there was a limit. 4. A member of the committee enquired whether the second paragraph on Internally Managed Cash (p19) would be accurate in the long term. The Strategic Finance Manager (Pension Fund & Treasury) confirmed that the Fund would be cash positive for the next few years as it generates more cash than it pays out in benefits. 5. The Surrey Pension Fund Advisor suggested that the real yield trigger be treated as commercially sensitive in future. It was agreed that officers would consider how to take this forward (Action Review A16/15). 6. The committee discussed the impact of the second Markets in Financial Instruments Directive which will reclassify all local authorities as retail clients. The Chairman confirmed that the Shadow Advisor Board was against this reclassification. Members felt it important to convey to the Financial Conduct Authority the huge administrative burden and additional cost for financial services firms and local authority pension funds. The Chairman agreed that the cost should be addressed but did not feel that too much time should be spent calculating that cost at the present time. 7. Members queried why KPMG had been appointed to look at the separation of the Pension Fund from the Host Authority. The Surrey Pension Fund Advisor explained that KPMG had been getting involved in governance related activity. The Director of Finance also highlighted KPMG’s experience in auditing. 8. The Strategic Finance Manager (Pension Fund & Treasury) gave an update on national asset pooling and Surrey’s activities. He confirmed that positive progress had been made with Cumbria and East Riding. Talks were ongoing with six other local authorities and talks with three others were in the pipeline. While the Funds were geographically distant to Surrey, they have good governance records and good relationships could be developed. A full paper and draft proposal would be brought to the committee in February 2016. Members agreed that regular private updates would be welcomed (Action Review A17/15). The Chairman asked the committee for its opinions on taking on a small poorly governed Fund to help it improve and pointed out that this would not have a huge impact on overall returns. This was generally approved of and it was felt that more than one small Fund could be supported in this way. There was concern that pooling could lead to big philosophical shifts for some Funds as different Funds take different investment approaches eg some manage investments predominantly inhouse while ... view the full minutes text for item 71/15 |
|
|
KEY PERFORMANCE INDICATORS AND ADMINISTRATION UPDATE
In line with best practice, Surrey Pension Fund Committee members will be supplied with Pension Fund key performance indicators (KPIs) on a quarterly basis, covering investment and administration practices. This paper also includes an update on administration issues
Additional documents: Minutes: Declarations of interest: None
Key points raised during the discussion: 1. The Senior Advisor (Pension Fund) introduced the report and highlighted deterioration across a number of administration areas. Discussions were being held with the team to check progress with actions planned to address the problems and timescales. The Service Level Agreement with Orbis was also being reviewed. The Chairman requested that someone from Pensions Administration attend committee meetings in future.
Actions/further information to be provided: None.
Resolved: That the report was NOTED.
|
|
|
SCHEME ADVISORY BOARD BENCHMARKING EXERCISE
The Surrey Pension Fund Committee members are provided with the response of the Fund to the request of the Scheme Advisory Board (SAB) to complete a self-assessment benchmarking return.
Additional documents: Minutes: Declarations of interest: None
Key points raised during the discussion: 1. The Senior Advisor (Pension Fund) introduced the report and suggested that the KPIs were a useful tool to assess Funds across the Local Government Pension Scheme.
Actions/further information to be provided: None.
Resolved: That the report was NOTED.
|
|
|
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 should be monitored on a quarterly basis. Additional documents: Minutes: Declarations of interest: None
Key points raised during the discussion: 1. The Strategic Finance Manager (Pension Fund & Treasury) tabled an updated Risk Register (attached as Annex 3 to the Minutes). He highlighted a new entry at number 18 ‘Failure to hold personal data securely’. This had been added following a recent Audit report of Pensions Administration which suggested this be treated as a separate risk.
Actions/further information to be provided: None.
Resolved: That the report was NOTED.
|
|
|
DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Board will be on 12 February 2015. Minutes: The date of the next meetings was NOTED and the Chairman reminded members of the committee of the AGM on 21 November 2016. |