Agenda and minutes
PDF 263 KBVenue: Members Conference Room
Contact: Angela Guest email: angela.guest@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Minutes: Apologies were received from Alan Young and Bill Barker. |
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MINUTES OF THE PREVIOUS MEETING - 11 NOVEMBER 2016
To agree the minutes as a true record of the meeting. Minutes: The Minutes were approved as an accurate record of the previous meeting. |
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DECLARATIONS OF INTEREST
All Members present are required to declare, at this point in the meeting or as soon as possible thereafter (i) Any disclosable pecuniary interests and / or (ii) Other interests arising under the Code of Conduct in respect of any item(s) of business being considered at this meeting NOTES: · Members are reminded that they must not participate in any item where they have a disclosable pecuniary interest · As well as an interest of the Member, this includes any interest, of which the Member is aware, that relates to the Member’s spouse or civil partner (or any person with whom the Member is living as a spouse or civil partner) · Members with a significant personal interest may participate in the discussion and vote on that matter unless that interest could be reasonably regarded as prejudicial. Minutes: There were none. |
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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 (Monday 6 February). 2. The deadline for public questions is seven days before the meeting (Friday 3 February). 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. Minutes: Key points raised during the debate:
a) A5/16 – The Chairman reported back on a meeting she had had with Marcus Jones MP regarding pooling. There were several issues discussed regarding MIFID 2 but they would be for the pool to deal with. It was confirmed that Government could not mandate for infrastructure investment into specific things.
b) A6/16 – The investment strategy was an item on the agenda for review.
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PRESENTATION BY DARWIN PROPERTY INVESTMENT MANAGEMENT
Further to Minute 81/16, representatives from Darwin to make a presentation clarifying the investment opportunity and respond to questions and queries.
Minutes: Declarations of interest:
None
Witnesses:
Anthony Esse and James Penney both directors of Darwin Alternatives.
Key points raised during the discussion:
Further to Minute 81/16 when the committee discussed an investment opportunity for Darwin Property II, representatives were invited to give a presentation to the Committee.
Anthony Esse and James Penney both directors of Darwin Alternatives tabled a presentation and described the experience and expertise of the investment team as well as the performance data of Darwin Leisure Property Fund. They went on to describe the new investment opportunity including fund structure, potential acquisitions and fee structure.
Members of the committee asked detailed questions and received replies regarding the following topics: 1. refurbishment and renewal of new sites, 2. the rationale for using Gearing, 3. when returns would be realised, and 4. sustainability during economic downturn.
Resolved:
Members agreed that they were happy with the lock-in of 10 years and the levels of fees. The final committee decision regarding this investment is available under Minute 09/17 – Manager Issues and Investment Performance.
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ASSET POOLING: BORDER TO COAST PENSIONS POOL
This report makes the case for Surrey County Council to officially endorse the Border to Coast pool and create a Joint Committee and Shareholder Board for the purpose of delegating authority for the running of the pool to the Committee and the Board, and setting out the administrative issues that need to be considered.
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Phil Triggs, Strategic Manager Pension Fund & Treasury David John, Audit Performance Manager Sheila Little, Director of Finance
Key points raised during the discussion:
1. That this report would be going to Full Council in March if the committee agreed the recommendations. 2. It was confirmed that shareholder board members could be officer or member but the joint committee needed to be a member. Pools were able to employ their own advisors. 3. The relationship between the Pool Shareholder Board, Joint Committee and the Administering Authority was explained and discussed. 4. The use of A (voting share) and B shares (regulatory capital) and how this may change over time depending on regulatory changes. 5. It was explained that the private equity investments will remain with the council and the distributed cash will then go to the Pool. 6. There was some discussion about why Surrey was not entering the local regional pool and the Director of Finance would ensure that the report to Council would make the reasons clear why Border to Coast had been chosen. 7. The optimum level for a pooled fund was said to be between £20bn to £50bn. 8. The potential for academies being removed from the LGPS in the future and how this would change the fund completely.
Actions/ further information to be provided:
Members requested that the 4th bullet point of paragraph 9 of the main report be amended to include examples of ‘complex asset classes’.
Resolved:
The Committee supported the recommendations and resolved to recommend to Full Council to:
1. Approve the Border to Coast Pensions Partnership Limited (BCPP) as its pooling option to provide compliance with the legislation that mandates pooling.
2. Approve the acquisition by the Council, as Administering Authority of the Pension Fund, one share in the Border to Coast Pensions Partnership Limited and nominate the Chairman of the Surrey Pension Fund Committee (or Vice Chairman in their absence) to attend any meetings of the BCPP Shareholder Board on behalf of the Council.
5. To approve the revised Surrey Pension Fund Committee Terms of Reference functions as set out within the Constitution with the following addition: “Receive minutes and consider recommendations from and ensure the effective performance of the Joint Committee of the Border to Coast Pensions Pool and any other relevant bodies.”
Reasons for decision:
1. To comply with legislation.
2. To conform to best local authority pensions practice.
The Committee took a comfort break at 11.26am and reconvened ... view the full minutes text for item 7/17 |
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ACTUARIAL VALUATION 2016: OUTCOME
Report setting out the outcome of the triennial actuarial valuation in respect of the Surrey County Council Pension Fund.
Annex 1 – Actuarial Report – To Follow Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Barry McKay, Hymans Robertson Phil Triggs, Strategic Manager Pension Fund & Treasury
Key points raised during the discussion:
Actions/ further information to be provided:
None
Resolved:
To note the report and adopt the 2016 actuarial valuation.
Reason for decision:
A triennial actuarial valuation is a statutory requirement for the pension fund
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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 Surrey Pension Fund Committee, as well as manager investment performance.
(Annex 2 - To Follow)
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
John Harrison, Advisor Phil Triggs, Strategic Manager Pension Fund & Treasury
Key points raised during the discussion:
1. John Harrison presented the report to the committee. An updated annex 1, Asset Allocation Update, was tabled as were notes from meetings with fund managers. 2. Each of the fund managers were discussed regarding performance and issues arising. 3. The Strategic Manager Pension Fund & Treasury suggested asking Mercer to review the asset allocation and risks as there may be a risk of being overweight in equities. John Harrison explained that a strategic review would look at how the fund stood today and at what point to move or act. It would need to have trigger points for future consideration/action. 4. The Committee discussed the potential review of asset allocation and talked about the need for costings in a specification paper. 5. The Committee also discussed the potential investment opportunities with Darwin and Hg Capital. 6. There was some concern expressed with the Hg management fee of 1.75%. 7. Discussion was had regarding the potential for investment in Standard Life. It was explained that Standard Life focus on northern Europe and the US and on the secondary market. It was also explained that secondaries were opportunities that can come unexpectedly, so there was not the detail on where investment goes. 8. The Committee gave thanks for the work and support of Alex Moylan, Senior Accountant, who was leaving the Council. The Committee wished him well for the future.
Actions/ further information to be provided:
None.
Resolved:
Reason for decision:
In order to achieve best possible performance alongside optimal risk.
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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
Witnesses:
Jason Bailey, Pensions Lead Manager Nick Harrison, Chairman Local Pension Board
Key points raised during the discussion:
1. The Pensions Lead Manager introduced the report and said that there was a slight improvement on the last quarter but there was still some concern about initial contact with fund members. It was also reported that employer performance was not measured at present and ways were being explored on how to factor that in. 2. The Chairman of the Local Pension Board was invited to give his thoughts. He stated that customer service improvements were not going fast enough and that he would like to see a plan with data. 3. It was agreed to review the Administration Strategy in September 2017.
Actions/ further information to be provided:
That where five days meant five working days then this should be stated. To include Administration Strategy on the committee forward plan for September 2017.
Resolved:
The Committee noted the report and the Key Performance Indicator statement shown in annex 1 to the report.
Reason for decision:
To comply with best practice.
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PENSION FUND BUSINESS PLAN 2017/18
The 2001 Myners Report recommended that local authority pension funds should approve an annual business plan in respect of the objectives required for the ensuing year. Business planning is regarded as an important tool, assisting in the identification of how service delivery can be maximised within resource constraints.
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Phil Triggs, Strategic Manager Pension Fund & Treasury
Key points raised during the discussion:
1. The Commmitee considered the updated Pension Fund Business Plan 2017/18 as presented.
Actions/ further information to be provided:
None
Resolved:
To adopt the Pension Fund Business Plan 2017/18 as in annex 1 to the report.
Reason for decision:
A business plan is required by best practice in order to set relevant targets and monitor progress.
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INVESTMENT STRATEGY STATEMENT
The pension fund is required to publish an investment strategy statement (ISS) as a result of new investment regulations. It is a statutory requirement that the Pension Fund Committee should approve and regularly review its ISS.
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Phil Triggs, Strategic Manager Pension Fund & Treasury
Key points raised during the discussion:
Actions/ further information to be provided:
To request that the Local Pension Board review the ESG Policy and feed back its findings to the 2 June 2017 Pension Committee.
Resolved:
The new Investment Strategy Statement, as appended to the minutes, was approved.
Reason for decision:
The Pension Fund Committee must approve and review all working documents produced for the Pension Fund.
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GOVERNANCE COMPLIANCE STATEMENT
Local authority pension funds are required to publish and keep under review a Governance Compliance Statement. The Governance Compliance Statement of the Surrey Pension Fund is comprised from the Compliance to Statutory Guidance Statement and a Governance Policy Statement. Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Neil Mason, Senior Specialist Advisor
Key points raised during the discussion:
The Committee considered this report which reviewed the Governance Compliance Statement which is comprised of the Compliance to Statutory Guidance Statement and a Governance Policy Statement.
Actions/ further information to be provided:
None
Resolved:
1. The Pension Fund Committee noted the amendments to the Compliance to Statutory Guidance Statement attached as Annex 1 to the report.
2. The Pension Fund Committee noted the amendments to the Governance Policy Statement attached as Annex 2 to the report.
Reason for decision:
To comply with legislation and best practice.
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PENSION FUND RISK REGISTER
The Pension Fund Committee to assess the revised Risk Register in Annex 1, making any suggestions for amendment/additions as necessary.
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Phil Triggs, Strategic Manager Pension Fund & Treasury
Key points raised during the discussion:
1. The Strategic Manager Pension and Treasury introduced the risk register report highlighting that there was a new entry for cyber security which needed further work. The Committee were pleased that this new entry had been added.
Actions/ further information to be provided:
To invite Northern Trust and other experts to speak at a future committee meeting.
Resolved:
The revised Risk Register in Annex 1 to the report was noted.
Reason for decision:
A solid framework of risk management is required in order to manage the considerable risk environment surrounding the governance and investment of the pension fund.
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CORPORATE GOVERNANCE SHARE VOTING
This report provides a summary of the Fund’s share voting process in Q3 of 2016/17 (1 October 2016 to 31 December 2016).
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Phil Triggs, Strategic Manager Pension Fund & Treasury
Key points raised during the discussion:
1. The Strategic Manager Pensions and Treasury presented the report that provided a summary of the Fund’s share voting process in Q3 of 2016/17 (1 October 2016 to 31 December 2016).
Actions/ further information to be provided:
None.
Resolved:
1. To note the report.
2. The latest version of the Responsible Investment and Stewardship Policy was approved.
Reason for decision:
The Pension Fund Committee must be aware of the voting actions pertaining to the segregated portfolios of shares held within the pension fund. |
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The Pension Fund Committee’s forward plan is attached for information. Minutes: The forward plan was NOTED. |
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DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Committee will be on 2 June 2017. Minutes: The date of the meeting was NOTED. |