Agenda and minutes
PDF 94 KBVenue: Council Chamber, County Hall, Penrhyn Road, Kingston upon Thames, Surrey, KT1 2DN
Contact: Amelia Christopher Email: amelia.christopher@surreycc.gov.uk
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
To receive any apologies for absence and to note substitutions. Minutes: Apologies were received from Tony Elias and Ruth Mitchell. |
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MINUTES OF THE PREVIOUS MEETING: 20 DECEMBER 2019
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 (9 March 2020). 2. The deadline for public questions is seven days before the meeting (6 March 2020). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Additional documents: Minutes: The Chairman noted that the Committee had received a large number of additional correspondences relating to the Fund’s investment in fossil fuels, which would be replied to in due course. He explained that the Fund’s position on the matter was outlined in the Committee’s response to the open letter (Annex B) and he also read out a short statement concerning investment decisions as it was of widespread interest:
All investment decisions are in accordance with the published fund Investment strategy. This is to protect the Fund’s interests and is in line with our fiduciary duty. This Committee makes the final decisions on any changes to the strategy following due process of consultation and discussion.
Surrey Pension Fund Committee members have received many representations through attendance at our meetings, email and other means of communications. Many of these relate to Environment, Social and Governance (ESG) matters and investments.
In response, the Committee, at the meeting of 20 December 2019, authorised a sub-group to review our Responsible Investment Policy and make recommendations to enhance the focus on ESG.
I can announce to the Committee and the public that this process has started and indeed the Strategic Finance Manager (Pensions) has spent much of this week moving this forward. Project planning and resource organisation are both well advanced.
The objective is to develop a holistic approach to all ESG considerations and develop robust guidelines that will guide our future investment choices. This Committee will consider all recommendations brought forward by the sub-group and determine which, if any to adopt.
Six questions were received from members of the public. The responses can be found attached to these minutes as Annex A.
Supplementary questions were asked from six members of the public and responses can be found below.
1. Supplementary question asked by Jenifer Condit: The Committee’s written responses to Chris Neill and Barry Staff’s submitted questions in December 2019 stated that divesting in the hydrocarbon industry in fossil fuel companies made no impact on the environment. She commented that continuing to invest in large oil and gas company shares lowered those companies’ cost of capital and therefore enabled them to obtain new investment to expand their business i.e. to exploit more oil reserves. She noted that all four of the actively managed equity pools Majedie, Marathon, Western and BCPP were assessed against indices which were not ‘low carbon’ or ‘sustainable’ in nature. She asked the Committee if they thought divesting still had no impact on the environment.
Response: The Chairman responded that the Pension Fund and Committee received informed views on how best to invest the Fund. He explained that the Fund were pursuing engagement as opposed to divestment which was outlined in the Committee’s response to the open letter. The Low Carbon Fund (Indexed Equity Funds) was only one aspect of its asset allocation to minimise risk and maximise returns. The Independent Advisor noted that divesting in large oil and gas companies would raise those companies’ cost of capital. He explained ... view the full minutes text for item 4/20 |
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The Committee is asked to review its Forward Plan. Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
RESOLVED:
The Committee noted the report.
Actions/further information to be provided:
None.
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PENSION FUND BUSINESS PLAN 2020/21
The 2020/21 Business Plan is the framework for the Fund to meet its strategic objectives, consistent with its Mission Statement. Additional documents: Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee approved the draft Business Plan in respect of the 2020/21 financial year.
Actions/further information to be provided:
None.
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In accordance with Fund’s governance objectives in the 2020/21 Business Plan.
Additional documents: Minutes: Witnesses:
Mr Nick Harrison - Chairman of the Local Pension Board Nick Weaver - Head of Pensions Administration Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
· discussed the Service Improvement Plan which was ambitious in its proposed timescales to deliver key projects. · noted the two challenging Internal Audit reviews and a further audit position statement was expected. · focused on the Key Performance Indicators (KPIs), concluding that it did not think the Pensions Administration team were making sufficient progress on the backlog. · that there were several changes to existing risks on the register and a new one was added concerning inaccurate KPI’s as a result of the lack of management control over the backlog - Risk A23. · acknowledged that the figures showed that routine work was being cleared in preference to critical work and asked for deaths, new pensions and transfers to be prioritised and completed in good time - JLT were successfully working through their tranche of the backlog.
RESOLVED:
That the Committee:
Actions/further information to be provided:
The Chairman of the Local Pension Board would work with officers to add a new risk to the Fund’s Risk Register concerning ... view the full minutes text for item 7/20 |
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REVISED PENSION ADMINISTRATION STRATEGY
In accordance with Fund’s governance objectives in the 2020/21 Business Plan.
Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions) Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee approved the final Administration Strategy.
Actions/further information to be provided:
None.
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COMPANY ENGAGEMENT AND VOTING
In accordance with Fund’s investment objectives in the 2020/21 Business Plan. Minutes: Witnesses:
Mamon Zaman - Senior Pensions Finance Specialist
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee:
Reaffirmed that ESG Factors were fundamental to the Fund’s approach, consistent with the Mission Statement through:
Actions/further information to be provided:
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In accordance with Fund’s funding objectives in the 2020/21 Business Plan. Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee:
Actions/further information to be provided:
None.
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2019 VALUATION UPDATE
In accordance with Fund’s funding objectives in the 2020/21 Business Plan.
Additional documents: Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee:
Actions/further information to be provided:
None.
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LGPS SCHEME ADVISORY BOARD (SAB) - CONSULTATION ON DRAFT RESPONSIBLE INVESTMENT GUIDANCE
In accordance with Fund’s investment objectives in the 2020/21 Business Plan. Additional documents: Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
RESOLVED:
The Committee noted the report and annexe.
Actions/further information to be provided:
None.
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INVESTMENT MANAGER ISSUES AND PERFORMANCE AND ASSET/LIABILITIES UPDATE
In accordance with Fund’s investment objectives in the 2020/21 Business Plan.
NB: Annexes 2 and 3 are contained within Item 15 as they contain Part 2 information.
Additional documents: Minutes: Witnesses:
Steve Turner - Investment Consultant (Mercer) Anthony Fletcher - Independent Advisor (MJ Hudson)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee:
Noted the main findings of the report: the Fund’s 3 year annualised performance return for the period ending 31 December 2019 was +6.2% against its target return of 6.6%. The funding level as at 31 December 2019 was 101.6%.
Actions/further information to be provided:
None.
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EXCLUSION OF THE PUBLIC
That under Section 100(A) 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 the relevant paragraphs of Part 3 of Schedule 12A of the Act. Minutes: RESOLVED:
That under Section 100(A) 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 the relevant paragraphs of Part 3 of Schedule 12A of the Act.
The meeting was adjourned at 11:29 am
It was reconvened at 11:36 am
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INVESTMENT MANAGER ISSUES AND PERFORMANCE AND ASSET/LIABILITIES UPDATE
In accordance with Fund’s investment objectives in the 2020/21 Business Plan.
NB: Annexes 2 and 3 are the Part 2 annexes to item 13.
Additional documents: Minutes: Witnesses:
Anthony Fletcher - Independent Advisor (MJ Hudson)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee noted the Part 2 Annexes 2 and 3.
Actions/further information to be provided:
None.
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CONSULTATION ON INDEX LINK GILTS
In accordance with Fund’s investment objectives in the 2020/21 Business Plan.
Additional documents: Minutes: Witnesses:
Steve Turner - Investment Consultant (Mercer) Neil Mason - Strategic Finance Manager (Pensions) Anthony Fletcher - Independent Advisor (MJ Hudson)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee agreed the recommendations outlined in the Part 2 report.
Actions/further information to be provided:
None.
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BORDER TO COAST UPDATE
In accordance with Fund’s investment objectives in the 2020/21 Business Plan. Additional documents: Minutes: Witnesses:
Neil Mason - Strategic Finance Manager (Pensions)
Key points raised in the discussion:
RESOLVED:
The Pension Fund Committee agreed the recommendations outlined in the Part 2 report.
Actions/further information to be provided:
None.
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PUBLICITY OF PART 2 ITEMS
To consider whether the item considered under Part 2 of the agenda should be made available to the Press and public. Minutes: The Committee agreed that no confidential information within items considered under Part 2 of the agenda should be made available to the Press and public.
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DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Committee will be on 12 June 2020. Minutes: It was agreed that the next meeting of the Surrey Pension Fund Committee would take place on 12 June 2020.
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