Agenda and minutes
Venue: Conference room 1, County Hall, Kingston upon Thames, Surrey KT1 2DN
Contact: Sharmina Ullah Email: sharmina.ullah@surreycc.gov.uk
No. | Item |
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Minutes: Apologies were received from Ayesha Azad. |
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MINUTES OF THE PREVIOUS MEETING [14 SEPTEMBER 2018] PDF 94 KB
To agree the minutes as a true record of the meeting. Additional documents: Minutes: It was noted that Philip Walker and Margaret Janes were present at the last meeting on 14 September 2018.
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 (Friday 9 November 2018). 2. The deadline for public questions is seven days before the meeting (Thursday 8 November 2018). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Minutes: 1. The Committee received three public questions from members of the public and responses were tabled at the meeting (attached as Annex 1).
2. Supplementary questions were submitted and it was noted that a response would be provided in writing after the meeting.
Meeting was adjourned at 09.50am due to disruptive behaviour |
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PENSION FUND COMMITTEE FORWARD PLAN PDF 63 KB
Purpose of the report: The Committee to review its forward work programme. Minutes:
Meeting resumed at 10.20am
Resolved:
The Committee reviewed its Forward Plan.
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Purpose of the report: This report is a summary of administration and governance issues reviewed by the Local Pension Board at its meeting of 23 October 2018 that need to be brought to the attention of the Pension Fund Committee. Minutes: Declarations of interest:
None
Witnesses:
Nick Harrison, Chairman, Local Pension Board Michael Mann, Pensions Lead Manager
Key points raised during the discussion:
Actions/ further information to be provided:
The Pension Lead Manager to provide more information on non-compliance statistics with annual benefit statements.
The Pension Lead Manager to clarify whether GMP exercise includes transfer members.
Resolved:
The Pension Fund Committee;
a) Approved the recommendations from the Local Pension Board.
b) Concluded there was no reviews as to the compliance of particular cases, projects or processes that the Local Pension Fund Board should undertake.
c) Endorsed requesting a legal opinion on the ramifications of recovering overpaid guaranteed minimum pensions (GMPs).
Approved the addition of a risk for interim / replacement Section 151 Officer, with a moderate risk score of 8 (due to the number of experienced supporting officers in the Finance Management Team). |
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CORPORATE GOVERNANCE SHARE VOTING PDF 93 KB
Purpose of the report: This report provides a summary of the Fund’s share voting process in Q2 of 2018/19 (1 July 2018 to 30 September 2018).
Additional documents: Minutes: Declarations of interest:
None
Witnesses:
Ayaz Malik, Pensions Accountant Advisor
Key points raised during the discussion:
Actions/ further information to be provided:
The Board to receive further information on the impact of share voting from Manifest.
Resolved:
The Pension Fund Committee noted the report.
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COST EFFECTIVE MEASUREMENT BENCHMARKING REVIEW PDF 122 KB
Purpose of the report: The Pension Fund Committee must approve and review all working documents produced for the Pension Fund.
Minutes: Declarations of interest:
None
Witnesses:
Mamon Zaman, Senior Accountant
Key points raised during the discussion:
David Mansfield left the meeting at 11am
Actions/ further information to be provided:
None
Resolved:
The Pension Fund Committee noted the main findings of the report; the Fund’s Net Value added, as a result of its investment strategy and active management decisions, was higher than other LGPS Funds by +0.1%. The Fund’s overall investment costs in 2017/18 were lower than the peer benchmark by approximately -£1m. The Fund also made cumulative savings in investment costs from 2013/14 to 2017/18, of approximately -£1.4m. |
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Purpose of the report: A cash-flow analysis allows the Fund to ascertain a projection as to when benefit payments may exceed income. This information can influence both the investment and funding strategy.
Minutes: Declarations of interest:
None
Witnesses:
Ayaz Malik, Pension Accountant Advisor Neil Mason, Head of Pensions
Key points raised during the discussion:
Actions/ further information to be provided:
The Committee to receive revised figures for the statistics provided by the Pensions Administration team on current membership trends.
Resolved:
The Pension Fund Committee noted the cash-flow position for quarters one and two.
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INVESTMENT STRATEGY STATEMENT PDF 94 KB
Purpose of the report: 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.
Minutes: Declarations of interest:
None
Witnesses:
Neil Mason, Head of Pensions
Key points raised during the discussion:
· The changes in asset allocation and regional weighting approved by the Pension Fund Committee through the equity review; · The change in allocation from investment grade bonds to multi-asset credit, · The inclusion of a statement to allow the automatic use of cash-flows to rebalance the portfolio back to the target asset allocation. · Changes in the Private Equity Manager list on, due to reaching the end of their fund life, the following funds had been removed; HG Capital MUST 3, HG Capital MUST 4, ISIS II and ISIS III. · ISIS IV had been renamed Livingbridge 4 LP and ISIS Growth Fund had been renamed Livingbridge Enterprse 1LP.
Actions/ further information to be provided:
None
Resolved: The Pension Fund Committee approved the changes to the Investment Strategy Statement.
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EXCLUSION OF THE PUBLIC
Recommendation: 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 1 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 1 of Schedule 12A of the Act.
PART TWO – IN PRIVATE |
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INVESTMENT MANAGER ISSUES AND PERFORMANCE ASSET/LIABILITIES UPDATE Purpose of the report: This report is a summary of all manager issues that need to be brought to the attention of the Pension Fund Committee, as well as an update on investment performance and the values of assets and liabilities.
Minutes: Declarations of interest:
None
Witnesses:
Neil Mason, Head of Pensions Steve Turner, Partner, Mercer Sam Wreyford, Mercer Anthony Flectcher, Independent Advisor
Key points raised during the discussion:
· Marathon was the largest global equity manager and was now operating under a new strategy. The Committee agreed it would useful to view the results per the new strategy to monitor the effectiveness. · Majedie would no longer be a manager for the Surrey Pension Fund due to its transition to the BCPP. · Newton had previously struggled however showed improvement in the last 12 months. Despite improvement were under review until confidence was restored.
6. It was highlighted that Surrey Pension Fund gross returns compared to other funds were higher due to its equity allocation and protection was in place ahead of the valuation next year.
Actions/ further information to be provided:
None
Resolved:
The Pension Committee noted the main findings of the report; the funding level of the Fund remained at 97.5% while the Fund’s investment performance for the quarter ending 30 September 2018 was +1%. |
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MULTIPLE EMPLOYER INVESTMENT STRATEGIES
Purpose of the report: This paper informs the Committee of the analysis required to ascertain if tailored investment strategies are appropriate for the Surrey Fund.
Minutes: Declarations of interest:
None
Witnesses:
Neil Mason, Head of Pensions
Key points raised during the discussion:
Actions/ further information to be provided:
None
Resolved:
The Committee approved for officers and the Fund actuary to undertake the initial work (stage 1 and 2) at a cost of £11,500, to ascertain the appropriateness of tailored strategies for the Surrey Fund.
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BORDER TO COAST PENSIONS PARTNERSHIP: POOLING UPDATE 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.
Minutes: 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:
Tony Elias left the meeting @12.35pm
Actions/ further information to be provided:
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 74/18 |
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INFRASTRUCTURE MANAGER SELECTION Purpose of the report: At its meeting of 14 September 2018, the Pension Fund Committee approved the recommendation of the Fund’s investment consultant, Mercer, to invest a further £30-40m in new private equity fund with its defined characteristics.
The Committee further authorised officers to work with Mercer and the independent advisor to research the market for appropriate private equity providers with these defined characteristics and bring a further recommendation to the pension fund committee.
This paper provides a recommendation for the selection of an Infrastructure manager which most closely meets the defined characteristics.
Minutes: Declarations of interest:
None
Witnesses:
Neil Mason, Head of Pensions Steve Turner, Partner, Mercer Sam Wreyford, Mercer
Key points raised during the discussion:
Actions/ further information to be provided:
None
Resolved:
The Committee agreed to commit £40m to the Glenmont – Clean Energy Fund Europe III.
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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 the Part 2 items remain confidential and restricted from the public. It was further agreed that future reporting should avoid the use of sensitive information where possible. |
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DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Committee will be on Friday 8 February 2019. Minutes: The Committee noted its next public meeting to take place on 8 February 2018. |