Agenda and minutes
PDF 303 KBVenue: Remote via Microsoft Teams
Contact: Angela Guest Email: angela.guest@surreycc.gov.uk
Media
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APOLOGIES FOR ABSENCE AND SUBSTITUTIONS
Additional documents: Minutes: An apology was received from Mr David Mansfield.
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MINUTES OF THE PREVIOUS MEETING [11 SEPTEMBER 2020]
To agree the minutes as a true record of the meeting. Additional documents: 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. Additional documents: 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 (7/12/2020). 2. The deadline for public questions is seven days before the meeting (4/12/2020). 3. The deadline for petitions was 14 days before the meeting, and no petitions have been received.
Additional documents: Minutes: There were six public questions – these and the responses were published as a supplement to the agenda.
Supplementary questions and responses:
1) Helena Ritter asked if the Committee would consider disinvesting in companies where it was shown that engagement on core beliefs was not successful and used Shell as an example. The Chairman confirmed that that would be the case for any stock. 2) Ian Chappell asked a supplementary about the justification for the Committee taking risks given the two facts that in the last three year the market in fuels and reduced 45% and in the same period oil had increased 33%. The Chairman responded that this question had been answered several times and explanations given on how the Committee engages with investment managers and how investment decisions are made. He also invited questioners to stay for item 12 on the agenda which would give them more information. 3) Jenifer Condit asked the Committee when having taken the first step in investing in the low carbon fund, did the Committee not think it should go further and at least move the Rafi money over to low carbon? The Chairman stated that he was happy with both fund returns and explained that different funds had different risks over long and short term periods. The Strategic Finance Manager (Pensions) stated that the Rafi fund was based on a multi factor approach in passive investing and the low carbon fund was based on a market cap therefore both had different risk characteristics. He also stated that there were more developments within LGIM looking at a more flexible ESG approach which officers were exploring. In addition, a review of the approach to active/passive investments is expected to be included in the 2021/22 Fund business plan . 4) Anna Humphris stated that at the beginning of the year BP made a green sustainability announcement but most recently have announced new investments in fossil fuels and therefore what were the Committee going to do with regard to their investment in BP? The Chairman stated that the answer was the same as already given and the Committee would consider its engagement and investments in a measured way as previously explained. 5) Isobel Griffiths stated that the only direct communication she gets is an annual email telling her that the annual benefit statement was available to view. She did not get the employee newsletter, could not view the employer newsletter and did not receive any information on investments. She therefore asked the Committee to communicate at least annually with members on where the money was being invested and particularly showing how much was invested in green versus fossil fuels. The Chairman stated that the information was no secret and the Committee papers were public. The Strategic Finance Manager (Pensions) recognised that more could be done and that the Fund was looking at various ways to improve communication with the membership.
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Local pension board
In accordance with Fund’s governance objectives in the 2020/21 Business Plan.
Additional documents: Minutes: Speakers: Mr Nick Harrison, Chairman Surrey Local Pension Board
Key points raised during the discussion:
· The Annual Benefit Statement had been a successful exercise · The procurement of software was proceeding satisfactorily · The Board’s concern about the exit cap · Small changes had been made to the risk register · The Board would be looking at the help desk backlog before the next meeting. · The Board would be looking at the Communication Strategy at its next meeting and will bring any recommendations to the Committee.
Actions/ further information to be provided: None.
Resolved:
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In accordance with Fund’s funding objectives in the 2020/21 Business Plan.
Additional documents: Minutes: Speakers: Ayaz Malik - Pensions Finance Specialist Key points raised during the discussion:
Actions/ further information to be provided: That this is no longer treated as a separate agenda item but the information subsumed with the main Investment Manager Issues and Performance and Assets/Liabilities Update report.
Resolved:
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To provide details of the Ministry of Housing Communities and Local Government’s (MHCLG) consultation on the reform of exit payments in local government and the response from Surrey.
Additional documents: Minutes: Speakers: Neil Mason, Strategic Finance Manager (Pensions)
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
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This report provides the Pension Fund Committee with details of urgent decisions made regarding the processing of exit payments for eligible local government employees. Additional documents: Minutes: Speakers: Neil Mason, Strategic Finance Manager (Pensions)
Key points raised during the discussion:
1. The report Strategic Finance Manager (Pensions) provided an introduction to the Pension Fund Committee with details of urgent decisions made regarding the processing of exit payments for eligible local government employees, including that which required an officer delegated decision from the Executive Director of Resources (Section 151 officer) and Director of Law and Governance (Monitoring Officer) in consultation with the Chairman of the Pension Fund Committee. He also reported that this was not the first consultation and that a response had been sent about being unhappy that previous comments made were not taken into account. 2. In response to a query about the strain on the Pension Fund the Strategic Finance Manager (Pensions) explained that there would only be additional strain for those above the £75k limit.
Actions/ further information to be provided: None.
Resolved:
1. That the report be noted.
2. The Committee noted the Local Board’s concern at the position that the Fund has been placed in due to conflicts between the Restriction of Public Sector Exit Payments Regulations 2020 and the Local Government Pension Scheme Regulations 2013.
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To provide details of the Ministry of Housing Communities and Local Government’s (MHCLG) consultation on amendments to the Local Government Pension Scheme (LGPS) statutory underpin and the response from Surrey.
Additional documents: Minutes: Speakers: Neil Mason, Strategic Finance Manager (Pensions)
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
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This report provides details of the Department for Work and Pension’s (DWP) consultation on Taking Action on Climate Risk: Improving Governance and Reporting by Occupational Pension Schemes and the response from Surrey.
Additional documents: Minutes: Speakers: Mamon Zaman, Senior Pensions Finance Specialist Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
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NATIONAL KNOWLEDGE ASSESSMENT (NKA) RESULTS AND TRAINING PLAN
The report sets out the results of the National Knowledge Assessment (NKA) conducted by Hymans Robertson. Additional documents: Minutes: Speakers: Ayaz Malik - Pensions Finance Specialist Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
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INVESTMENT CORE BELIEFS AND THE UNITED NATION'S SUSTAINABLE DEVELOPMENT GOALS
Surrey Pension Fund is reviewing its investment strategy with a view to ensuring that it is in line with its Mission Statement and the emphasis on environmental, social and governance (ESG) considerations, in the wider context of the United Nation’s Sustainable Development Goals (SDGs). Additional documents: Minutes: Speakers: Neil Mason - Strategic Finance Manager (Pensions) David Crum - Minerva
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
· Draft relevant changes to the Investment strategy statement · Develop SDG into an engagement framework for companies as well as Investment Manager activity · Work to incorporate SDG metrics in selecting, monitoring and evaluating investment managers · Work with Border to Coast on developing an SDG approach to Pooled assets · Presentation of an implementation plan · Propose the method by which progress on implementation is incorporated as part of all future investment strategy reviews · Propose the timeline for the assessment and ongoing viability and effectiveness of this approach
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COMPANY ENGAGEMENT & VOTING
This report is a summary of various Environmental Social & Governance (ESG) issues that the Surrey Pension Fund, Local Authority Pension Fund Forum (LAPFF), Robeco, and Border to Coast Pensions Partnership (BCPP) have been involved in, for the attention of the Pension Fund Committee.
Two annexes were originally published with the agenda that should not have been. These were working documents and information contained therein had not been verified. Additional documents: Minutes: Speakers: Mamon Zaman - Senior Pensions Finance Specialist Jane Firth – BCPP Sarah Wilson – BCPP
Key points raised during the discussion:
1. The Senior Pensions Finance Specialist introduced a report and explained that the reason for their being no management votes on the voting outcomes was that it was a quiet period for contentious votes. 2. Jane Firth updated the Committee on the Robeco themes explaining that there were two new climate related themes announced; engagement with financial sector on carbon reduction and working towards an acceleration of the Paris Agreement. 3. There was some discussion about how the proposal of resolutions was conducted and by whom.
Actions/ further information to be provided: None.
Resolved:
· Continuing to enhance its own Responsible Investment Approach, its Company Engagement policy, and SDG alignment, referenced in the Investment Core Beliefs & SDG Mapping report. · Applauding the outcomes achieved for quarter ending 30 September 2020 by Robeco in their Active Ownership approach and the LAPFF in its Engagement with multinational companies as at 30 September 2020.
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RESPONSIBLE INVESTMENT POLICY REVIEW
The Border to Coast Pension Partnership (BCPP) is now an established fully regulated asset management company when the authorised contractual scheme (ACS) went “live” on 26 July 2018. As part of this, BCPP now reviews is Responsible Investment (RI) and Corporate Governance and Voting Policy annually in advance of the proxy voting season.
Additional documents: Minutes: Speakers: Mamon Zaman - Senior Pensions Finance Specialist Jane Firth – Border to Coast
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
Mr John Beckett left the meeting at 11.34am.
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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. Additional documents: 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.
11.34 The Committee adjourned for six minutes for a comfort break.
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INVESTMENT MANAGER ISSUES AND PERFORMANCE AND ASSET/LIABILITIES UPDATE
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: Speakers: Mamon Zaman - Senior Pensions Finance Specialist Anthony Fletcher - Independent Advisor Mr Nick Harrison, Chairman, Surrey Local Pension Board Neil Mason - Strategic Finance Manager (Pensions)
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
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PRIVATE MARKET REVIEW
As part of good governance, the Committee reviews the performance of the Fund’s Private Market investments annually. This report is a review of the investment performance of the Private Market portfolio.
Minutes: Speakers: Mamon Zaman - Senior Pensions Finance Specialist Anthony Fletcher - Independent Advisor Neil Mason, Strategic Finance Manager (Pensions) Steve Turner - Mercer
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
Ms Charlotte Morley left the meeting at 12.05pm.
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BORDER TO COAST UPDATE
The Pension Fund Committee is asked to note the Part 2 report.
Minutes: Speakers: Neil Mason - Strategic Finance Manager (Pensions) Andrew Stone – BCPP
Key points raised during the discussion:
Actions/ further information to be provided: None.
Resolved:
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PROVISION OF INVESTMENT ADVICE AND CONSULTATION SERVICES
This Part 2 report is consistent with the Fund’s investment objectives. Minutes: Speakers: Neil Mason, Strategic Finance Manager (Pensions)
Key points raised during the discussion:
1. The Committee discussed this Part 2 report that set out the current arrangements for investment consultancy services and independent investment advice. The contract for investment consultancy was due to expire in April 2021. A sub-committee was sought to take this forward with officers and due to a number of Members having to leave the meeting it was agreed to seek volunteers outside of the meeting.
Actions/ further information to be provided: That the Strategic Finance Manager seek volunteer Members for the sub-committee following the meeting.
Resolved:
That a sub-committee be convened to work with officers in the following areas:
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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. Additional documents: Minutes: Resolved: That no Part 2 papers be released to the public. |
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DATE OF NEXT MEETING
The next meeting of the Surrey Pension Fund Committee will be on 12 March 2021. Additional documents: Minutes: The date of the meeting was NOTED. |