Agenda and minutes

Pensions Panel
Monday, 28th January, 2019 10.00 am

Venue: County Hall, Chichester

Contact: Rachel Wood on 033 022 23387  Email:  rachel.wood@westsussex.gov.uk

Items
No. Item

83.

Declarations of Interests

Members and officers are invited to make any declaration of personal or prejudicial interests that they may have in relation to items on the agenda and are reminded to make any declarations at any stage during the meeting if it becomes apparent that this may be required when a particular item or issue is considered.

 

It is recorded in the register of interests that:

·         Dr. Walsh is a Member of the Littlehampton Harbour Board, Arun District Council and Littlehampton Town Council

·         Mr Donnelly is a Horsham District Councillor

·         Mr Jupp has a daughter who works for Blackrock

 

These financial interests only need to be declared at the meeting if there is an agenda item to which they relate.

Minutes:

83.1   Mr Hunt declared a personal interest as a member of the Chichester Harbour Conservancy.

84.

Part I Minutes of the last meeting pdf icon PDF 62 KB

The Panel is asked to agree the Part I minutes of the meeting of the Panel held on 1 November 2018 attached (cream paper).

Minutes:

84.1   Resolved – That the Part I minutes of the Pensions Panel held on 1 November 2019 be approved as a correct record, and that they be signed by the Chairman.

85.

Investment Strategy pdf icon PDF 91 KB

Report by the Director of Finance, Performance and Procurement.

 

The Panel will also receive a presentation from Hymans Robertson.

 

The Panel is asked to consider the options presented in the report and within the presentation provided during the meeting.

Additional documents:

Minutes:

85.1   The Panel considered a report by the Director of Finance Performance and Procurement (copy appended to the signed minutes).

 

85.2   Rachel Wood, Pension Fund Investment Strategist, introduced the report which looked into the previous discussion on infrastructure and private debt investment consideration.

 

85.3   David Walker, Hymans Robertson, spoke through the report which recommended approaches for the different asset classes and the rationale and considerations for each.

 

85.4   The Panel made comments on Infrastructure including those that follow.

 

      Queried the rates that were used in the investment calculations. David Walker explained that the rate depended on the asset for the underlying measure.  Not all contracts were linked with inflation.  7-10% was considered a good target.

      Questioned the impact of Brexit on Global infrastructure and would mechanisms could be used to counter the impact. David Walker explained that careful due diligence would manage the currency risk.

      Sought clarity on the experience of the projects. David Walker explained that it was important to look at elements such as the managers’ due diligence, strong investor protections, assurance on contract governance terms, etc.

      Asked if investment in the proposed classes should be direct investments, or via a fund. David Walker proposed that a fund option would be preferred.

      Queried if Global infrastructure would include the UK. David Walker confirmed there would be UK exposure.  Steven Law, Hymans Robertson, confirmed that Canada had made historical investments in infrastructure that could be studied.

 

85.5   The Panel made comments on Private Debt including those that follow.

 

      Queried if investments in private debt would be balanced via a mandate. David Walker explained that it would be possible to invest in a single or multiple funds.  A proposal of 2 fund commitments was suggested which would give the desired exposure and diversification.

      Asked if the fund would be able to restrict where funds went. David Walker reported that it would be for the fund manager to set their mandate.  The may be small scope for the pension fund to add restrictions.

      Queried the risk of correction with real estate and retail investments. Mr Hunt felt that more consideration was required on these investments further down the line.  It would be something to discuss with fund managers.

      Queried the proposed level of investment at 5% in private debt. David Walker proposed 5% was a good starting point.  The investment could then be built on as appropriate.

      Asked Hymans Robertson representatives to clarify their recommendation in the report regarding the retention of existing equity holdings. David Walker commented that there has been sufficient de-risking activity and that current holdings should be maintained until the fund was ready to diversify.  Caroline Burton, Independent Advisor, agreed with the recommendation in the report.

 

85.6   The Panel also went into Part II to discuss Appendix C that was Part II.

 

Resolved - That under Section 100(4) of the Local Government Act

1972, the public be  ...  view the full minutes text for item 85.

86.

Pension Fund Policy Documents pdf icon PDF 72 KB

Report by the Director of Finance, Performance and Procurement.

 

The Panel is asked to consider the recommendation within the report.

Additional documents:

Minutes:

86.1   The Panel considered a report by the Director of Finance Performance and Procurement (copy appended to the signed minutes).

 

86.2   Steve Harrison, Financial Planning Manager, introduced the report and explained that it was good practice to look at the Treasury Management report annually.

 

86.3   The Panel discussed the use of held cash and if the policy would need to be updated. Mr Hunt explained that cash was used on demand and was not generally held.  Steven Law commented that other local authorities were looking at more creative uses of cash.

 

86.4   Resolved – that the Panel approves the 2019/20 Treasury Management Strategy and notes the treasury activity undertaken during 2018/19.

87.

Date of the next meeting

The next meeting of the Pensions Panel will be 10.00 a.m. 29 April 2019 at County Hall.

Minutes:

87.1   The Panel noted that its next scheduled meeting would take place on 29 April 2019 at County Hall, Chichester.

88.

Exclusion of Press and Public

The Board is asked to consider in respect of the following item(s) whether the public, including the press, should be excluded from the meeting on the grounds of exemption under Part I of Schedule 12A of the Local Government Act 1972, as indicated below, and because, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.

Minutes:

88.1   Resolved - That under Section 100(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Part I, of Schedule 12A, of the Act by virtue of the paragraph specified under the item and that, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.

89.

Part II Minutes of the last meeting

To confirm the Part II minutes of the meeting of the Panel held on 1 November 2018, for members of the Panel only (yellow paper).

Minutes:

The Panel agreed the Part II minutes of the Pensions Panel held on 1 November 2018.

90.

Investment Pooling

Report by Director Finance, Performance and Procurement attached for members of the Panel only (yellow paper).

 

The Panel is asked to consider the recommendations within the report.

Minutes:

The Panel considered a report by the Director of Finance, Performance and Procurement on Investment Pooling.

 

The Panel agreed the recommendations within the report.

91.

Review of Pension Performance

The following reports are for the Panel to review Pension performance over the last quarter.

Minutes:

The Panel considered a paper by the Director of Finance, Performance and Procurement.

 

The Panel received an update from Caroline Burton relating to the quarterly performance reports from the fund managers.

 

The Panel welcomed the advice.

92.

Business Plan (including Pension Administration)

Report by Director Finance, Performance and Procurement attached for members of the Panel only (yellow paper).

 

The Panel is asked to consider the recommendations within the report.

Minutes:

The Panel considered a report by the Director of Finance, Performance and Procurement.

 

The Panel considered the report and welcomed Andrew Lowe from Hampshire County Council to discuss the progress with the transfer of pension administration.

93.

Presentation by Baillie Gifford

The Panel to receive a presentation on portfolio performance.

Minutes:

The Panel received an update from Lynn Dewar & Anne-Marie Gillon from Baillie Gifford on the portfolio performance for the quarter.

94.

Presentation by Aberdeen Standard

The Panel to receive a presentation on portfolio performance.

Minutes:

The Panel received an update from Jennifer Ball, Matthew Cunliffe & Dominic Delaforce from Aberdeen Standard on the portfolio performance for the quarter.