Investment and Pension Fund

Committee Minutes

Fri Nov 25 2011

Related Documents:
agenda for these minutes

Present

Devon County Council

Councillors Parsons (Chairman), Brook, Cann, Edgell, Fry, Haywood, Moulding, Pennington, Radford, Sanders and Westlake

Unitary and District Councils

Councillors Bowyer and Stark (Plymouth), Edwards (Exeter - LGA Devon), Thomas (Torbay)

Union and retired Members: Observers Non-Voting

Mr. Franceschini, Mr. Lomax and Mrs. Parker

Apologies

Councillor Hannon

*102 Minutes

RESOLVED

(a) that the minutes of the meeting held on 2 September 2011 be signed as a correct record;

(b) that the action of the Chairman in approving Exeter CVS being admitted to the Pension Scheme as an admitted body be noted.

*103 Pension Fund Annual Report Accounts 2010/11

The Committee considered the draft Annual Report and Accounts which was enclosed with the agenda.

The County Treasurer advised the Committee that under LGPS regulations the Annual Report and Accounts had to be approved by the Committee and published by 1 December 2011. Additionally the Fund s external auditor was required to review the annual report prior to publication. On adoption by the Committee the auditor would issue the audit certificate for inclusion in the final published document.

It was MOVED by Councillor Parsons, SECONDED by Councillor Moulding and

RESOLVED that the Annual Report and Accounts be adopted.

*104 Statement of Investment Principles

The Committee considered the report of the County Treasurer (CT/11/27 - text only | pdf CT/11/27) on material changes to the Statement of Investment Principles (SIP) required since it was last revised in November 2009.The amendments take into account the revised Myners Principles and incorporate the Pension Fund policy with regard to the UK Stewardship Code.

Councillor Thomas distributed statistics setting out the health implications of smoking and alcohol abuse and proposed that the Pension Fund dispose of its holdings in tobacco. Members of the Committee discussed this proposal at some length and concluded that it was the Committee s fiduciary duty to generate maximum income for the Fund.

It was MOVED by Councillor Parsons, SECONDED by Councillor Moulding and

RESOLVED

(a) that the revised Statement of Investment Principles as set out in Appendix 1 to the report be approved and adopted;

(b) that no changes be made to the section on Social, Environmental and Ethical issues;

(c) that the Committee consider a motion from Councillor Thomas at the next meeting in February 2012: that officers engage with the Secretary of State for Work and Pensions, all Devon MPs and the national body that represents local authority pension funds with the objective of addressing the clash between the present Government strategy of reducing the consumption of tobacco and alcohol usage in the UK based on the consequential effects on the health and mortality of UK citizens and associated costs of related health care on the one hand, and the duty of care that pension funds are obliged to take in achieving the highest return on their investments for fund for which they are responsible on the other hand and which clash of objectives by default creates a dichotomy between Government strategy and pension fund obligations.

*105 Government Consultation on Proposed Increases to the Local Government Pension Scheme (LGPS) Employee Contribution Rates and Changes to Future Scheme Accrual Rates

The Committee considered the report of the County Treasurer (CT/11/28 - text only | pdf | supplementary information CT/11/28) on a proposed response to a consultation document issued by the Secretary of State for Communities and Local Government on how required savings can be achieved by increased contribution rates and other scheme changes. The deadline for a response was 6 January 2012.

Members were most concerned about the possibility of people opting out of the Pension Fund in the current climate of financial restraint and the Committee s Adviser explained the possible implications for the Fund if this were to happen. The Committee was reminded of the way the changes were weighted towards lower increased contributions for the less well paid which should mitigate against the lower paid leaving the scheme. However, Members still felt the response relating to possible opt outs should be strengthened.

It was MOVED by Councillor Parsons, SECONDED by Councillor Moulding and

RESOLVED

(a) that the Committee note the content of this report;

(b) that a response to the consultation by the Department for Communities and Local Government (CLG) set out at Appendix 1 of the report be strengthened by the Chairman in association with officers in line with Members comments made at the meeting;

(c) that the Chairman be authorised to submit the strengthened response on behalf of the Devon Pension Fund.

*106 Investment Management and New Money Report

The Committee considered the report of the County Treasurer (CT/11/29 - text only | pdf CT/11/29) on the Total Fund performance for six months to 30 September 2011 and the comparative Index returns and market indices, asset allocation and updates on Treasury Management Stewardship and New Money.

It was MOVED by Councillor Parsons, SECONDED by Councillor Moulding and

RESOLVED

(a) that the Investment Management Report be noted;

(b) that the Committee note compliance with the 2011/12 Treasury Management Strategy;

(c) that up to 20 million be allocated to property during the next quarter for investment by the newly appointed property manager;

(d) that no further new money be allocated in the current quarter unless the County Treasurer and the Chairman determine that such an allocation up to 50 million could be made to the benefit of the Fund.

*107 Dates of Future Meetings

Members noted that the Committee would meet at 10.00am on the following dates:

2012

24 February 2012 (including annual consultative meeting)

11 May 2012

14 September 2012

23 November 2012

2013

1 March 2013

*108 Exclusion of Press and Public

RESOLVED that the press and public be excluded from the meeting for the following items of business under Section 100(A)(4) of the Local Government Act 1972 on the grounds that they involve the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act, namely information relating to the financial or business affairs of a person other than the County Council and, in accordance with Section 36 of the Freedom of Information Act 2000, by virtue of the fact that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.


*109 Appointment of Property Fund of Fund Manager

The Committee considered the report of the County Treasurer (CT/11/30).

It was MOVED by Councillor Moulding, SECONDED by Councillor Brook and

RESOLVED

(a) that the Committee endorse the Member Panel decision on the appointment of an external manager to manage the Pension Fund s property portfolio by means of a Fund of Fund mandate, as set out in the report;

(b) that the property mandate comprise both investments in UK property unit trusts and up to a maximum of 20% in overseas property trusts.

*110 Investment Management Review

The Committee considered the report of the County Treasurer (CT/11/31).

It was MOVED by Councillor Brook, SECONDED by Councillor Moulding and

RESOLVED that the Committee approve the detailed recommendations as set out in the report.

*DENOTES DELEGATED MATTER WITH POWER TO ACT

The Minutes of the Committee are published on the County Council s Website at:

The meeting started at 10.00 am adjourned at 1.20pm

reconvened at 1.55 and finished at 2.45pm

Date Published: Tue Dec 06 2011