Agenda and minutes

Pension Committee
Monday, 14th March, 2016 7.00 pm

Venue: Civic Offices, St Nicholas Way, Sutton SM1 1EA

Contact: Susanne Wicks, Committee Support Team Leader, Tel: 020 8770 6540 | Email:  susanne.wicks@sutton.gov.uk 

Items
No. Item

45.

Apologies for absence

Minutes:

Apologies for absence were received from Councillor Neil Garratt.

46.

Declarations of Interest

Minutes:

No declarations were made.

47.

Minutes of the previous meeting pdf icon PDF 127 KB

To approve the minutes of the meeting held on 30 November 2015.

Minutes:

RESOLVED:  That the minutes of the meeting held on 30 November 2015 are agreed as an accurate record.

48.

Exclusion of the press and public

The following motion should be moved, seconded and approved if the committee wishes to exclude the press and public to deal with reports revealing exempt information:

 

“That 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 as defined in paragraph 3 Schedule 12A of the Local Government Act 1972.”

 

Minutes:

RESOLVED:  That 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 as defined in paragraph 3 Schedule 12A of the Local Government Act 1972

49.

Member Training - MIFID II and forthcoming changes

Minutes:

David Walker, Senior Investment Consultant at Hymans Robertson delivered a short training session on the potential impact of MiFID II (Markets In Financial Instruments Directive). The items covered were:

 

What is MiFID?

What are the main changes?

How may it impact on the Fund?

Timescales for change.

Potential actions.

 

David Walker invited comments and questions. At the request of Councillor Nick Mattey, he gave details of the potential impact of a local authority being assessed as retail status, and explained that different fund managers may take differing approaches to assessment leading to disparate views on the status.  He suggested that, should a local authority seek to appoint a new fund manager, they would wish to take this issue into consideration, due to the potential impact on fees.

 

Councillor Sunita Gordon confirmed that MiFID II is already on the agenda for the London CIV. 

 

David Walker suggested that this Committee may wish to delegate authority to the Strategic Director of Resources as part of their preparation for the assessment of the status as either retail or professional. 

 

50.

Quarterly Investment Performance report pdf icon PDF 418 KB

Additional documents:

Minutes:

The Head of Financial Strategy and Planning presented this report, and highlighted some key aspects of the report for the committee.  She invited comments and questions.

 

When invited to comment, David Walker noted that the mix of different approaches by the fund managers appears to be having a positive impact on the performance of the fund.

 

RESOLVED:  That the Pension Committee notes the performance of the fund investment managers.

51.

Presentation by Baillie Gifford (Pooled Multi Asset) and Pyrford (Pooled Multi Asset) for investment performance results to December 2015

Minutes:

The Committee received a presentation from Tom Wright and Chris Murphy.  They advised that Baillie Gifford have transferred into the London CIV so will not be reporting directly to the Committee in future.

 

Chris Murphy presented an overview of Baillie Gifford’s investment strategy and performance since initial investment and the twelve month period up to 31 December 2015.  Chris Murphy reminded the Committee that the period had been difficult for the global economy, and that over a five year period there will be varying returns.

 

The Committee then received a presentation from Paul Simons and Felim Glynn from Pyrford, which covered their performance up to 31 December 2015, along with performance over the last three years.  The presentation also covered Pyrford’s current views on investment, and described various factors impacting on the global economy.

52.

Presentation from Local Authority Pension Fund Forum

Minutes:

Keith Bray, Forum Officer from the LAPFF delivered a detailed presentation to the Committee covering the work of the LAPFF, its membership and structure, the work carried out with regard to corporate governance and social responsibility, approaches to activism and engagement results. 

 

In response to questions, Keith Bray confirmed that if LB Sutton were to join the LAPFF, one or two representatives would be invited to attend each meeting, and two delegates invited to the annual conference. 

 

After Mr Bray left the meeting, the Committee discussed the benefits for Sutton in joining the LAPFF, and took advice from officers. 

 

It was moved by Councillor Nick Mattey, seconded by Councillor Hamish Pollock and

 

RESOLVED that LB Sutton join the LAPFF.

53.

Approach for the Triennial Actuarial Valuation for March 2016

A presentation from Alison Hamilton at Barnett Waddingham

Minutes:

Alison Hamilton from Barnett Waddingham delivered a short presentation to the Committee on Sutton’s approach to actuarial valuations.  The presentation covered the operation of the fund, types of actuarial valuations, the triennial valuation to take place this year, and the approach for Sutton. 

 

In response to questions from Councillors, Alison Hamilton outlined the key assumptions taken into account when carrying out the valuation, together with the projection of all benefits over the next century.  She advised that most local authorities are paying around 20 – 25% into their pension funds.

 

Alison Hamilton outlined the timetable for the valuation, noting that the outcome will be brought to this Committee in November. 

54.

Pension Administration update pdf icon PDF 195 KB

Minutes:

The report was presented by the Head of Pensions, who invited comments and questions.

 

RESOLVED:  That the Pension Committee notes the report.

55.

Review of Annual Report pdf icon PDF 175 KB

Minutes:

The report was presented by the Head of Financial Strategy and Planning, who pointed the Committee to suggested changes to the report, as highlighted in bold.

 

RESOLVED: That the Pension Committee agrees the changes to the annual report.

56.

Review of work programme pdf icon PDF 166 KB

Minutes:

Councillor Richard Broadbent noted that the Committee resolved at the last meeting that a report detailing the outcome of the review of the environmental, social and governance factors that may impact on the fund should be presented to the June meeting.  It was agreed to add this to the work programme for June or September, depending on the progress of the review. 

57.

Date of Next Meeting

13 June 2016 at 7 pm.

 

Minutes:

The next meeting will take place on 13 June 2016 at 7 pm.