Agenda and minutes

Pension Committee
Monday, 4th September, 2017 6.00 pm

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

Contact: Fiona Bywaters, Committee Services Team Leader  Tel: 020 8770 4990 | Email:  committeeservices@sutton.gov.uk

Items
No. Item

16.

Welcome and Introductions

Minutes:

The Chair, Councillor Sunita Gordon, welcomed all those present.

17.

Apologies for Absence

Minutes:

Apologies for absence were received from Councillor Neil Garratt and Councillor Nick Mattey. It was acknowledged that the meeting was not quorate and therefore the meeting would begin with non-decision making items. The order of the items taken is as per the minutes.

 

Councillor Edward Joyce arrived at 18:26 and the meeting was quorate after the Member Training item.

18.

Declarations of Interest

Minutes:

No declarations of interest were raised.

19.

Member Training

The proposed topic for this member development session is ‘Alternative Credit.’

Minutes:

A member development session was delivered on the subject of alternative credit and focussed on:

·         The role of income focussed investments.

·         Background to alternative credit.

·         Ways to access alternative credit - liquid and illiquid; and

·         Market outlook.

20.

Minutes of the Previous Meeting pdf icon PDF 142 KB

To approve as a correct record the Minutes of the meeting held on 12 June 2017.

Minutes:

RESOLVED: that the minutes of the meeting held on 12 June 2017 be agreed as an accurate record.

21.

Quarterly Investment Performance Report [to June 2017] pdf icon PDF 368 KB

This report shows the performance of the Pension Fund Investment Managers for the quarter ending 30 June 2017, performance in the last twelve months, annualised rolling three year performance against target benchmark and performance since inception.

 

Appendix B – Exempt Agenda Pack

Additional documents:

Minutes:

Lyndsey Gamble, Head of Financial Strategy and Planning, presented the report.

 

In particular, Members discussed the movement in fund values over the last quarter and the additional investment in two new Partner’s Group funds.

 

Members were reminded that the Newton holding had now transferred into the CIV. The Chair, Councillor Sunita Gordon, requested that CIV holdings be referenced in the report tables and the Head of Financial Strategy and Planning agreed to make it clearer where funds had been transferred in future reports.

 

RESOLVED: that

1.    The performance of the Pension Fund Investment Managers be noted.

22.

Presentation by Newton for investment performance results [to June 2017]

Minutes:

David Moylett, Client Director - Newton, provided a presentation on investment performance results to June 2017 which the Committee noted.

 

Councillor Richard Broadbent queried investment in tobacco companies, where it was confirmed that there was no such restriction.

23.

Pension Fund Annual Report pdf icon PDF 138 KB

The attached Pension Fund Annual Report has been produced to keep pensioners and other interested stakeholders informed about the administration and performance of the London Borough of Sutton Pension Fund, and to comply with regulation 34 of the Local Government Pension Scheme (Administration) Regulations SI2008 No 239. The annual report includes the pension fund governance compliance statement at Appendix III which has been revised and updated.

Additional documents:

Minutes:

Lyndsey Gamble, Head of Financial Strategy and Planning, presented the report, drawing particular attention to the second recommendation on the subject of the Governance Compliance Statement.

 

Members discussed best practice guidance and in particular, the governance non-compliance in relation to the composition of the Pension Committee given the existence of the Pension Board. Members requested that the Head of Financial Strategy and Planning look at how other London Boroughs approach committee composition and circulate the information outside of the committee.

 

Councillor Richard Broadbent requested that an updated training plan, as referenced in the governance statement, be circulated among Members.

 

An amendment to paragraph 3.10 was highlighted, in that it should read year ended 2017. Councillor Richard Broadbent requested an update on the progress of the pension fund accounts’ audit and the Head of Financial Strategy and Planning outlined that this would be discussed at a future committee.

 

RESOLVED: that

1.    The Pension Fund Annual report for 2016/17 be approved.

2.    The Governance Compliance Statement, included as Appendix III of the 2016/17 Pension Fund Annual Report be approved.

3.    Authority be delegated to the Strategic Director - Resources to make final amendments to the annual report as required before publication.

24.

MiFID II pdf icon PDF 231 KB

This report outlines the impact of the implementation of the Markets in Financial Instrument Directive 2014/65 (“MiFID II”) and in particular the risk to the administering authority of becoming a retail client from 3 January 2018 and recommends that the Committee agree that the Authority elects for professional client status.

Additional documents:

Minutes:

David Walker, Hyman Robertson, presented the report.

 

Councillor Richard Broadbent, requested clarification on Paragraph 3.6, the exclusion of certain asset classes, and Paragraph 3.13, significant changes to the committee. Further detail was provided by the Head of Financial Strategy and Planning, citing an example of transport infrastructure with reference to the first question and the departure of senior staff to the second. Further discussion ensued as to the applications required under recommendation 2 and that these would be commenced in September.

 

It was confirmed by Officers present that other boroughs were taking the same line of action following reference to Appendix A (Retail Client Protections) by Councillor Richard Broadbent who also queried whether there had been any problems with the issues listed in the Appendix, to which it was responded no due to existing professional status.

 

RESOLVED: that

1.    The potential impact on investment strategy of becoming a retail client with effect from 3 January 2018 be noted.

2.    The immediate commencement of applications for elected professional client status with all relevant institutions in order to ensure it can continue to implement an effective investment strategy be agreed.

3.    It be acknowledged that in electing for professional client status the Committee agrees to forgo the protections available to retail clients as set out in Appendix A.

4.    Authority be delegated to the Strategic Director - Resources to complete the applications and determine the basis of the application as either full or single service.

25.

Pension Administration Update pdf icon PDF 169 KB

This report provides an update on the main work streams impacting pension administration for the period May 2017 to July 2017.

Additional documents:

Minutes:

Sarah Spence, Sutton & Kingston Shared Pension Service Project Manager, presented the report, highlighting in particular:

·         End of year annual returns

·         Roll-out of pensions online

·         TUPE transfers

 

Councillor Richard Broadbent queried the testing carried out on Pensions On Line, referred to in Paragraph 4.3. The Shared Pension Service Project Manager commented that this had impacted on the project timelines.

 

Councillor Richard Broadbent also requested further details as to the Stage 2 Complaint mentioned in Paragraph 5.4. The Shared Pension Service Project Manager explained that this related to an issued pension benefits estimate and was now resolved.

 

RESOLVED: that

1.    The Pensions Administration update report was considered and noted.

26.

Investment Strategy Review Update pdf icon PDF 120 KB

This report updates the committee on progress with the review of the current pension fund investment strategy. The final results of the review will be brought to the Pension Committee for discussion in December.

 

Appendix A – Exempt Agenda

Additional documents:

Minutes:

Lyndsey Gamble, Head of Financial Strategy and Planning, presented the report. David Walker, Hyman Robertson, summarised the report attached at Appendix A.

 

RESOLVED: that

1.    Progress on the review and the content of the research paper from the Fund’s investment advisors Hymans Robertson be noted.

27.

Review of Work Programme pdf icon PDF 73 KB

Minutes:

Members reviewed the work programme and noted:

 

·         December: The final pension administration strategy.

 

Councillor Richard Broadbent referred to the governance review action plan and enhancements to the online information relating to Pension Funds. Sarah Spence, Shared Pension Service Project Manager, explained that this had been delayed. Councillor Broadbent also drew attention to the absence of member development on Myners Principles. The Chair, Councillor Sunita Gordon, asked that this be considered for December’s meeting if possible.

 

The Chair, Councillor Sunita Gordon, requested that a follow-up to John Raisin’s Governance Review be reported in 2018.

28.

Any Urgent Business

The Chair must approve the reason for urgency.

Minutes:

No urgent business was raised.