Agenda and minutes

The Chair Councillor Jill Whitehead welcomed those present, and in particular extended a warm welcome to the new committee members, Councillor Richard Clifton, Vice Chair, and Councillor Sam Weatherlake, and to all guests

Apologies were received from Councillor Param Nandha.

There were no declarations of interest.

To approve as a correct record the Minutes of the meeting held on 18 March 2019.

RESOLVED: that the minutes of the meeting held on 18 March 2019 be agreed as an accurate record and signed by the Chair.

A presentation was delivered by Mike O'Donnell Chief Executive and Will McBean Relationship Manager from the London CIV.

Members asked the following questions:

1. The government's aim is to ultimately have all Borough funds invested via the CIV. Do you think the legislators have a clear understanding of how long it will take to accomplish this given the time lines they have set through their recent consultation?

In response Mike O'Donnell Chief Executive advised that whilst the consultation talked about 95% of new investments being pooled by 2020 , he was not sure if that target is realistic but believes that Boroughs need to be seen to make good progress. He commented that the CIV need to have all required products available to help make the transition happen.

2.            Until recently the CIV was heavily city dominated. How will the CIV consult boroughs going forward to ensure that Boroughs needs are taken on board, and that the local government ethos is promoted and maintained?

Mike O'Donnell Chief Executive acknowledged this concern. He advised his new role will help to provide balance within the team due to his Local Government background. He also commented on the strong governance within the CIV and highlighted the representation on the  shareholder board and committee.

3.            Bearing in mind that each Borough will have different and varying priorities, how do these square with the CIV's own asset allocation priorities for London as a whole?

The Committee were advised that the CIV will not have its own asset allocation strategy.  This would be governed by each borough’s strategy. It was acknowledged that there is a challenge in collating the requirements of all boroughs and being able to meet all individual boroughs requirements.

4.            The actuaries are currently carrying out the latest triennial review and this may result in amendments to Sutton asset allocation priorities. How can the level of assets pooled through the CIV be increased?  How confident are you that your investment platform will have products which suit our priorities?

The committee were advised of the approach of  the CIV Relationship Managers who undertake regular detailed engagement with all London boroughs to capture requirements regarding strategic asset allocation which will aid this process.

5.            Regarding demand for popular new CIV products, would investment providers be able to meet demand or does London have too many boroughs to be manageable?

The committee were advised that the CIV Relationship managers are making sure there is capacity for the demand and to make sure funds are fit for purpose and set up in a timely manner.

6.            Fund performance is key whether through the pool or not. The Pension Pools were created to save on provider management fees but little thought was given to performance and the transition cost of funds into the CIV . How can you square the saving of expenses with performance?

The representatives confirmed that pooling has to deliver individual value and boroughs need to be able to assess performance net of fees

7.            How  ...  view the full minutes text for item 5.

This report shows the performance of the total Fund and individual fund managers for the quarter ending 31 March 2019, performance in the last twelve months, annualised rolling three year performance against the benchmark and performance since inception.

RESOLVED: that :

The performance of the total Fund, contribution at the fund manager level and detailed attribution of the results be noted

A verbal  update will be provided to the Committee on the review of the draft ESG policy.

Lyndsey Gamble, Head of Investment Risk and Commercial Finance, and David Walker Hymans Robinson provided a verbal update to Members on the Review of the draft ESG Policy

The committee were advised of the work undertaken on actions from the previous sessions. A further workshop is being planned to identify the Committees current investment beliefs and if any amendments are required. The Head of Investment Risk and Commercial Finance will propose dates to Members so that a date can be finalised during July.  Engagement has taken place with existing fund managers to evaluate the current Investment Manager arrangements to benchmark the extent to which consideration of ESG factors are already embedded in the Funds arrangements,  and how this can be reported to the committee via a performance report.

Truecost has been tasked with providing a report to help the committee to understand the ESG profile of the current investment portfolio.

A further update will be provided to the Committee  in September and will look at the whole fund and individual employer funds.

Members queried the impact of the new valuation on contribution rates.  It was confirmed that the contributions to be paid would be proposed by Barnett Waddingham.  New members sought clarity on the role of this committee and if Members were liable if the asset allocation strategy did not deliver the expected returns.  Members were advised their role is to act as Trustees but that they were not personally liable.

Members asked about the impact of austerity and the fact there will be more pensioners and less people earning to cover funds in future . The committee were advised that this is an issue across all funds.

This report sets out the background to the training policy and plan that has been developed for both the Pension Board and Pension Committee for 2019/20. The training plan set out at Appendix B is a working draft which will be revised to reflect changes in the pensions landscape and specific committee and board requirements .

RESOLVED: that :

The Pension Fund training policy and plan as set out in Appendix A and B be agreed.

This report provides an update on the main work streams impacting pensions administration for the period of February 2019 to April 2019.

RESOLVED: that :

The report was considered and noted.

The Work Programme set out in this report has been produced to propose agenda items to be presented and discussed at future meetings.

RESOLVED: that : The proposed Work Programme set out in the report was noted

The Chair must approve the reason for urgency.

There was no urgent business.