Archived decisions
AT A MEETING of the PENSION FUND PANEL held at The Castle, Winchester on 26 November 2003.
PRESENT:
Councillors: T.K. Thornber, CBE (Chairman); B.D. Dash; Mrs. S.M. Glasspool; P.R.C. Hutcheson; A.R. Ludlow; J. Waddington; W.H. Wheeler.
Pensioners' representative: Mr E.W. Hughes.
Contributors' representative: Mr D. Offord.
Independent consultant: Mr H. Cole.
88 DECLARATIONS OF INTEREST
Members were mindful that, where they believed they had a personal or prejudicial interest in any matter to be considered at the meeting, they should, normally at the time of the debate, declare their interest and, having regard to the circumstances described in paragraphs 9, 10, 11 and 12 of the County Council's Code of Conduct, consider whether to leave the meeting whilst the matter was discussed.
89 CHAIRMAN'S COMMUNICATIONS
No Chairman's communications were received.
90 DEPUTATIONS
No deputations were received.
91 MINUTES
The Minutes of the meeting held on 6 November 2003 were confirmed as a correct record and signed by the Chairman.
92 PENSION FUND ANNUAL GENERAL MEETING
The Panel received and noted a report of the County Treasurer (Item 5 in the Minute Book) on the sixth Annual General Meeting of the Hampshire Pension Fund held on 16 September 2003. The meeting had been attended by most of the major employers. Feedback on the presentations had been positive.
93 HAMPSHIRE PENSION FUND - REVIEW OF BUSINESS PLAN AND TRAINING
The Panel considered a report of the County Treasurer (Item 6 in the Minute Book) on revisions to the Pension Fund's business plan including progress on the action plan. The report also summarised the Panel's second training session organised by Deutsche Asset Management in July 2003 and provided information on external training courses available for Panel Members. The Panel considered other options for training in addition to these courses.
RESOLVED:
(i) That the revised business plan be approved.
(ii) That progress on the action plan be noted.
(iii) That a further training session for the Panel be arranged in Winchester in the first half of 2004, to be delivered by an independent fund manager or expert.
94 REVIEW OF STATEMENT OF INVESTMENT PRINCIPLES
The Panel considered a report of the County Treasurer (Item 7 in the Minute Book) concerning the annual update of the Pension Fund's Statement of Investment Principles, attached as an appendix to the report. The Panel discussed the changes to the draft statement.
RESOLVED:
That the updated Statement of Investment Principles be approved, subject to the inclusion in the section entitled "Communications with Fund employers and members" about the annual newsletter to pensioners.
95 MANAGERS' FEES, TRANSACTION COSTS AND SOFT COMMISSION ARRANGEMENTS
The Panel considered a report of the County Treasurer (Item 8 in the Minute Book) reviewing the level of costs incurred by the Fund over the last year, including management fees paid to the Fund's investment managers and transaction costs such as brokerage and stamp duty. The report also covered the use of soft commission by the investment managers to obtain research and other services from brokers in return for placing a minimum level of business with the brokers. The Panel also discussed how the performance of the Hampshire Pension Fund can be compared with other pension funds.
RESOLVED:
(i) That the County Treasurer report to a future meeting of the Panel on comparisons of the Fund's performance with other pension funds.
(ii) That the report be noted.
96 LOCAL GOVERNMENT PENSION SCHEME - GOVERNMENT CONSULTATION UPDATE
The Panel considered a report of the County Treasurer (Item 9 in the Minute Book) on progress on the Government's review of the Local Government Pension Scheme (LGPS) including two further consultation papers issued on 30 September and 7 November 2003. The report suggested responses to the points raised in the consultation papers. The Government had asked for views on whether the rate of contributions paid by employees should be increased from 6% of pay to 7% or 8%, and whether the increase should be applied to new employees only or to existing employees as well.
RESOLVED:
(i) That, subject to recommendation (ii) below, the County Treasurer be authorised to submit comments to the Government on behalf of the Fund as set out in sections 2 and 3 of the report.
(ii) That the Government be recommended to increase the rate of contributions paid by employees to 7% for all employees from 1 April 2005.
(iii) That the remainder of the report be noted.
97 EMPLOYEE AND PENSIONER REPRESENTATIVES
The Panel considered a report of the County Treasurer (Item 10 in the Minute Book) on the Panel's employee and pensioner representatives whose appointments were due to expire in March 2004. The existing representatives had confirmed that they were willing to continue beyond that date.
RESOLVED:
That the appointments of E.W. Hughes as pensioner representative, Derek Offord as employee representative and Phillip Reynolds as deputy employee representative be extended to March 2006.
98 PENSIONS FOR COUNCILLORS - UPDATE
The Panel received and noted a report of the County Treasurer (Item 11 in the Minute Book) on progress on extending membership of the Local Government Pension Scheme to qualifying elected members. At the time of the Panel meeting, 18 out of 70 qualifying County Council members had elected to join the scheme.
99 PART-TIME PENSION CLAIMS - UPDATE
The Panel received and noted a report of the County Treasurer (Item 12 in the Minute Book) on progress on settling claims for membership of the Fund by part-time workers. Guidance had been issued by the Government and a timetable prepared leading to completion of the process for settling the outstanding claims by February 2005.
100 THE LOCAL GOVERNMENT PENSION SCHEME (MANAGEMENT AND INVESTMENT OF FUNDS) (AMENDMENT) REGULATIONS 2003
The Panel considered a report of the County Treasurer (Item 13 in the Minute Book) on new regulations that came into force on 19 November 2003. The regulations enabled Local Government Pension Scheme administering authorities to adopt more relaxed restrictions on how their funds were invested.
RESOLVED:
(i) That no decision be taken to increase any of the investment limits pending the review of the benchmark in 2005.
(ii) That the remainder of the report be noted.
101 EXCLUSION OF PRESS AND PUBLIC
RESOLVED:
That, by virtue of paragraphs 7 and 12 of Part 1 of Schedule 12A of the Local Government Act 1972, the press and public be excluded from the meeting.
102 DEUTSCHE'S PROPOSALS FOR A GLOBAL APPROACH TO INVESTMENT (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 15 in the Minute Book) on a proposal by Deutsche to apply a global approach to investing their overseas equities. The Panel agreed that the new approach should be applied from 1 January 2004, subject to a review as to continuation in January 2005.
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103 PROPERTY (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 16 in the Minute Book) on the latest valuation of the property portfolio by the Fund's property manager, Savills. The report also outlined progress on the sale of two of the Fund's larger properties and on rent arrears relating to a tenant in administration.
[SUMMARY OF A MINUTE WHICH CONTAINS CONFIDENTIAL INFORMATION]
104 PENSION FUND CASH POSITION AND THE FUTURE OF THE ETHICAL PORTFOLIO (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 17 in the Minute Book) on the Fund's cash balances and the future of the Fund's ethical portfolio. The Panel agreed to transfer part of the cash balances to the fund managers for investment and that Deutsche Asset Management should be invited to manage a portfolio of £10m invested in UK shares on an ethical basis.
[SUMMARY OF A MINUTE WHICH CONTAINS CONFIDENTIAL INFORMATION]
105 OUTLOOK FOR THE ACTUARIAL VALUATION AT MARCH 2004 (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 18 in the Minute Book) on the views of the Fund's actuary Hewitt Bacon & Woodrow on prospects for the results of the Fund's next actuarial valuations on 31 March 2004. The report also considered a cashflow forecast prepared by Hewitt Bacon & Woodrow which showed that the Fund will have a surplus of income over expenditure throughout the next 10 years.
[SUMMARY OF A MINUTE WHICH CONTAINS CONFIDENTIAL INFORMATION]