Archived decisions

AT A MEETING of the PENSION FUND PANEL held at The Castle, Winchester on 23 November 2004.

PRESENT:

Councillors: T.K. Thornber, CBE (Chairman); B.D. Dash; Mrs. S.M. Glasspool; P.R.C. Hutcheson; D.A. Kirk; J Waddington; D.F.Wright.

Pensioners' representative: Mr E.W. Hughes.

Contributors' representative: Mr D. Offord.

Independent adviser: Mr H. Cole.

137 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.

138 CHAIRMAN'S COMMUNICATIONS

No Chairman's communications were received.

139 DEPUTATIONS

No deputations were received.

140 MINUTES

The Minutes of the meeting held on 3 November 2004 were confirmed as a correct record and signed by the Chairman.

141 PENSION FUND ANNUAL GENERAL MEETING

The Panel considered a report of the County Treasurer (Item 5 in the Minute Book) on the Fund's successful Annual General Meeting (AGM) held on 21 September 2004. Following comments from some attendees at the AGM about the adequacy of the venue at the Record Office, the County Treasurer had provisionally booked Westley Court at Sparsholt College of Agriculture for next year's AGM on 22 September 2005.

RESOLVED:

(i) That the booking of Westley Court at Sparsholt College of Agriculture on Thursday 22 September 2005 for the next AGM be approved.

(ii) The remainder of the report be noted.

142 REPRESENTATION FOR DISTRICT COUNCILS AND CITIES

The Panel considered a report of the County Treasurer (Item 6 in the Minute Book) regarding representation for other employers on the Pension Fund Panel. The Government had indicated that administering authorities of Local Government Pension Funds should consider allowing single representatives of groups of other employers such as the district and unitary councils. The Chairman had invited the Hampshire and Isle of Wight Local Government Association to nominate two new representatives, one for the 11 Hampshire district councils and one for the two cities.

RESOLVED:

That the Chairman's action in inviting the Hampshire and Isle of Wight Local Government Association to nominate two voting representatives, one to represent the city unitary authorities and one to represent the district councils, be endorsed.

143 REVIEW OF BUSINESS PLAN AND TRAINING

The Panel considered a report of the County Treasurer (Item 7 in the Minute Book) updating the Fund's business plan including progress on the action plan. A summary of the training session held in October 2004 was also provided, together with information on future training opportunities available to Panel Members.

RESOLVED:

(i) That the revised business plan be approved.

(ii) That progress on the action plan be noted.

(iii) That Panel members consider the courses listed in Appendix 3 of the report and contact the County Treasurer if they wished to attend any of them.

144 MANAGERS' FEES AND TRANSACTION COSTS

The Panel noted a report of the County Treasurer (Item 8 in the Minute Book) on the fees paid to the Fund's investment managers and the transaction costs incurred by them in the year to 30 September 2004. Excluding property, both fees and transaction costs were lower than in the previous year as percentages of the funds under management. Property costs were higher reflecting two large property sales during the year and refurbishment work on other properties.

145 "FACING THE FUTURE" - THE GOVERNMENT'S CONSULTATION PAPER ON A NEW LOOK LOCAL GOVERNMENT PENSION SCHEME

The Panel considered a report of the County Treasurer (Item 9 in the Minute Book) regarding the Government's consultation on a new-look Local Government Pension Scheme (LGPS) to be introduced on 1 April 2008. The Panel supported moves to encourage lower paid and younger employees to join the Pension Fund. They expressed concern about the Government's proposals for banded employee contribution rates, taking the view that anomalies in the taxation system should not be resolved solely within the LGPS.

The Panel supported an increase in employees' contributions from 6% to 7% on pay but took the view that the increase should not be delayed until 2008/09. They were also concerned that the imbalance between employers' and employees' contributions would not be redressed, even after the increase in employees' contributions to 7%, if the proposed improvements in benefits were implemented.

A further response to the Government will be made before the final deadline of 31 March 2005 after seeking the views of the Director of Human Resources.

RESOLVED:

That, in conjunction with the Chairman, an initial response to the Government's consultation be made by County Treasurer as set out in the report and reflecting the Panel's comments at the meeting.

146 DRAFT LOCAL GOVERNMENT PENSION SCHEME AND MANAGEMENT OF INVESTMENT OF FUNDS (AMENDMENT) REGULATIONS 2005

The Panel considered a report of the County Treasurer (Item 10 in the Minute Book) on draft regulations issued by the Government for consultation. The regulations, which were due to come into force on 1 April 2005, would increase the percentage limit on the value of stocks that can be lent to brokers in return for commission. The Panel were concerned that stocks lent by the Fund could be used by hedge funds or similar organisations in ways that would be disadvantageous to pension funds.

The Panel welcomed a new requirement in the regulations for the Statement of Investment Principles (SIP) to include a statement of the Fund's policy on representation on the Panel and the new duty to prepare a policy statement for its communication strategy with employers and employees. The Panel took the view that the communication strategy should be included in the SIP and should not be a separate document.

RESOLVED:

(i) That the County Treasurer report to the Panel in June 2005 on whether stocklending by the Fund could be limited to organisations that agree not to use the stocks for activities that disadvantage pension funds.

(ii) That a response be submitted to the Government on the draft regulations as set out in the Appendix to the report.

(iii) That the remainder of the report be noted.

147 FIRST REPORT OF THE PENSIONS COMMISSION

The Panel noted a report of the County Treasurer (Item 11 in the Minute Book) on the first report of the Government's Pensions Commission. The report was largely descriptive. The Commission's second report, planned for October 2005, will include policy recommendations.

148 PART-TIME PENSION CLAIMS - UPDATE

The Panel noted a report of the County Treasurer (Item 12 in the Minute Book) detailing progress on resolving pension claims from part-time workers in the Local Government Pension Scheme following a ruling in 1994 by the European Court of Justice.

149 EXCLUSION OF PRESS AND PUBLIC

RESOLVED:

That, by virtue of paragraph 7 of Part 1 of Schedule 12A of the Local Government Act 1972, the press and public were excluded from the meeting for the following items of business.

150 COMPARISON OF PERFROMANCE WITH OTHER LOCAL AUTHORITY PENSION FUNDS (CONFIDENTIAL)

The Panel considered a confidential report of the County Treasurer (Item 14 in the Minute Book) comparing the investment returns of the Hampshire Pension Fund and other funds over various periods since 1991.
[SUMMARY OF A MINUTE WHICH CONTAINS CONFIDENTIAL INFORMATION]

151 PROPERTY (CONFIDENTIAL)

The Panel considered a confidential report of the County Treasurer (Item 15 in the Minute Book) on the Fund's property portfolio.