Contact: David Wilson, ext 7407

1. Background

1.1 Representation for the city unitary authorities, district councils and other member employers on the Pension Fund Panel was last considered in July 2002. The Local Government (Committees and Political Groups) (Amendment) Regulations 1998 had come into effect in September 1998, and gave administering authorities discretion to appoint voting representatives from both the unitary and district councils to their investment panels.

1.2 At its July 2002 meeting, the Panel chose not to exercise this discretion, for four main reasons:

· Responsibility for the Fund remained clearly with the County Council as administering authority, it was felt that the decision-making Panel should comprise County Council members only.

· The Annual General Meeting held in September of each year provided ample opportunity for employers to express their views.

· Allowing representation for too many employers could mean that the Panel would become unwieldy.

· There had been little pressure from other employers for such representation beyond informal enquiries from the two city unitary authorities.

1.3 This report summarises recent developments relevant to this issue, and recommends that the Chairman's action in inviting the Hampshire and Isle of Wight Local Government Association (HIOWLGA) to nominate two representatives, one for the city and unitary authorities, and one for the 11 district councils, be endorsed.

2. Recent developments

2.1 In the spring of this year, the Government issued a preliminary discussion paper suggesting that regulations could be put into effect requiring that each member employer in the Fund would be entitled to at least one elected member representative on the Panel. This was followed up in discussions between the Government and the Society of County Treasurers in May 2004, when concern was expressed by the Government about administering authorities who had so far chosen to co-opt no such representatives. The Government also made clear at that meeting that they were not suggesting that each employer should have its own individual representative. Instead administering authorities should consider appointing single representatives for groups of authorities - in the case of the Hampshire Fund these groups could be the city unitary authorities and the 11 districts.

2.2 The draft Local Government Pension Scheme and Management and Investment of Funds (Amendment) Regulations 2005 (see item 10 on this Agenda) propose that administering authorities should be required to include Representation Policy Statements in their Statements of Investment Principles from October 2005. These should include details of representation arrangements on investment panels. These regulations will inevitably lead to increased pressure from other employers for representation.

2.3 The matter was discussed further at the Annual General Meeting of the Hampshire and Isle of Wight Local Government Association in July this year. Following that meeting the Chairman wrote to the Association inviting them to nominate two new representatives to serve on the Panel, one from the city unitary authorities, and one from the 11 districts.

2.4 The Leaders of Portsmouth and Southampton City Councils are currently liaising to agree who should be their representative. Once they have decided on their nominee, the Association's Appointments Panel will decide on a representative for the 11 districts. The County Treasurer will keep Panel members updated on progress.

2.5 The existing pensioner and employee representatives will continue to serve on the Panel, without voting rights.

3. Training

3.1 It is proposed that the new representatives will be co-opted on to the Panel in May 2005, after the County Council elections. It will be necessary to arrange suitable training for both the new representatives and any other new Panel members appointed following the elections. A list of training opportunities in 2005 is shown in Appendix 3 of the report at item 7 on this Agenda.

Recommendations

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

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

Published works.

Documents which disclose exempt or confidential information as defined in the Act.

TITLE FILE

None.