Contact: David Wilson, ext 7407

1 Introduction

1.1 The Panel considered a report by the County Treasurer on the draft Local Government Pension Scheme and Management and Investment of Funds (Amendment) Regulations at its meeting on 23 November 2004. As reported in the previous item on this agenda, these regulations were intended to take effect on 1 April 2005. However, the Government placed them in abeyance to allow time for further consideration of the changes and the development of best practice advice.

1.2 The Panel is reminded that these are entirely separate regulations from the Local Government Pension Scheme (Amendment) (No 2) Regulations 2004, which the Government now plans to revoke, as reported to the Panel's last meeting on 26 May 2005.

1.3 The regulations would have included a requirement for the Fund to include within its Statement of Investment Principles (SIP) a Representation Policy Statement (RPS) by October 2005. Although the regulations are now in abeyance, it would be prudent to approve a suitable statement now, ensuring that the Fund continues to comply fully with good practice.

1.4 This report sets out a draft RPS for consideration and approval by the Panel, for inclusion in the SIP.

1 Content

1.1 The RPS should cover the following areas, assuming the regulations are finally enacted as drafted:

· The delegation by the County Council of its functions with regard to the Fund to the Pension Fund Panel, reporting to the County Council via the Governance Committee.

· The normal frequency of Panel meetings.

· The Panel's terms of reference, structure and operational procedures.

· Arrangements with regard to representation for the Fund's members and participating employers.

1.2 A revised Statement of Investment Principles including a draft RPS is attached at Appendix 1. The new section is shown in italics to highlight the changes. It expands on the former section in the SIP describing, relatively briefly, the Panel's role. The remainder of the SIP remains virtually unchanged, although there has also been some re-ordering of the sections. The full SIP is included so that the Panel can see the context of the RPS.

1.3 The Panel should note that, although previously the employee and pensioner representatives have had observer rights only, it is suggested here that they be given equal status with the Panel's other members and be granted full voting rights. The county councillors on the Panel would still hold an overall majority.

Recommendations

1 That the Panel approve the updated Statement of Investment Principles, which incorporates the Fund's Representation Policy Statement.

2 That the employee and pensioner representatives be granted full voting rights.

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:

1. Published works.

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

TITLE FILE

None.