Archived decisions
AT A MEETING of the PENSION FUND PANEL held at The Castle, Winchester on 20 September 2005.
PRESENT:
Councillors: T.K. Thornber (Chairman); F.G. Allgood; M.F. Cartwright;
A.G. Dowden; M.N. Kemp-Gee; A.R. Ludlow; J.J.W. Maxwell.
Co-opted members:
Councillor I.R. Carr (Test Valley Borough Council).
Mr E.W. Hughes (pensioners' representative).
Mr D. Offord (contributors' representative).
Independent adviser: Mr H. Cole.
Apologies for absence were received from Councillors B.D. Dash, P.R.C. Hutcheson and T. Blair (co-opted member from Portsmouth City Council).
28 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.
Councillor T.K. Thornber and Mr E.W.Hughes declared a pecuniary interest in Equitable Life, in connection with the report on Equitable Life Investments (Minute 35 below refers).
29 CHAIRMAN'S COMMUNICATIONS
No Chairman's communications were received.
30 DEPUTATIONS
No deputations were received.
31 MINUTES
Subject to noting that Councillors T.K. Thornber, F.G. Allgood, M.N. Kemp- Gee and I.R. Carr had been unable to attend the meeting held on 8 June 2005 and had offered their apologies, the Minutes of that meeting were confirmed as a correct record and signed by the Chairman.
Matters arising thereon:
Property - Update (Minute 20)
The County Treasurer reported that the purchase of the office building in Tunbridge Wells had been completed. As the Fund wished to be fully invested in property in current market conditions, Cordea Savills had been instructed to complete their proposed acquisition strategy before actively marketing any of the Fund's existing properties.
32 LOCAL GOVERNMENT PENSION SCHEME (AMENDMENT) REGULATIONS 2005 - REVOCATION OF CHANGES MADE ON 1 APRIL 2005
The Panel considered a report of the County Treasurer (Item 5 in the Minute Book) concerning the Government's revocation of significant changes to the Local Government Pension Scheme which had originally come into effect on 1 April 2005. The Fund's actuary had been asked to quantify the cost to the Fund of the revocation of these changes. This information had been requested by the Government for a Tripartite Committee of the Government, employers and trade unions set up to consider the long-term future of the Scheme. The actuary had also been asked to prepare a roll-forward interim valuation of the Fund as at 31 March 2005. A formal revised actuarial certificate had not been requested on the basis that the Government would introduce further changes that would offset the additional costs for employers from April 2006.
RESOLVED:
(i) That the Government's revocation of the changes to the Local Government Pension Scheme made with effect from 1 April 2005 be noted.
(ii) That the County Treasurer's action under delegated powers in commissioning the actuary to carry out an assessment of the costs of the revocation and an interim valuation as at 31 March 2005 be endorsed.
33 NEW TAX REGIME FOR PENSION SCHEMES
The Panel considered a report of the County Treasurer (Item 6 in the Minute Book) on a consultation by the Office of the Deputy Prime Minister on changes to the Local Government Pension Scheme to take advantage of a new tax regime for pension schemes from 6 April 2006. The changes would increase the amount of tax relief available on pension contributions and benefits. An extra tax would apply if a persons' benefits are valued for tax purposes at over £1.5m.
RESOLVED:
That the Office of the Deputy Prime Minister's proposals for adopting new tax regime limitations in the Local Government Pension Scheme which allow contributors more flexibility to save more for retirement by paying extra contributions and buying extra benefits be welcomed on behalf of the County Council, provided that they do not increase the employers' costs.
34 PENSIONS FOR CIVIL PARTNERS
The Panel considered a report of the County Treasurer (Item 7 in the Minute Book) on a consultation by the Office of the Deputy Prime Minister (ODPM) on proposals to implement in the Local Government Pension Scheme the requirement of the Civil Partnership Act 2004 that occupational pension schemes must pay pensions to surviving civil partners of scheme members, just as they must for surviving spouses. Same-sex couples may register as civil partners under the Act from December 2005. A half-rate pension would be payable to a surviving registered civil partner if a member of the Scheme dies, for service from 6 April 1988.
The ODPM had also asked whether service from 1 April 1972 to 5 April 1988 should also be counted the civil partner's benefits, provided the full cost for the period is met by the scheme member.
RESOLVED:
That the report be noted and, as the ODPM's proposals for amending the Local Government Pension Scheme to pay pensions to civil partners will add to employers' costs, that the ODPM be advised that any further back-dating must be solely at the cost of the scheme members concerned.
35 EQUITABLE LIFE INVESTMENTS
The Panel considered a report of the County Treasurer (Item 8 in the Minute Book) regarding advice from the Fund's actuary that members paying Additional Voluntary Contributions to Equitable Life's with-profits and deposit funds should transfer their investments to an alternative provider in the light of concern about the effect on such funds if Equitable Life were to become insolvent. With-profits investors would suffer a penalty if they withdraw money from Equitable Life, in addition to the normal bid-offer spread. Equitable Life investors would be informed by the County Treasurer of the risk of not transferring their investments.
RESOLVED
(i) That Additional Voluntary Contributions, invested in Equitable Life, should only be transferred to an alternative provider with the prior consent of the individual member.
(ii) That the County Treasurer write to the Panel giving details of the number of Scheme members with investments with Equitable Life.
36 GLOBAL CUSTODY
The Panel considered a report of the County Treasurer (Item 9 in the Minute Book) on proposals to undertake a tender exercise for the appointment of a global custodian for the Fund's investments. The County Treasurer outlined the advantages of a single company providing custodial services across all the Fund's investment managers, particularly in terms of flexibility when changes in investment management arrangements were necessary. Specialist advice was necessary on the tendering process to avoid the risk of incurring hidden charges by the appointed global custodian.
RESOLVED
(i) That the County Treasurer undertake a tender exercise for the appointment of a global custodian, with a view to making a final recommendation to the Panel at its meeting on 26 May 2006.
(ii) That Hewitt Bacon & Woodrow be commissioned to provide assistance with the process as necessary at a cost of £25,000.
37 EXCLUSION OF PRESS AND PUBLIC
RESOLVED:
That, by virtue of paragraph 7 and 9 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.
38 APPOINTMENT OF BRAMDEAN ASSET MANAGEMENT AS ADVISERS (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 11 in the Minute Book) regarding the appointment of Bramdean Asset Management as advisers.
[SUMMARY OF A MINUTE WHICH CONTAINS CONFIDENTIAL INFORMATION]
39 SALE OF DEUTSCHE ASSET MANAGEMENT TO ABERDEEN ASSET MANAGERS (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 12 in the Minute Book) regarding the sale of Deutsche Asset Management to Aberdeen Asset Managers.
[SUMMARY OF A MINUTE WHICH CONTAINS CONFIDENTIAL INFORMATION]