Contact: David Wilson, ext 7407

1. Introduction

1.1 The Pension Fund Panel considered a report from the County Treasurer on training requirements and opportunities at its first meeting following the elections in May 2005. The Panel agreed to consider the training options set out in the Appendices to that report, and pass their requirements to the County Treasurer for action. It was also agreed that the County Treasurer should arrange a half-day training session for the Panel to be presented by Capital International.

1.2 This report summarises progress made since then.

2. The Local Government Pensions Committee (LGPC) `LGPS Fundamentals 2005' course

2.1 County Councillors Allgood, Cartwright, Kemp-Gee, Ludlow and Maxwell have all attended the first two days of this three-day course, which is specifically designed for elected members with responsibility for local authority pension funds.

2.2 On day 1 of the course, presentations were given covering the following:

· A history of pension provision in the UK, including brief details of the earliest pension schemes established as long ago as the 17^th century, the development of pension provision in the public sector since then.

· A comprehensive description of the current Local Government Pension Scheme, including the benefit structure.

· The Government's principles for the management of defined benefit schemes drawn up in 2002 following the Myners Report.

· Corporate governance, including the principles contained in the Stock Exchange's Combined Code published in 2003, voting policies and ways of engaging with companies to promote corporate good practice and social responsibility.

· The characteristics of equities and bonds, including how they are valued by markets, criteria used when making investment decisions, and fund management styles (`growth' managers compared with `value' managers).

2.3 Day 2 of the course was considerably more technical. Major areas covered were:

· The principles of actuarial valuations and funding strategy statements (presented by the Fund's actuary, Tim Lunn of Hewitt).

· Asset/liability studies and setting benchmarks.

· Methods of communication with the Fund's employers, pensioners and contributors.

· Detailed descriptions of derivatives - forward contracts, futures and options.

· Brief outlines of hedge funds and ways of investing in private equity.

2.4 The topics were generally well presented. Although some of the areas have been covered in some detail in previous reports to the Panel, the sessions have proved very useful for those who attended. The final session takes place in London on 29 November 2005.

3. Capital International's second training session held in September 2005

3.1 Capital International's second training session for Panel members was held on 30 September 2005. The programme for the session was as follows:

· Introduction to asset classes

· Measuring portfolio risk and the skill of investment managers

· Assessing investment managers.

3.2 The presentations were well received by the Panel members and officers present. Copies of the presentation booklet can be made available to members who missed the session.

4. Barings' `A Trustees' Guide to Investment Management'

4.1 Enclosed with this Agenda is a copy of a Guide for Trustees prepared by the fund managers Barings. Members may find this a useful reference paper, particularly the glossary at the end which demystifies much of the jargon used by investment managers.

Recommendation

1 That the Panel note this report.

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.