Archived decisions
AT A MEETING of the PENSION FUND PANEL held at The Castle, Winchester on Friday 25 November 2005.
PRESENT:
p Councillor T.K. Thornber (Chairman)
p Councillor M.F. Cartwright (Vice-Chairman)
Councillors:
p F.G. Allgood p M.N. Kemp-Gee
p B.D.Dash p A.R. Ludlow
p A.G. Dowden p J.J.W. Maxwell
p P.R.C. Hutcheson
Co-opted members:
p Councillor T. Blair (Portsmouth City Council)
a Councillor I.R. Carr (Test Valley Borough Council)
p Mr E.W. Hughes (pensioners' representative)
p Mr D. Offord (contributors' representative)
Independent adviser:
p Mr H. Cole.
48 APOLOGIES FOR ABSENCE
Apologies for absence were received from Councillor I.R. Carr.
49 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.
50 CHAIRMAN'S COMMUNICATIONS
No Chairman's communications were received.
51 DEPUTATIONS
No deputations were received.
52 MINUTES
The Minutes of the meeting held on 11 November 2005 were confirmed as a correct record and signed by the Chairman.
53 COSTS OF REVOCATION OF THE CHANGES TO THE SCHEME ON 1 APRIL 2005
The Panel noted a report of the County Treasurer (Item 6 in the Minute Book) that showed that the Fund's actuary Hewitt Bacon & Woodrow had estimated the costs to the Fund of the Government's decision to revoke its earlier abolition of the 85-year rule from 1 April 2005 was 1.7% of pensionable pay or £11.7m a year. Under the 85-year rule, employees could retire at 60, with no reduction of pension, if their age plus completed years of service exceeded 85 years. This information had been passed to the Tripartite Committee of the Deputy Prime Minister, employers and trade unions, as required by the Government.
The actuary had also carried out an interim valuation of the Fund at 31 March 2005 which showed that the funding level had fallen from 69% to 66%. This information had been forwarded to the Government.
The County Treasurer reported that the Tripartite Committee was expected to issue a consultation paper shortly on proposals to cover the costs of revocation and that a further consultation paper was expected in 2006 on the `new look' Local Government Pension Scheme.
54 HAMPSHIRE PENSION FUND - REVIEW OF BUSINESS PLAN
The Panel considered a report of the County Treasurer (Item 7 in the Minute Book) reviewing the Fund's business plan which had been updated to reflect developments since the last review in November 2004. The County Treasurer also reported on progress over the last year on the action plan.
RESOLVED:
(i) That the revised business plan be approved.
(ii) That progress on the action plan be noted.
55 REVIEW OF STATEMENT OF INVESTMENT PRINCIPLES
The Panel considered a report of the County Treasurer (Item 8 in the Minute Book) updating the Fund's Statement of Investment Principles for developments since the last review in November 2004.
RESOLVED:
That the updated Statement of Investment Principles be approved.
56 PENSION FUND CASH POSITION
The Panel considered a report of the County Treasurer (Item 9 in the Minute Book) showing that the Fund's cash balances were expected to rise to around £75m by 1 April 2006 and £133m by 1 April 2007. A balance of around £20m was necessary for cashflow purposes. The remaining balance could be transferred to the Fund's investment managers or held on deposit with the County Council pending the outcome of the ongoing review of the Fund's investment management arrangements, expected in the summer 2006. The Panel were concerned about the need to remain fully invested but agreed that surplus cash should be retained for the next six months to avoid the potential double transaction costs if managers' holdings are changed and to provide flexibility for additional investment after the review of investment management arrangements.
RESOLVED:
That the projected increases in the Fund's cash balances be held on deposit with the County Council pending the outcome of the review of the Fund's management arrangements and that the Fund's investment managers be asked not to hold unusually high levels of cash balances themselves during that period.
57 TRAINING UPDATE
The Panel noted a report of the County Treasurer (Item 10 in the Minute Book) regarding training received by the Panel since the elections in May 2005. This included attendance by five members at a three-day course run by the Local Government Pensions Committee and a training session for the full Panel run by Capital International. A guide for trustees on investment management published by the fund managers Barings had also been circulated to the Panel. It was agreed that the training programme had been comprehensive and well received, with Panel members fully competent to undertake their roles.
58 PENSION FUND ANNUAL GENERAL MEETING
The Panel considered a report of the County Treasurer (Item 11 in the Minute Book) regarding the Fund's eighth Annual General Meeting held on 22 September 2005. Whilst attendance was slightly down on the previous year, the meeting was considered a success, including the new venue at Sparsholt College of Agriculture. It was an important part of the Fund's overall communications strategy.
RESOLVED:
(i) That the booking of Westley Court at Sparsholt College of Agriculture for the next Annual General Meeting on Monday 18 September 2006 be approved.
(ii) That the remainder of the report be noted.
59 EXCLUSION OF PRESS AND PUBLIC
RESOLVED:
That, by virtue of paragraph 7, 9 and 12 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.
60 MANAGERS' FEES AND TRANSACTION COSTS (CONFIDENTIAL)
The Panel noted a confidential report of the County Treasurer (Item 13 in the Minute Book) summarising the fees paid to the Fund's investment managers in the year to 30 September 2005 and the transaction costs of brokerage and stamp duty over that period.
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61 POSSIBLE TAX RECLAIM FROM HM REVENUE AND CUSTOMS (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 14 in the Minute Book) on two possible claims for a refund of notional tax paid on the Fund's overseas dividends.
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62 PROPERTY (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 15 in the Minute Book) on property issues that had arisen over the last six months.
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63 TENDERS FOR THE PROVISION OF INDEPENDENT PROPERTY VALUATION SERVICES (CONFIDENTIAL)
The Panel considered a confidential report of the County Treasurer (Item 16 in the Minute Book) on the result of a tender exercise for the supply of independent property valuation services for the Fund.
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64 OPTIONS FOR NEW INVESTMENT MANAGEMENT STRUCTURE FROM OCTOBER 2006 (CONFIDENTIAL)
The Panel considered confidential reports of the County Treasurer (Item 17a in the Minute Book) and Mr Harvey Cole the Fund's independent adviser (Item 17b in the Minute Book) on the options for the Fund's future investment management structure. The Panel also received confidential reports and presentations from the Fund's actuary Hewitt Bacon & Woodrow and advisers Bramdean Asset Management (Items 17c and 17d in the Minute Book).
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