Contact: Dave Wilson, (01962 847407); [email protected]

1. Introduction

1.1 The Pension Fund's business plan provides for a review of its Statement of Investment Principles (SIP) by the Panel at this meeting, and annually thereafter.

1.2 A revised draft of the SIP is attached at Appendix 1. Significant changes are highlighted in italics.

2. Summary of changes

2.1 The main changes are:

· Alterations to reflect the completion of the investment management review and the new arrangements to be put in place by 1 January 2007.

· Amendments required as a result of the appointment of Northern Trust as the Fund's global custodian.

· Changes needed to reflect Bramdean Asset Management's new role, the ongoing tender process for a longer term adviser on alternative investments.

· Reference to the intention to consider appointing advisers on currency overlay and tactical asset allocation.

2.2 This SIP forms an Appendix to the Fund's Funding Strategy Statement, which was approved at the Panel's meeting on 3 November 2004.

2.3 It may need to be revised when the outcome of the ongoing review of fund management arrangements has been completed.

Recommendation

1 That the Panel approve the draft updated Statement of Investment Principles.

Section 100 D - Local Government Act 1972 - background documents

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

NB: The list excludes:

None.