Archived decisions

AT A MEETING of the PENSION FUND PANEL held at The Castle, Winchester on Friday 16 November 2007.

Chairman:

p Councillor T.K. Thornber, CBE

Vice Chairman:

p Councillor M.F. Cartwright

Councillors:

a F.G. Allgood a M.N. Kemp-Gee

p B.D. Dash p A.R. Ludlow

a A.G. Dowden p J.J.W. Maxwell

p P.R.C. Hutcheson

Co-opted members:

a Councillor I.R. Carr (Test Valley Borough Council)

p Councillor P. Giddings (deputy in place of Councillor Carr)

p Councillor J. Moulton (Southampton City Council)

p Mr E.W. Hughes (pensioners' representative)

p Mr P Reynolds (employee representative)

Independent adviser:

p Mr H. Cole.

172 APOLOGIES FOR ABSENCE

Councillors F.G. Allgood, A.G. Dowden, M.N. Kemp-Gee and I.R. Carr gave their apologies. Councillor A.G. Dowden was attending a Hampshire Action Team meeting.

173 DECLARATIONS OF INTEREST

All Members who believe they have a personal or prejudicial interest in any matter to be considered at the meeting must declare that 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 is discussed, save for exercising any right to speak in accordance with paragraph 12 of the Code. The declaration should be made at the time of the relevant debate.

174 CHAIRMAN'S COMMUNICATIONS

No Chairman's communications were received.

175 DEPUTATIONS

No deputations were received.

176 MINUTES

The Minutes of the meeting held on 2 November 2007 were confirmed as a correct record and signed by the Chairman.

177 DEPUTY REPRESENTATIVE OF HAMPSHIRE DISTRICT COUNCILS

The Panel considered a report of the County Treasurer (Item 6 in the Minute Book) regarding the appointment of a deputy for the representative of the Hampshire district councils. The Hampshire and Isle of Wight Local Government Association had nominated Councillor Peter Giddings of Test Valley Borough Council.

RESOLVED:

(a) That the nomination of Councillor Peter Giddings as the deputy representative of the Hampshire district councils be agreed.

(b) That the remainder of the report be noted.

178 PENSION FUND ANNUAL GENERAL MEETING 2007

The Panel received and noted a report of the County Treasurer (Item 7 in the Minute Book) summarising the Pension Fund's tenth AGM held at Sparsholt College on 17 September 2007. Attendance at the 2007 AGM was higher than in 2006, with all the major employers represented. The AGM continued to play an important role in the Fund's communications strategy, alongside the annual report, the annual leaflet for pensioners and contributors, and the pensioners' newsletter.

179 REGULATIONS TO IMPROVE THE ADMINISTRATION AND GOVERNANCE OF THE LOCAL GOVERNMENT PENSION SCHEME

The Panel considered a report of the County Treasurer (Item 8 in the Minute Book) concerning changes to the administration of the Fund following the Local Government Pension Scheme (Amendment) (No3) Regulations 2007. The regulations required Funds to publish a governance compliance statement and the Government had issued draft best practice principles for the contents of these compliance statements, for consultation. The Panel considered the differences between the principles and the Fund's existing practice. These included the suggestion that admitted bodies, the education sector and deferred members should be represented on the Pension Fund Panel. In addition, the principles would require the Panel to have an independent professional observer and hold quarterly meetings. The County Treasurer had responded to the consultation to meet the Government's deadline.

The regulations required Funds to publish a pension fund annual report. The Fund already complied with this requirement. The regulations also gave Funds the discretionary power to publish a pension administration strategy and extended the power of administering authorities to recover costs from employing authorities.

RESOLVED:

(a) That, in the light of the Government's best practice principles for governance of the Pension Fund, no action be taken to invite admitted bodies or the education sector to nominate a representative on the Pension Fund Panel.

(b) That the role of the employees' representative be widened to include deferred members.

(d) That the existing pattern of twice-yearly meetings of the Pension Fund Panel be retained in preference to quarterly meetings.

(e) That the County Treasurer's response to the Government's consultation on governance compliance statements be endorsed.

(f) That, subject to any comments the Panel may have, the County Treasurer be authorised to amend the Fund's governance policy statement and draw up a governance compliance statement, as set out in the report, and submit it to the Secretary of State by 1 March 2008.

(g) That the County Treasurer be authorised to prepare a pension administration strategy following consultation with the employing authorities.

(h) That the remainder of the report be noted.

180 LOCAL GOVERNMENT PENSION SCHEME - PENSIONS ADMINISTRATION UPDATE

The Panel considered a report of the County Treasurer (Item 9 in the Minute Book) giving an update on the `new look' Local Government Pension Scheme and other pensions administration matters. The Communities and Local Government (CLG) department had made little further progress since May 2007 on issuing the three sets of regulations on the `new look' Scheme which is due to be introduced from 1 April 2008. The CLG hoped to have all the legislation in place by the end of December 2007.

The CLG had consulted on a proposal to extend full protection for contributors affected by the removal of the 85 year rule to 2020, instead of 2016 with tapering protection to 2020. The County Council's response did not support the proposed extension.

The CLG had also consulted on proposals to allow employers to augment service up to six months after an employee had left. This would be consistent with the previous arrangements.

Following Southampton City Council's outsourcing of services to Capita Business Services from 1 October 2007, arrangements had been agreed with the City Council and the Fund's actuary concerning the impact on the Pension Fund. This had established several key principles for dealing with future outsourcing arrangements.

RESOLVED:

(a) That the current position on implementing the new-look Scheme be noted.

(b) That the County Treasurer reports in full to the Panel when all three parts of the proposed legislation on the new look Scheme are in place.

181 ACTUARIAL VALUATION AT 31 MARCH 2007 - UPDATE

The Panel received and noted a report of the County Treasurer (Item 10 in the Minute Book) regarding progress on the Fund's actuarial valuation at 31 March 2007. The actuary Hewitt had provisionally calculated that the employers' contribution rate should increase in steps from 17.6% in 2007/08 to 19.1% in 2010/11. Hewitt continued to work on the figures and was expected to confirm the recommendations by the end of November 2007.

182 REVIEW OF THE FUND'S BUSINESS PLAN

The Panel considered a report of the County Treasurer (Item 11 in the Minute Book) reviewing the Fund's business plan. Progress against the action plan in the current business plan had either been completed or was on target. Few changes were necessary to the business plan itself, apart from updating the action plan to cover actions in the period to March 2010.

RESOLVED:

(a) That the updated business plan be approved.

(b) That the progress on the action plan be noted.

183 REVIEW OF STATEMENT OF INVESTMENT PRINCIPLES

The Panel considered a report of the County Treasurer (Item 12 in the Minute Book) reviewing the Fund's Statement of Investment Principles. Only minor changes were necessary to reflect developments over the last year.

RESOLVED:

That the updated Statement of Investment Principles be approved.

184 REVIEW OF THE FUNDING STRATEGY STATEMENT

The Panel considered a report of the County Treasurer (Item 13 in the Minute Book) reviewing the Fund's Funding Strategy Statement. It had been updated to reflect developments over the last year. The amendments were minor and did not affect the fundamental content and meaning of the Statement.

RESOLVED:

That the updated Funding Strategy Statement be approved.

185 EXCLUSION OF PRESS AND PUBLIC

RESOLVED:

That the public be excluded from the meeting during the following items of business, as it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during those items there would be disclosure to them of exempt information within Paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972, and further that in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, for the reasons set out in the reports.

186 INVESTMENT MATTERS - UPDATE INCLUDING RECENT PERFORMANCE RETURNS (EXEMPT)

The Panel received and noted an exempt report of the County Treasurer (Item 15 in the Minute Book) on the recent performance of the Fund's investment managers.
[SUMMARY OF A MINUTE WHICH CONTAINS EXEMPT INFORMATION]

187 MANAGERS' FEES AND TRANSACTION COSTS IN 2006/07 (EXEMPT)

The Panel received and noted an exempt report of the County Treasurer (Item 16 in the Minute Book) regarding management fees and transaction costs incurred by the Fund in 2006/07.
[SUMMARY OF A MINUTE WHICH CONTAINS EXEMPT INFORMATION]

188 ALTERNATIVE INVESTMENTS PORTFOLIO - UPDATE (EXEMPT)

The Panel considered an exempt report of the County Treasurer (Item 17 in the Minute Book) giving an update on the alternative investments portfolio.
[SUMMARY OF A MINUTE WHICH CONTAINS EXEMPT INFORMATION]

189 PROPERTY PORTFOLIO - UPDATE (EXEMPT)

The Panel received and noted an exempt report of the County Treasurer (Item 18 in the Minute Book) giving an update on the property portfolio.
[SUMMARY OF A MINUTE WHICH CONTAINS EXEMPT INFORMATION]

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