Agenda and minutes

To note any changes to the membership of the Committee.

There were no changes to the membership of the Committee.

To note the attendance of any non-members of the Committee.

Barry Reed, Local Pension Board member, and Cllr Dick Tonge, Cabinet Member for Finance, were in attendance. 

To receive any apologies for absence or substitutions for the meeting.

Apologies for absence were received from: Linda Stuart, Sue Eley, Cllr Steve Weisinger and Howard Pearce (Local Pension Board Chairman).

To confirm the Part 1 minutes of the meeting held on 29 September 2016 and the special meeting held on 13 October 2016.

Resolved:

To confirm the Part 1 minutes of the meeting held on 29 September 2016 subject to an amendment to minute item 68 to reflect that the Baillie Gifford performance fee was due to performance exceeding initial targets.

To confirm the Part 1 minutes of the meeting held on 13 October 2016.

To receive any declarations of disclosable interests or dispensations granted by the Standards Committee.

There were no declarations of interest.

To receive any announcements through the Chairman.

Members were advised that an investment training day was to be held on 19 January 2017 for Committee and Board members. The Chairman also updated that the Fund was currently 82% funded.

The Council welcomes contributions from members of the public.

Statements

If you would like to make a statement at this meeting on any item on this agenda, please register to do so at least 10 minutes prior to the meeting. Up to 3 speakers are permitted to speak for up to 3 minutes each on any agenda item. Please contact the officer named above for any further clarification.

Questions

To receive any questions from members of the public or members of the Council received in accordance with the constitution. Those wishing to ask questions are required to give notice of any such questions in writing to the officer named on the front of this agenda no later than 5pm on Thursday 8 December 2016 in order to be guaranteed of a written response. In order to receive a verbal response questions must be submitted no later than 5pm on Monday 12 December 2016.

Please contact the officer named on the first page of this agenda for further advice. Questions may be asked without notice if the Chairman decides that the matter is urgent. Details of any questions received will be circulated to Committee members prior to the meeting and made available at the meeting and on the Council’s website.

There were no members of the public present.

To consider the Part 1 minutes, and recommendations arising, from the Local Pension Board meeting held on 20 October 2016. The confidential minutes are attached to Part 2 of this agenda.

The Board’s current Work Plan is available here.

The minutes of the last Board meeting and its current work plan were circulated for Committee consideration. The Head of Pensions updated that members of the public had been in attendance at the last Board meeting to express concern about the Fund’s investments in fossil fuel. The officer advised that the Chairman has responded in writing about the Fund’s approach to fossil fuel investment and the Fund’s Position Statement on Fossil Fuel Divestment had since been published on the website. The Committee understood that the Fund did not hold much investment in fossil fuels and supported responsible investment in terms of the consideration of ESG outlined in its Statement of Investment Principles. It was noted that the Fund would review its Investment Strategy Statement in April 2017.

Resolved:

To note the minutes and recommendations arising from the LPB meeting held on 20 October 2016.

To note the current work plan of the Local Pension Board.

A report presents the Conflicts of Interest policy for the Local Pension Board that is reviewed annually by the Committee.

The Head of Pensions presented a Code of Conduct and Conflict of Interest Policy for the Local Pension Board which required annual review by the Committee. In was explained that the Board as a body was in support of the policy document however comments had been raised around the status of the policy and whether the requirements were reasonable. Legal opinion had been sought following the comments and the advice had confirmed that the policies were in line with guidance, Regulations and were similar to those used by other Funds. The policy was required to ensure the sound governance of the Board and members were expected to comply with the policy. The Chairman noted the advice of officers and comments raised at the Local Pension Board meeting. The Committee agreed the Board’s recommendation that the policy be updated to reflect the new status of the Scheme Advisory Board.

Resolved:

To approve the attached Code of Conduct and Conflict of Interest Policy Guidelines in relation to the LPB, as updated to reflect the status of the Scheme Advisory Board

A report is provided to update the Committee on the revised Stewardship Code statement that is included in the Statement of Investment Principles.

Catherine Dix, Strategic Pension Manager, updated on the Fund’s Stewardship Code Statement which had been revised in light of feedback from the Financial Reporting Council that the Fund had not met the expectations of the Stewardship Code. The revised statement had been assessed as Tier 1, meaning the Fund met the reporting expectations of the FRC in the way they disclose their stewardship responsibilities. The officer advised that the statement had not fundamentally changed but was a more detailed explanation of processes.

Resolved:

To note the update on the revised Stewardship Code Statement that is included in the Statement of Investment Principles.

A verbal update is provided by the Head of Pensions on the progress of the 2016 Triennial valuation and feedback from the consultation on the Funding Strategy Statement.

The Head of Pensions explained that the Fund’s officers had been working with employers to sign off their contribution rates; there was currently a 45% success rate. The contribution rates had to be agreed by the end of March 2017 and a further update would be provided to the Committee closer to the deadline.

The Committee also heard the outcome of the consultation of the Funding Strategy Statement amongst employer members. It was noted that only one response had been received by an academy which questioned the different deficit recovery period between academies and the Council. The Head of Pensions explained that this was the case since academies carried higher risk as they were not tax-raising bodies. The officer also advised that the Scheme Advisory Board had commissioned Pricewaterhouse Coopers (PwC) to research into the approach towards academies across the LGPS. The Committee agreed it would be sensible to review its approach to academies following the publication of this research.

Resolved:

To note the update on the progress of the 2016 Triennial valuation and feedback from the consultation on the Funding Strategy Statement.

To request that the Fund’s approach to academies in respect of deficit recovery periods be reviewed following the publication of the SAB research.

The Committee is asked to note the attached Risk Register and measures being taken to mitigate risks.

The Head of Pensions updated on two key changes to the Risk Register since the last report to Committee. PEN006b: ‘Significant rises in employer contributions for non-secure employers due to increases in liabilities’ had been moved from amber to green following the results of the 2016 triennial valuation. PEN011: ‘Lack of expertise of Pension Fund Officers’ had reduced from amber to green following the appointment of the Technical and Compliance Manager to cover the Benefits Manager’s maternity leave, with Hymans Robertson provided additional technical support over the next 6-9 months. The Committee was reassured that officers kept resourcing under continuous review and were confident that sufficient resource was available over the short term to ensure the core activities of the Fund were not neglected as a result of the extra work arising from asset pooling. Members noted that the Local Pension Board was also aware of the resource pressures currently on the Fund.

Resolved:

To note the attached Risk Register and measures being taken to mitigate risks.

A report presents the Full Business Case for the Brunel Pension Partnership in response to the Government’s Investment pooling consultation, and proposes recommendations to Council for the establishment of the Company for Committee approval. 

The Business Case and officer’s recommendation in respect of Brunel Pension Partnership were available for public inspection under Part 1 of the agenda.

To note that the next regular meeting of the Committee will be held on 23 March 2017.

The Committee noted the date of the next meeting was to be held on 23 March 2017.

Any other items of business which, in the opinion of the Chairman, should be considered as a matter of urgency. Urgent items of a confidential nature may be considered under Part II of this agenda.

There were no urgent items.

To consider passing the following resolution:

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Item Numbers 17 – 20  because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraphs 1 & 3 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

Resolved:

To agree that in accordance with Section 100A(4) of the Local Government Act 1972 to exclude the public from the meeting for the business specified in Minute number 108-111 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraphs 1 & 3 of Part I of Schedule 12A to the Act and the public interest in withholding the information outweighs the public interest in disclosing the information to the public.

The confidential supporting papers for the Full Business Case are circulated for Committee’s consideration.

Background documents are available as a Part 2 Agenda Supplement

The Treasurer to the Pension Fund introduced a proposal for the Committee to recommend to Full Council that the Fund enter into asset pooling arrangements as part of Brunel Pension Partnership, it was explained that the proposals sought to delegate to the Committee and to Officers, as appropriate, to authorise the work as it progressed.

The Committee considered the Business Case.

Resolved:

To thank officers for their dedication and hard work to support Brunel Pension Partnership.

To note the tax implications of asset pooling and to encourage that action be taken to mitigate this.

To recommend that the Chairman of the Pension Fund prioritise investment in client group interests through the Shadow Operations Board and that resource is made clear to the Committee following that discussion.

The Committee endorses the Full Business Case for Brunel Pension Partnership and recommends the following to Full Council:

In its capacity as the Administering Authority for the Wiltshire Pension Fund, and having received and reviewed the recommendation of the Wiltshire Pension Fund Committee on 15 December 2016 and the Business Case attached to it, Wiltshire Council hereby resolves to enter into investment pooling as part of the Brunel project with respect to the Wiltshire Pension Fund’s investments.

Such Resolution is made on and subject to the following terms and conditions:

a) That the Brunel Pension Partnership investment pool be developed, funded and implemented substantially in accordance with the terms and provisions described in the Business Case considered by the Pension Committee, and more particularly that:

•         a Financial Conduct Authority (FCA) regulated company to be named Brunel Pension Partnership Limited be established and operated with all necessary and appropriate arrangements as to its ownership, structure, governance and services capability.

•         a new supervisory body comprising representatives of the Council and all other participants in the Brunel Pension Partnership be established to ensure oversight of Wiltshire Pension Fund investments and participation in the Brunel Pension Partnership.

b) That subject to the continued viability of investment pooling, financial or otherwise Wiltshire Pensions Committee is authorised to undertake such tasks, after consideration of advice from its Chief Legal Officer, Chief Financial Officer and Pension Fund Manager, as it thinks appropriate to progress implementation of investment pooling. To take such decisions and do all other things deemed necessary in order to promote the interests of the Administering Authority with respect to pooling, which without limitation shall include agreeing and authorising any documentation, contracts, terms of reference, financial expenditure or investment that may be required consequential upon the Fund's participation in the Brunel Pension Partnership. For the avoidance of doubt this includes the right of the Pension Committee to authorise the Chief Legal Officer and Chief Financial Officer to take such steps as are necessary to progress the project.

c) That subject to the above, all such matters be carried out with the aim of achieving a target date for beginning investment pooling of 1 April 2018, and otherwise subject to such intermediate steps and timescales as may be  ...  view the full minutes text for item 108.

Three confidential reports are circulated updating the Committee on the performance of the Fund’s investments as to the end of September 2016.  These were considered by the Investment Sub-Committee at its meeting on 24 November 2016 and are circulated for information only.

The minutes of the Investment Sub-Committee are also attached for Committee consideration.

The Committee was presented with the latest investment reports and minutes of the Investment Sub Committee meeting held on 24 November 2016.

Resolved:

To note the reports on the Fund’s investments.

To note the minutes of the Investment Sub Committee meeting held on 24 November 2016.

The Part 2 minutes of the Local Pension Board meeting on 20 October 2016 are attached for Committee’s consideration.

The Part 2 minutes of the Local Pension Board meeting held on 20 October 2016 were circulated for Committee consideration.

Resolved:

To note the Part 2 minutes and recommendations arising from the LPB meeting held on 20 October 2016.

To confirm the Part 2 minutes of the meeting held on 29 September 2016 and the special meeting held on 13 October 2016.

Resolved:

To confirm the Part 2 minutes of the meeting held on 29 September 2016 subject to an amendment to minute item 68 to reflect that the Baillie Gifford performance fee was due to performance exceeding initial targets.

To confirm the Part 2 minutes of the meeting held on 13 October 2016.