Agenda and minutes

None.

None.

Apologies were received from Cllr Tony Deane, Mr Tim Jackson, Mrs Lynda Croft and Cllr Brian Ford.

To confirm the minutes of the meeting held on 23 May 2012.

The minutes of the meeting held on 23 May 2012 were presented. It was,

Resolved:

To approve as a true and correct record and sign the minutes.

Through the Chair, the Committee was updated on the progress of change to investment mandates previously agreed.

To receive any declarations of pecuniary or non-pecuniary interests or dispensations granted by the Standards Committee.

There were no declarations.

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 above, no later than 5pm on Wednesday 18July. 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.

The Committee noted the rules on public participation.

A report on the Fund’s income and expenditure for 2011-12 is circulated for members to note.

The Service Director (Finance) presented a Wiltshire Pension Fund Outturn Statement, outlining the Fund’s income and expenditure for the year 2011-2012, which he stated was in line with previous monitoring reports to the Committee.

It was,

Resolved:

To note the contents of the 2011-2012 Wiltshire Pension Fund Outturn Statement.

The draft annual report for 2011-12 is presented to members for approval.

The Service Director (Finance) presented the draft Wiltshire Pension Fund Annual Report and Financial Statements 2011-12, noting that it would not be fully completed until the audit of the Fund had been finalised before the 14 September 2012 meeting of the Committee after also going to Audit Committee on 07 September 2012.

The Committee noted with approval that the annual return of the Fund placed it 35^th out of 84 Local Authority funds within the WM Local Authority league table, up from 47^th for the year 2010-2011.

It was,

Resolved:

To approve the draft Wiltshire Pension Fund Annual Report and Financial Statements 2011-12, subject to the completion of the audit.

An update from the Director of Finance on the Wiltshire Pension Fund Risk Register is circulated for Members’ consideration.

The Head of Pensions updated the Committee on the Pension Fund Risk Register following the increased risks identified at the May 2012 meeting.

It was stated there had been no significant changes, but that the team restructuring should be completed within a few weeks as final places were filled, mitigating or resolving the risk of overreliance on key officers.

It was,

Resolved:

To note the update of the Risk Register and measures being taken to mitigate current high and medium risks.

A report from the Director of Finance requesting the Committee approve the annually updated SIP for 2012.

The Fund Investment and Accounting Manager presented a report on the annually updated Statement of Investment Principles (SIP), which she noted had been updated to reflect the recent Strategic Review of the Fund regarding asset allocation.

It was also noted that the SIP had also been updated to reflect the Six Myners Principles, and was compliant with all but Principle Four. To be fully compliant, it was stated that the implementation of a formal assessment of the Fund’s advisers to ensure cost, quality and consistency of the advice is monitored would be required.

It was,

Resolved:

To approve the 2012 Statement of Investment Principles (SIP).

A report outlining the proposed changes to the LGPS announced by the Local Government Employers and Unions on 31 May 2012 and supported by the Government which are currently being consulted on.

The Head of Pensions presented a report updating the Committee on the proposed reforms to the Local Government Pension Scheme (LGPS) following the announcement by the Local Government Employers (LGE) and the Unions, supported by the Government, on 31 May 2012.

It was clarified that the changed would apply from April 2014, with all pensions in payment or built up before that date protected. The main provisions proposed for the scheme were outlined as stated in paragraph Six of the agenda report, including but not limited to a change to the accrual rate from a 1/60^th to a 1/49^th scheme, the use of CPI as the revaluation factor of Career Average Revalued Earnings and that the average member contribution remaining the same at 6.5%, but that the rate would be determined on actual pay. 

The Head of Pensions stated that the proposed reforms were on balance a good deal for the Fund membership, and highlighted the impacts for employees at various ages as detailed in the report, and stressed the importance of communicating the changes to members.

A discussion followed, where the change in vesting period from three months to two years was queried. It was stated that the vesting period had been reduced in 2008 as a method to encourage fewer people to opt out from the scheme. The commitment to deficit reduction and worsening situation for bond yields and the implications for the Fund was raised, which may lead to the potential need to revise the stabilisation models if things deteriorated was further noted.

The Head of Pensions also noted that if the scheme were not approved, a short term increase in contributions would be likely as a new timescale for changes was organised.

At the conclusion of discussion, it was,

Resolved:

To note the proposed changed to the Local Government Pension Scheme reforms.

To note that the next regular meeting of the Committee will be held on Friday 14 September 2012.

The date of the next meeting was confirmed as Friday 14 September 2012.

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 16-17 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 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 Numbers 91-92 because it is likely that if members of the public were present there would be disclosure to them of exempt information as defined in paragraph 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.

A confidential report prepared by Mercers is circulated outlining a number of recommendations in relation to the fixed income asset allocation and potential allocations to either a opportunistic fund or emerging markets multi-strategy mandate.    

Joanne Holden (Investment Adviser – Mercers) presented a confidential report outlining potential investment options for Members to consider in relation to the on-going investment strategy review, as requested by the Committee at the 23 May 2012 meeting.

Following the report and debate on various investment strategy options, the Committee decided to defer a decision until the following minute item, the receipt of a report from Western Asset Management, had been concluded.

A confidential Annual Report from Western Asset Management is attached and Members are asked to consider this along with the verbal report at the meeting.

Paul Shuttleworth and Simon Gregory, representatives of Western Asset Management, presented a confidential report and presentation to the Committee on past and predicted performance of their mandate, and received questions on planned investment strategies and market and Fund analysis.

Resolved:

To thank the representatives from Western Asset Management for their presentation.

Following the receipt of the report and presentation from Western Asset Management, the Committee discussed options for Investment Strategies and issues raised from the Western Asset Management presentation.

At the conclusion of debate, it was,

Resolved:

a)    For a review of the Fund’s fixed income allocations, requesting Mercers consult with Western Asset Management to outline proposed mandate amendments and options for global investing that could be implemented in the future, and to bring a report to the Committee in September 2012; and

b)   To consider the use of the 10% temporary global passive equities allocation at a later date.