Agenda and minutes
Venue: MP702, 7th Floor Town Hall, Mulberry Place, 5 Clove Crescent, London E14 2BG
Contact: Nishaat Ismail, Democratic Services. Tel: 020 7364 4881 E-mail: nishaat.ismail@towerhamlets.gov.uk
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DECLARATIONS OF DISCLOSABLE PECUNIARY INTEREST PDF 67 KB To note any declarations of interest made by Members, including those restricting Members from voting on the questions detailed in Section 106 of the Local Government Finance Act, 1992. See attached note from the Monitoring Officer.
Minutes: None declared. |
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MINUTES OF THE PREVIOUS MEETING(S) PDF 86 KB To confirm as a correct record the minutes of the meeting of the Committee held on 30 June 2016
Minutes: The Pensions Committee minutes of the 30th June 2016 were approved as a correct record of proceedings with the following amendments;
· Ngozi Adedeji, requested the minutes of the Pensions Committee on the 30th June be amended to reflect her attendance. |
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PETITIONS To receive any petitions relating to matters for which the Committee is responsible. Minutes: No petitions were received relating to matters which the Committee is responsible. |
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SUBMISSIONS / REFERRALS FROM PENSION BOARD Minutes: An update was given informing the Committee of referrals made by the Pensions Board. The Committee heard that; · The Pensions Board received a presentation from London CIV · The Board Members noted the absence of employee representation in the London CIV. · Misgivings around ESG engagement · Board members requested to receive submission of email from John Jones before the Pensions Committee. |
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REPORTS FOR CONSIDERATION |
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Actuarial Valuation Update- Presentation from Hymans Robertson Minutes: The Committee received a presentation from Hymans and were given an update on the Actuarial valuation. The main points highlighted were;
· The deficit has gone down by £120 million · At the last valuation it was at 73.4% · At the last valuation there was a slightly bigger risk premium · Assets have grown by almost 200 million and performance has been stronger. · 45 million has been profited on assets with reduced liabilities. · Deficit contributions were around 15% last time and gone down to 9½%
It was RESOLVED That the contents of the presentation be noted. |
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Presentation from London Collective Investment Vehicle (CIV) Julian Pendock and Jill Davys (London CIV) to outline progress CIV has made since inception; appointment of global equity managers in early 2017. Minutes: Jill Davy’s from London CIV delivered a presentation to the Members of the Pensions Committee and the main points highlighted were;
· The London CIV Board is part of the decision making process · On a local level the Fund still has a considerable amount of responsibility. · To ensure the delivery of value for money as more people move to pooling, the Committee were told by Ms Davy’s the level of asset management will have to be increased with the Fund. · At the moment London CIV do not have in house expertise or resources to employ their own Fund Managers.
It was RESOLVED That Members of the Committee note the content of the presentation. |
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Review of Pension Fund Investment Strategy PDF 176 KB Minutes: The Investment and Treasury Manager presented this report to the Committee which provided a summary of the need to review the current investment strategy following the 2016 Triennial Actuarial Valuation outcome and other relevant issues such as the current investment climate.
The Committee heard that the review will encompass an asset liability study which assesses the suitability of alternative investment strategies for the Pension Fund’s liability profile.
The Committee were told that no alternatives have been considered at this stage. The Committee could decide to continue with its existing strategy however, it would be considered best practice to at least carry out an assessment of the Fund’s position following the triennial valuation, even if the conclusion was to remain with the current strategy thereafter.
It was RESOLVED That the contents of the report be noted. |
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Minutes: The Committee heard from the Investment and Treasury Manager that Mulberry School for Girls and Ian Mikardo High School (IMHS), within the London Borough of Tower Hamlets (LBTH) have received an Academy Order from the Secretary of State for Education and plan to convert to academy status by 1st November 2016.
The Committee were told that the final Pension contribution rate for IMHS is 51% and for Mulberry School for Girls the total contribution rate is 40.1%. The Committee were told that these figures were based on 2013 valuation and is for November 2016 to March 2017 and they will be revised with March 2016 Valuation.
In response to Members questions, the Committee heard that;
· A 20 year recovery period is common but the reason why the Council took 14 year period is due to the risk faced by local authorities. · Cllr Harrisson requested for data to be provided at the next Committee regarding the conversion of St Pauls Way Trust School. · Payroll for IMHS is approximately £330,000 and Mulberry School for Girl’s payroll is £1.3 million · As they are scheduled bodies, the authority is required to admit new academies into the Scheme.
It was RESOLVED · That the Committee confirm in line with the Pensions Committee resolution at its meeting of 17 November 2011 (and subsequent decisions on individual Academy conversions) that there should be a recovery period of 14 years to determine the amount of Pension deficit attributable to Mulberry School for Girls and Ian Mikardo High School · And the final contribution rate for each school mentioned above be noted. |
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Market Update To receive a verbal update on recent market activity from Raymond Haines Minutes: Mr Raymond Haines, the Independent Investment Advisor updated the Committee on recent market activities. Members heard;
· There are other factors impacting the market aside from Brexit · Equity markets would benefit from currency move, providing portfolio is unhedged. · Bonds were looking to be incredibly expensive and there is no reason to expect for it to become cheaper. · Money was continuing to go into equities · After a meeting with 4 Fund Managers, the Committee were told that there were negative returns from US equities. · The committee were told that a period of uncertainty would last for a while post Brexit but our portfolio is predominantly based in non-domestic equities.
It was RESOLVED That Members note the verbal market update report. |
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Pension Fund Managers Investment Performance Review for Quarter End 30 June 2016 PDF 220 KB Additional documents: Minutes: The Investment Treasury Manager presented the report on the Investment Performance Review for Quarter End 30 June 2016.
This report informed Members of the performance of the Fund and its investment managers for the quarter ending 30th June 2016.
The Committee heard that for this quarter the Fund underperformed the benchmark by 0.4% delivering a positive absolute return of 4.8% against benchmark return of 5.2%
The Committee also heard that for this quarter end, four out of eight mandates matched or achieved returns above the benchmark. The Fund performance lagged behind the benchmark over the quarter due to poor returns from LCIV (Baillie Gifford) Global Equity and LCIV (Baillie Gifford) Diversified Growth Fund and GMO.
It was RESOLVED That the contents of the report be noted. |
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Pension Fund Annual Report 2015/16 and Review of Fund Managers Internal Controls (To follow) |
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Pension Fund Procurement Plans 2016/17 PDF 109 KB Minutes: The Investment Treasury Manager presented the Pension Fund Procurement Plans 2016/17
The Committee were told about the procurement plans covering the fund’s independent consultant, global custodian and actuarial services.
The Committee heard that the contracts in place for all the above mentioned service providers have been in place for over ten years or do not in fact exist formally and they are therefore long due for formal review.
The Committee heard that the Council has an overarching responsibility to maintain the Pension Fund. It is essential that the Council has a Global Custodian, Investment Consultant, Independent Advisor and a Scheme Actuary to assist in the proper management of the Fund. The responsibility for the strategic oversight of all aspects of the Pension Fund has been given to the Pensions Committee.
It was RESOLVED That the contents of the report be noted. |
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TRAINING EVENTS Minutes: None. |
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ANY OTHER BUSINESS CONSIDERED TO BE URGENT Minutes: It was agreed that the next Pensions Committee to be held on December 7th be moved to 6:00 P.M. and the location of the meeting be changed to Idea Store Canary Wharf.
The Committee Clerk (Nishaat Ismail) to check availability of a meeting room at Idea Store Canary Wharf. |
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EXCLUSION OF THE PRESS AND PUBLIC In view of the contents of the remaining items on the agenda the Committee is recommended to adopt the following motion:
“That, under the provisions of Section 100A of the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985, the press and public be excluded from the remainder of the meeting for the consideration of the Section Two business on the grounds that it contains information defined as Exempt in Part 1 of Schedule 12A to the Local Government Act, 1972.”
EXEMPT SECTION (Pink Papers)
The exempt committee papers in the agenda will contain information, which is commercially, legally or personally sensitive and should not be divulged to third parties. If you do not wish to retain these papers after the meeting, please hand them to the Committee Officer present.
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RESTRICTED MINUTES Minutes: The restricted minutes of the Pensions Committee held on 30th June 2016 were approved as a correct record of proceedings. |