Agenda and minutes
Venue: Room MP702, 7th Floor, Town Hall, Mulberry Place, 5 Clove Crescent, London E14 2BG
Contact: Antonella Burgio, Democratic Services. Tel: 020 7364 4881 E-mail: antonella.burgio@towerhamlets.gov.uk
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DECLARATIONS OF DISCLOSABLE PECUNIARY INTEREST PDF 64 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: No declarations of disclosable pecuniary interests were made.
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MINUTES OF THE PREVIOUS MEETING(S) PDF 98 KB To confirm as a correct record the minutes of the meeting of the Committee held on 24 February 2015. Additional documents:
Minutes: The minutes of the meeting held on 24 February and 23 July 2015 were approved.
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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 for which the Committee is responsible. |
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VARIATION TO ORDER OF BUSINESS Minutes: Chair MOVED to vary order of business to receive training from James Sparsholt and Christy Morrison of LGIM (Agenda item 6.1 Liability Driven Investment)
Accordingly, it was:-
Resolved
That the Order of Business be varied to enable the Committee to consider next consider agenda item 6.1 Liability Driven Investment- Presentation by James Sparsholt and Christy Morrison of LGIM. Thereafter to return to the order of business detailed in the agenda.
Please note that for ease of reference, the deliberations of the Committee in respect of agenda items 6.1 and subsequent decisions taken are set out below in the order detailed in the agenda. |
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REPORTS FOR CONSIDERATION |
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Minutes: The Committee received a report that provided Members with the first quarterly monitoring information on the performance of the Pensions Administration Service covering the period, April 2015 - June 2015, Quarter 1, 2015/16.
A summary of the discussions is outlined as follows:
The Committee heard that:
· 1st year end under the new scheme. · This task required heavy manual intervention; and · Like many other Funds LBTH have had to migrate from AXISe to a new administration system in the past year which has taken up a significant amount of time and resource alongside implementing the new scheme (including supporting employers and scheme members).
Accordingly, it was:-
Resolved
To note the contents of the report.
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Minutes: The Committee received a report that informed Members of the performance of the Fund and its investment managers for the quarter ending 30 June 2015. For the quarter, the Fund underperformed the benchmark by -0.5%, delivering a negative absolute return of -2.14% against benchmark return of -1.9%.
It was noted that the Fund is slightly ahead its benchmark for the last twelve months to end of June 2015, the Fund returned 7.2%, and this exceeds the benchmark by 0.2%. Whilst for longer term performance the Fund posted three year returns of 10.7% ahead the benchmark return of 10% and posted five year returns of 9.2% against benchmark return of 9.0%.
Whilst for this quarter end the Committee was informed that four out of the eight mandates matched or achieved returns above the benchmark. The Fund performance was below the benchmark over the quarter, which was mainly due to poor returns from Ruffer, Baillie Gifford (DGF), Investec and Schroder Property Funds.
Finally, the Committee was informed that the Fund is still in line with its long term strategic equity asset allocation and the distribution of the Fund’s assets amongst the different asset classes is broadly in line with the strategic benchmark weight. An outline of the discussions may be summarised as follows:
The Committee:
Accordingly, it was:-
Resolved
To:
Note the contents of the report. |
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Training and Development For Members - Presented by Bola Tobun PDF 107 KB Minutes: The Committee received a report that outlined the need for a training and development programme for Members. The report explained the requirement for good governance of the Pension Fund and the framework of legislation, regulation and guidance which the Fund must comply with and that therefore there is a need for a formal training programme for Members and Observers of the Pensions Committee.
The report also referred to the Chartered Institute of Public Finance and Accountancy (CIPFA) publication “Pensions Finance, knowledge and skills framework, Technical Guidance for Elected Representatives and Non-executives in the Public Sector” (2010). This provided a framework for the training and development of Elected Members and other representatives on public sector pension scheme decision making bodies such as the Tower Hamlets Pensions Committee. As a result of discussions on this report the Committee noted that:
Accordingly, it was:-
Resolved
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ANY OTHER BUSINESS CONSIDERED TO BE URGENT The Chair will be asked to consider the following items which have been notified after the agenda publication.
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Liability Driven Investment - Presentation by LGIM Minutes: The Chair to invite James Sparsholt and Christy Morrison to present the item on Investment Training. The presentation covered a wide range of issues including the following How big is the bond market; How do bonds work; Who issues and who buys bonds; The Characteristics of UK government bonds “Gilts”; What drives government bond prices/yields and the Impact of changes in interest rates and inflation. The main points of the discussion maybe summarised as follows.
The Committee heard that:
Accordingly LGIM had:
Accordingly, it was:-
Resolved
To note the contents of the report.
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Training Policy - Presentation by Bola Tobun Minutes: The Committee noted that the adoption of the CIPFA knowledge and skills framework (2010) referred to in Item 4.3 indicates that the Committee is following national guidance on the content of training for Committee Members and Observers. |
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Economic & Market Outlook by Raymond Haines Minutes: Mr Haines, Independent Investment Advisor to the Pensions Committee gave a verbal update providing a highlight on the Councils portfolio of investments and providing an outlook on the economy and market which may be summarised as follows:
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Pensions Board Update - Presented by Bola Tobun Minutes: The Committee noted an update on the establishment of the Pension Board including the recruitment of the Chair and the appointment of the representatives of Pension Fund Members.
It was noted that applicants for the position of Chair should have significant financial awareness and investment practice either as a Pension Fund Trustee or in the running of pension funds, preferably within the Local Government Pension Scheme.
Applicants must not:
1. be a current elected member or employee of a participating scheme employer, or 2. have a financial or other material interest in either the Administering Authority or any of its constituent employers, or 3. have been an elected member or employee of a participating scheme employer in the past 5 years. 4. be an active, pensioner or deferred member of London Borough of Tower Hamlets Pension Fund.
Whilst with regard to the appointment of the representatives of Pension Fund Members it was noted that there had been a clear and transparent process to engage with all Fund Members. In addition, the Committee considered and agreed that:
A total of three member representatives (two of whom shall be employees of the London Borough of Tower Hamlets shall be appointed from the following sources:
· One member representative who is a LBTH employee shall be appointed by the recognised trade unions representing employees who are scheme members of the Fund. The Unions should nominate an Agreed representative within 28 days of the Governance Officers request. Failure to nominate an agreed representative, the Administering Authority shall recruit and appoint a representative to the Board; · One member representative shall be appointed following a transparent recruitment process by the Administering Authority and open to all active scheme members of the Fund; and · One member representative shall be appointed following a transparent recruitment process by the Administering Authority and open to all pensioners of the Fund.
In addition, it was noted that if there were more nominees than seats then a ballot would take place.
Accordingly, it was:-
Resolved to agree the above proposals. |
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Common Investment Vehicle (CIV) - Presented by Bola Tobun Minutes: The Committee noted
that the establishment of a Common Investment Vehicle (CIV) for
pensions investment operated on behalf of London Boroughs will
require a level of buy in from councils to establish whether the
initial interest of boroughs can be converted into real interest to
make the initial investment in setting up the CIV worthwhile
e.g. that savings could be made from the joint
administration of investments and/or benefits administration.
In addition, the Committee noted the following the recommendations approved at the July meeting:
Finally, the Committee heard that:
The London CIV is in the process of issuing the articles of association and the contractual agreement for boroughs to sign; It is anticipated to happen prior to the next committee meeting; and A request would be issued for the Fund to pay the regulatory capital of £160k.
Accordingly, it was:-
Resolved
To instruct Officers to take this forward and provide an update to a future meeting.
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EXCLUSION OF THE PRESS AND PUBLIC Minutes: The Chair Moved and it was: -
Resolved:
That in accordance with 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 contained information defined as exempt or confidential in Part 1 of Schedule 12A to the Local Government, Act 1972.
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RESTRICTED MINUTE Minutes: The Chair Moved and it was:-
RESOLVED
That the restricted minute 5.5 of the meeting of the Overview and Scrutiny Committee held on 23rd July, 2015 be approved as a correct record of the proceedings subject to the amendment of resolution 2;3 and 4 to read “the Chair and Vice-Chair of the Pensions Committee”.
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