Pension Sub-committee And Pension Board - 04/06/2003

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE OF THE FINANCE COMMITTEE held at Dundee on 4th June 2003.

Present:-

Councillors

George REGAN

Charles D P FARQUHAR

Fiona GRANT (Substitute for Joe Morrow)

Willie SAWERS

Joe FITZPATRICK

Nigel DON

In Attendance:-

Mr W GOWANS, Tayside Full-Time Trade Union Officers Group

Councillor REGAN, Convener, in the Chair.

The minutes of meetings of this Sub-Committee of 5th March and 25th March 2003 were noted.

Unless marked thus * all items stand delegated.

I SEMINAR - THE 15TH LGC PUBLIC SECTOR PENSION FUND INVESTMENT SEMINAR, SOUTHAMPTON - 4/5SEPTEMBER 2003

There was submitted Agenda Note AN272-2003 advising that LGC Events had arranged their 15th Public Sector Pension Fund Investments Seminar for 4/5 September 2003 at a cost of 670 per delegate excluding travel and subsistence.

The Director of Finance advised that a COSLA Pension Funds training day for Elected Members and Officers would be held in mid September in Edinburgh and further details would be brought back to the August meeting of this Sub-Committee. Meantime, the Director of Finance undertook to advise members of the date in September once it was known.

In view of the above developments and the cost of the Southampton seminar, the Sub-Committee agreed not to approve the attendance of Elected Members at the Seminar in Southampton.

II SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 370-2003 by the Director of Finance reviewing the progress made by the Fund Managers regarding the positive engagement strategy approved by the Sub-Committee on 23rd February 2000. The four action areas had been identified as Employee Care, Human Rights, Sustainability and the Environment and the Principal Treasury and Investment Officer briefly summarised the approach of the individual Fund Managers. Socially responsible investment comments were incorporated in the Fund Managers' reports.

The Sub-Committee noted the information contained in the Report with regard to the activities of the Fund Managers during the six month period to 31st March 2003.

The Sub-Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the public and press be excluded from the meeting in order that the undernoted items of business be considered in private on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7(A) of the Act.

III APPOINTMENT OF TRANSITION MANAGER

There was submitted Report No 315-2003 by the Director of Finance advising the Sub-Committee on the appointment of a Transition Manager and the use of a consultant in the process.

The appointments of Alliance Bernstein & Goldman Sachs following interviews held on 25th March and 3rd April 2003 respectively were noted and it was intended that their management of the Funds would start on 1st July 2003. Accordingly they would require to receive assets from the existing managers and it was prudent to use a Transition Manager to minimise risk and disruption during this transfer.

The Sub-Committee noted that the Director of Finance, in conjunction with the Convener and Spokespersons from the Major and Minority Opposition Groups, had approved the appointment of Goldman Sachs as the Transition Manager and the use of Hymans Robertson as consultant in this process in view of the timescales involved.

IV WM PERFORMANCE MEASUREMENT 2002 ANNUAL REVIEW

There was submitted Report No 366-2003 by the Director of Finance examining the detailed results as calculated by the WM Company achieved in 2002 by each of the balanced Fund Managers employed by the City Council to manage the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

The Sub-Committee noted the analysis of the performance of the Fund Managers as calculated by the WM Company.

V TAYSIDE SUPERANNUATION FUND

(a) WM Performance Summaries (Balanced Portfolios)

There was submitted Report No 367-2003 by the Director of Finance relating to WM Performance Summaries for both the quarter and the year to 31st March 2003.

The Sub-Committee noted that two out of three Fund Managers had out performed WM Index for the quarter to 31st March 2003. All three Fund Managers had under performed the Index for the year to 31st March 2003. It was noted that negative returns had applied to both the quarter and the year to 31st March 2003.

The Sub-Committee noted the information contained in the Report with regard to the performance of the Tayside Superannuation Fund and its Fund Managers.

(b) Performance Summary (Property Portfolio)

There was submitted Report No 368-2003 by the Director of Finance relating to Schroder Property Investment Management Limited performance for both the quarter and the year to 31st March 2003.

The Sub-Committee noted the information contained in the above Report with regard to the performance of the Property Portfolio managed by Schroder Property Investment Management Limited.

There was submitted Report No 363-2003 by the Director of Finance summarising Investments and Transactions during the period 1st January to 31st March 2003.

The Sub-Committee noted the information contained in the Report.

VI TAYSIDE TRANSPORT SUPERANNUATION FUND

(a) WM Performance Summaries

There was submitted Report No 369-2003 by the Director of Finance relating to WM Performance Summaries for the both the quarter and year to 31st March 2003.

The Sub-Committee noted the information contained in the Report with regard to the performance of the Transport Fund.

(b) Summaries of Investments and Transactions

There was submitted Report No 364-2003 by the Director of Finance summarising Investments and Transactions during the period 1st January to 31st March 2003.