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Pension Sub-committee And Pension Board - 19/11/2003

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE of the FINANCE COMMITTEE held at Dundee onWednesday, 19th November, 2003.

 

Present:-

 

Bailies

 

C D P Farquhar

Neil I C Powrie

 

Councillors

 

George Regan

Joe FitzPatrick

Nigel Don

 

In attendance:-

 

Mr W Gowans, Tayside Full-Time Trade Union Officers' Group

 

Councillor Regan, Convener, in the Chair.

 

The minute of meeting of this Sub-Committee of 20th August, 2003 was noted.

 

Unless marked thus * all items stand delegated.

 

I SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

 

There was submitted Report No 768-2003 by the Depute Chief Executive (Finance) reviewing the progress by the Fund Managers regarding the positive engagement strategy approved by the Sub-Committee on 23rd February, 2000. The four action areas originally identified were Employee Care, Human Rights, Sustainability and the Environment.

 

The Principal Treasury and Investment Officer advised that Fidelity Investments had provided an overview as detailed in the Appendix to the report. A summary of a recent engagement by Baillie Gifford was contained within their quarterly report. Alliance Bernstein had only begun to manage the Fund's assets in July 2003 and consequently, there had been limited opportunity for them to put the engagement strategy into place.

 

Whilst socially responsible investment issues were being pursued, the Sub-Committee felt that it was difficult to prove positive outcomes on how practices had changed. The Fund Managers should be asked to achieve more tangible results.

 

It was agreed that the Depute Chief Executive (Finance) should convey the Sub-Committee's concerns to Fidelity Investments and Ballie Gifford and report back to a future meeting.

 

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.

 

II TAYSIDE SUPERANNUATION FUNDS

 

(a) PERFORMANCE SUMMARIES

 

There was submitted Report No 769-2003 by the Depute Chief Executive (Finance) reviewing the investment performance of the Main Fund's Four Fund Managers (excluding Property) for the quarter to 30th September, 2003. It also considered the performance of the Transport Fund which shared two of these managers.

 

It was noted that the Funds had moved to a more specialised structure in early July 2003 and these results covered the first quarter of this new arrangement. In future, it was intended to include twelve months' performance figures.

 

The Sub-Committee noted that one of the Fund Managers had out performed the index for the quarter to 30th September but three Fund Managers had slightly under performed the index. The Transport Fund return had also under performed the index.

 

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

 

(b)TAYSIDE SUPERANNUATION FUNDS PERFORMANCE SUMMARY (PROPERTY PORTFOLIO)

 

There was submitted Report No 770-2003 by the Depute Chief Executive (Finance) reviewing the investment performance of the Property Portfolio managed by Schroder Property Investment Management Ltd for the quarter and the twelve month period to 30th September, 2003. The report compared the investment performances with an appropriate benchmark - this new benchmark was introduced in July 2003. The portfolio had out performed the index for the quarter and for the year. The exposure to the largest holding was continuing to be reduced in line with the Sub-Committee's previous instructions.

 

The Sub-Committee noted the information contained in the report with regard to the performance of the Property Portfolio managed by Schroder Property Investment Management Ltd and agreed to ask Schroders for a report on their disinvestment projections over the next three years. This report to be brought back to the next meeting of the Sub-Committee.

 

(c)TAYSIDE SUPERANNUATION FUND SUMMARIES OF INVESTMENTS AND TRANSACTIONS - 30TH SEPTEMBER, 2003

 

There was submitted Report No 771-2003 by the Depute Chief Executive (Finance) summarising investments and transactions to 30th September, 2003. As the Transition Manager held assets at the start of the quarter and they were not passed to the incoming managers until the middle of July, it had not been possible to compile the normal standard report showing the investment transactions of the other managers.

 

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

 

III SECURITIES LENDING

 

There was submitted Report No 772-2003 by the Depute Chief Executive (Finance) seeking approval for the Main and Transport Funds to use the Custodian, to lend their securities as appropriate.

 

The Sub-Committee approved that an agreement be made with the Custodian to permit the lending of the Main and Transport Funds' securities, subject to the provision that no individual security could be 100% lent out. It was further agreed that the Custodian be asked to produce a report for a future meeting of the Sub-Committee on the operation of the Fund's Securities Lending policy.

 

IV PRESENTATION

 

Peter Yarrow and Graham Clapp of Fidelity Investments explained the background of Fidelity primarily for the benefit of the new Sub-Committee members. Fidelity had outperformed the benchmark for the year and the three year period to 30th September and the speakers outlined their approach. Research and stock selections were key elements in their performance.

 

Both speakers answered questions and were thanked by the Convener.

 

 

 

 

GEORGE REGAN, Convener.