Pension Sub-committee And Pension Board - 17/11/2004
At a Meeting of the SUPERANNUATION INVESTMENT SUB-COMMITTEE OF THE FINANCE COMMITTEE held at Dundee on 17th November, 2004.
Present:-
BAILIES
C D P FARQUHAR
Neil I C POWRIE
COUNCILLORS
George REGAN
Nigel DON
Councillor REGAN, Convener in the Chair.
The minute of meeting of this Sub-Committee of 18th August, 2004 was noted.
Unless marked thus * all items stand delegated.
I INVESTMENT IN TOBACCO COMPANIES
Following adverse press comments on local authority pension funds investing in tobacco companies, the Convener stated that the Depute Chief Executive (Finance) would be contacting the Fund Managers of the Tayside Superannuation Fund to ascertain as follows:-
(a)What were the current investments in tobacco products?
(b)What would be the likely impact on pension holders of withdrawing from these investments?
The Depute Chief Executive (Finance) undertook to report back to the next Sub-Committee meeting. He would also consult with Hymans Robertson, investment advisers to the Fund.
II SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT
There was submitted Report No 781-2004 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. As part of the Fund's policy on Socially Responsible Investment, it's investment managers were required to engage with companies on matters of social responsibility including Sustainability and the Environment. Summaries of engagement activity over the last six months were detailed in the Appendices to the report.
In response to Councillor Don, the Depute Chief Executive (Finance) advised that the Statement of Investment Principles which includes socially responsible investing was reviewed annually and there would be an opportunity to raise any concerns at the February 2005 meeting.
The Sub-Committee noted the information contained in the report with regard to the activities of the Fund Managers during the six months period ended 30th September, 2004.
The Sub-Committee resolved under Section 50(A)(4) of the Local (Scotland) Act, 1973 that the public and press be excluded from the meeting during consideration of the undernoted items of business as they involved the likely disclosure of exempt information as defined in Paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.
III TAYSIDE SUPERANNUATION FUNDS
(a) PERFORMANCE SUMMARIES
There was submitted Report No 782-2004 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, 2004. The Report also considered the performance of the Transport Fund which shared two of the Managers. The Report compared investment performances of the Fund with the fund's specific benchmarks which consisted of various marked indices.
The Sub-Committee noted that two Fund Managers had under performed the benchmark for the quarter to 30th September, 2004. The Transport Fund had also slightly under performed the benchmark for the same quarter. The Report also incorporated the Fund Managers' performance to the year to 30th September, 2004 and also the three year period to 30th September, 2004.
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 their Fund Manager.
(b) PERFORMANCE SUMMARY (PROPERTY PORTFOLIO)
There was submitted Report No 783-2004 by the Depute Chief Executive (Finance) reviewing the investment performance of the Property Portfolio managed by Schroder Property Investment Management Limited for the quarter to 30th September, 2004 and also for the twelve month and three year periods to the same date. The Report compared investment performances with an appropriate benchmark from April 2004.
The total portfolio had out performed the benchmark for the quarter to 30th June, 2004 and also the twelve month and three year periods to 30th June, 2004.
The Sub-Committee noted the information contained in the report with regards to the Property Portfolio managed by Schroder Investment Management Limited.
(c)SUMMARIES OF INVESTMENTS AND TRANSACTIONS - 1ST JULY TO 30TH SEPTEMBER, 2004
There was submitted Report No 779-2004 by the Depute Chief Executive (Finance) summarising investments and transactions for the period 1st July to 30th September, 2004.
The Sub-Committee noted the information contained in the report.
IV COMMISSION RECAPTURE
There was submitted Agenda Note AN438-2004 advising that the Sub-Committee at its meeting on 18th August, 2004 had delegated powers to the Depute Chief Executive (Finance) to select the best provider of the commission recapture service for a new contract starting on 1st October, 2004.
Four firms had been invited to tender and the Depute Chief Executive (Finance) considered that Lynch, Jones and Ryan, the existing provider, continued to provide best value.
The Sub-Committee noted that Lynch, Jones and Ryan had been re-appointed from 1st October, 2004.
V PRESENTATION
Peter Yarrow, Graham Clapp and Sam Morse of Fidelity Investments gave a presentation. Peter Yarrow acknowledged that the performance over the past year had been disappointing. Asset allocation had detracted from the Fund's relative performance. Consumer demand and spending in the UK was slowing down and property values were levelling off. Graham Clapp briefly reviewed the UK equity portfolio purchases and sales for the twelve months to 30th September, 2004. He undertook to seek analysts' views on the possible withdrawal from tobacco company investments. Sam Morse was taking over from Graham Clapp as the Fund Manager - UK Equities.
The Convener thanked the speakers and wished Graham Clapp well in his new post.
There followed a training session from Fidelity on Asset Allocation.
GEORGE REGAN, Convener.