Pension Sub-committee And Pension Board - 18/05/2005
At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE of the FINANCE COMMITTEE held at Dundee on 18th May, 2005.
Present:-
BAILIE
Neil I C POWRIE
COUNCILLORS
George REGAN
Willie SAWERS
Joe FIZPATRICK
Nigel DON
Councillor REGAN, Convener, in the Chair.
The minute of meeting of this Sub-Committee of 23rd February, 2005 was noted.
Unless marked thus * all items stand delegated.
I INVESTMENT IN TOBACCO
There was submitted Agenda Note AN218-2005 advising that a full memorial had been prepared seeking the opinion of Senior Counsel as to whether the Sub-Committee had the power to withdraw its investments in Tobacco Companies. The Depute Chief Executive (Finance) advised that this was a complex issue and the question to be asked of Senior Counsel had only been finalised very recently with the help of the Fund's Investment Advisor.
The Sub-Committee noted that once the opinion of Senior Counsel had been obtained it would be reported back to the next meeting.
II SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT
There was submitted Report No 323-2005 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 had been identified as Employee Care, Human Rights, Sustainability and the Environment and the report reviewed how the individual Fund Managers had implemented positive engagement.
A summary of engagement activity over the last six months was shown at Appendix 1 of the report. The Chief Exchequer Officer pointed out that Appendix 4 provided a good insight into how Fund Managers tackle socially responsible investment.
Councillor Don commented that he was encouraged by the progress being made in regard to socially responsible investment.
The Sub-Committee noted the information contained in the report with regard to the activities to the Fund Managers' activities during the six month period ending 31st March, 2005.
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 during consideration of the undernoted items of business 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 7A of the Act.
III TAYSIDE SUPERANNUATION FUND
(a) PERFORMANCE SUMMARIES
There was submitted Report No 324-2005 by the Depute Chief Executive (Finance) reviewing the investment performance of the Main Fund's four Fund Managers (excluding Property) for the quarter to 31st March, 2005. 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 Funds' specific benchmarks which consisted of various stock market indices.
The Sub-Committee noted that all four Fund Managers had outperformed the benchmark for the quarter to 31st March, 2005. The Transport Fund had also outperformed the benchmark. Two Fund Managers had outperformed the benchmark for the year to 31st March, 2005 with two Fund Managers underperforming. The Transport Fund had outperformed the benchmark for the year to 31st March, 2005. The report also incorporated the Fund Managers' performance for the three year period to 31st March, 2005.
The Sub-Committee noted the information contained in the report with regard to the performance of the Tayside Superannuation Fund and their Fund Managers.
The Depute Chief Executive (Finance) referred to a retrospective review of the eleven Scottish Local Authority Pension Funds based on WM performance benchmark. The Tayside Superannuation Fund was rated best over the quarter, year and three year periods relative to its benchmark.
(b) PERFORMANCE SUMMARIES (PROPERTY PORTFOLIO)
There was submitted Report No 325-2005 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 31st March, 2005 and also for the twelve months and three year periods to the same date. The report compared investment performances with an appropriate benchmark from April 2004.
The total portfolio had outperformed benchmark for the quarter to 31st March, 2005 and also for the twelve months and three year periods to 31st March, 2005.
The Depute Chief Executive (Finance) commented that the percentage holding in Schroder Exempt reflected their current market share.
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 Limited.
(c)SUMMARIES OF INVESTMENTS AND TRANSACTIONS - 1ST JANUARY TO 31ST MARCH, 2005
There was submitted Report No 326-2005 by the Depute Chief Executive (Finance) summarising the investments and transactions for the period from 1st January to 31st March, 2005.
The Sub-Committee noted the information contained in the report.
IV PRESENTATION/TRAINING
George Blunden and Jim Ross of Alliance Bernstein gave a short training session on "What it Means to be a Value Investor" explaining their approach to investment referring in particular to loss aversion and behavioural explanations. There followed a presentation by Jim Ross reviewing the performance of Alliance Bernstein over the past quarter, year and since inception which had all out performed the benchmark. Stock selection was all important in achieving these results. Looking ahead, there was some investor concern about rising interest rates and pressure on margins. Alliance Bernstein were actively engaged in socially responsible investment and Jim Ross gave two examples of recent engagement with high profile companies.
The speakers answered questions and were thanked by the Convener.
GEORGE REGAN, Convener.