Pension Sub-committee And Pension Board - 17/08/2005

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE of the FINANCE COMMITTEE held at Dundee on 17th August, 2005.

Present:-

BAILIES

Charles D P FARQUHAR

Neil I C POWRIE

COUNCILLORS

Fraser MACPHERSON

Nigel DON

Joe FITZPATRICK

In attendance:-

Mr Steven Geekie, Tayside Full-Time Trade Union Officers' Group (substitute for Mr Willie Gowans)

Councillor MACPHERSON, Convener, in the Chair.

The minute of meeting of this Sub-Committee of 18th May, 2005 was noted.

Unless marked thus * all items stand delegated.

I MATTER ARISING: INVESTMENT IN TOBACCO

Reference was made to Article I of the minute of the Superannuation Sub-Committee meeting of 18th May, 2005, whereby 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. This opinion was due to be reported back to this meeting on 17th August.

The Depute Chief Executive (Finance) reported that the first QC had received the papers, realised that he had a conflict of interest and withdrawn. The second QC had been unable to meet the deadline due to holidays and other commitments.

The Sub-Committee expressed some disappointment at this information and noted that Counsel's opinion would now be available for the next meeting on 16th November, 2005.

II PROPOSED TIMETABLE OF MEETINGS FOR 2005/06

There was submitted Agenda Note AN316-2005 advising that the meeting originally scheduled for Wednesday, 22nd February, 2006 had been moved to Wednesday, 1st March, 2006.

The Sub-Committee noted this change of date.

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 1 of Schedule 7(A) of the Act.

III TAYSIDE SUPERANNUATION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 497-2005 by the Depute Chief Executive (Finance) reviewing the investment performance of the Main Fund's four Fund Managers (excluding Property) for the quarter to 30th June, 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 one Fund Manager had outperformed the benchmark for the quarter to 30th June, 2005 with three Fund Managers underperforming the benchmark. The Transport Fund had slightly underperformed the benchmark. Three Fund Managers had outperformed the benchmark for the year to 30th June, 2005 with one Fund Manager underperforming. The Transport Fund had outperformed the benchmark for the year to 30th June, 2005. The report also incorporated the Fund Managers' performance for the three year period to 30th June, 2005.

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 Managers.

(b) PERFORMANCE SUMMARIES (PROPERTY PORTFOLIO)

There was submitted Report No 498-2005 by the Depute Chief Executive (Finance) reviewing the performance of the Property Portfolio managed by Schroder Property Investment Management Limited for the quarter to 30th June, 2005 and also for the twelve months and three year periods to the same date. The report compared investment performance with an appropriate benchmark from April 2004.

The total portfolio had outperformed the benchmark for the quarter to 30th June, 2005 and also for the twelve months and three year periods to 30th June, 2005.

The Depute Chief Executive (Finance) was pleased to note that the holding in Schroder Exempt had been further reduced.

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.

There was submitted Report No 468-2005 by the Depute Chief Executive (Finance) summarising the investments and transactions for the period from 1st April to 30th June 2005.

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

V PRESENTATION

Sally Marshall and Iain Lindsay reviewed the Goldman Sachs' performance over the year to 30th June, 2005. Sally pointed out that the portfolio had outperformed the benchmark over the period and summarised the strategies involved. Iain stated that bonds had benefited from some pessimism/uncertainty in Europe. Currently there were concerns re the increasing price of oil, falling retail sales and the levelling off of house prices which may affect business confidence. UK interest rates were likely to remain at a constant level for some time.

The Convener thanked the speakers for their informative presentation.

FRASER MACPHERSON, Convener.

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