Pension Sub-committee And Pension Board - 17/05/2006

At a MEETING of the SUPERANNUATION INVESTMENT SUB COMMITTEE of the FINANCE COMMITTEE held at Dundee on 17th May, 2006.

Present:-

BAILIES

Charles D P FARQUHAR

Neil I C POWRIE

COUNCILLORS

Fraser MACPHERSON

Jill SHIMI (substitute for Councillor Joe Morrow)

Nigel DON

In attendance:-

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

Councillor MACPHERSON, Convener, in the Chair.

The minute of meeting of this Sub-Committee of 1st March 2006 was noted.

Unless marked thus * all items stand delegated.

I SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 310-2006 by the Depute Chief Executive (Finance) reviewing the progress made by the Fund Managers regarding the positive engagement strategy approved by the Sub-Committee on 23rd February 2000.

The Sub-Committee noted the information contained in the report with regard to the activities of the Fund Managers during the six month period ended 31st March 2006.

II SPECIAL MEETING

The Sub-Committee was advised that a special meeting would be held on 7th June 2006 at 11.00 am. This dedicated meeting would consider a report on the Review of the Structure of the Fund. Geoff Singleton of Hymans Robertson would provide a report and presentation. In addition the Depute Chief Executive (Finance) would submit a covering report for consideration.

The Sub-Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act, 1973 that the press and public be excluded from the meeting for 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 FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 312-2006 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 2006. The report also considered the performance of the Transport Fund which shared two of the Managers. The report compared investment performances of the funds' specific benchmarks which consisted of various stock market indices. It was noted that the report now included the target set for the individual fund managers.

The Sub-Committee noted that all the Fund Managers had out-performed the benchmark for the quarter and the year to 31st March 2006. In addition, all four managers had exceeded the benchmark for the three year period tom31st March 2006.

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 313-2006 by the Depute Chief Executive (Finance) reviewing the investment performance of the Property Portfolio managed by Schroder Property Investment Management Ltd., for the quarter to 31st March 2006 and for the twelve month period to the same date. The report compared investment performances with the appropriate benchmark from April 2004.

The total portfolio had out-performed the benchmark for the quarter to 31st March 2006, also for the twelve month and three year periods to 31st March 2006.

The Depute Chief Executive (Finance) pointed out that the investment in Schroder Exempt had been further reduced. He also commented favourably on the management of the Property Portfolio.

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.

1ST JANUARY TO 31ST MARCH 2006

There was submitted Report No 314-2006 by the Depute Chief Executive (Finance) summarising investments and transactions for the period 1st January to 31st March 2006.

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

IV PRESENTATION AND TRAINING

Jenny Buck and Anthony Doherty of Schroder Property Investment Management Ltd., gave a presentation re progress from February 2005 and pointing to possible property investment opportunities in Europe. Anthony stated that the returns of recent years were expected to reduce over the next two or three years partly due to a slowdown in the retail sector. He reviewed the current portfolio and the very positive 2005 performance. Jenny Buck spoke of possible property investment opportunities in Europe - investors were beginning to look outwith the UK to diversify risk away from the UK. Any such diversification would require careful consideration.

The Convener thanked the speakers for their informative presentation.

Fraser MACPHERSON, Convener.

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