Pension Sub-committee And Pension Board - 28/11/2011

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 28th November, 2011.

Present:-

Bailie Willie SAWERS

COUNCILLORS

Bailie Willie SAWERS, Convener, in the Chair.

Unless marked thus * all items stand delegated.

I PROPOSED TIMETABLE OF MEETINGS FOR 2012

There was submitted Report No 526-2011 by the Director of Finance proposing a suggested programme of meetings of the Superannuation Investment Sub-Committee to cover investment performance and issues arising in 2012.

The Sub-Committee agreed the proposed programme of meetings as detailed.

II SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 527-2011 by the Director of Finance reviewing the progress by the Fund Managers regarding the positive engagement policy on Environmental, Social and Corporate Governance approved by the Sub-Committee on 17th November, 2008.

The Sub-Committee noted the information contained within the report with regard to the activities of the Fund Managers during the six month period ended 30th September, 2011, and agreed that a follow-up report be submitted to ensure all outstanding issues were resolved.

III PERMITTED COUNTERPARTIES FOR INVESTMENT TRANSACTIONS

There was submitted Agenda Note AN184-2011, whereby reference was made to Article VII of the minute of meeting of the Superannuation Investment Sub-Committee of 29th August, 2011, wherein approval was given to Report No 117-2011 "Treasury Management Strategy". Appendix 1 of the report detailed the credit ratings and maximum deposits to be placed with approved ending bodies. To reflect the downgrading of two approved lending bodies from F1+ to F1 on 14th October, 2011, reduced maximum deposit limits have been operated with effect from 1st November, 2011. On five occasions between 18th October, 2011 and 27th October, 2011, sums which exceeded the F1 (but not F1+) maximum deposit limits were held. Recommended revised limits are detailed below:-

Money Market Funds

* This 5m limit applies to the call account. Additional smaller balances (less than 1m) may also be held in the current account.

Any institution whose credit rating fell below the limits set above would no longer be a permitted counterparty for further transactions.

The Sub-Committee approved this recommendation.

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 were likely to involve disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.

IV TAYSIDE SUPERANNUATION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 525-2011 by the Director of Finance reviewing the investment performance of the Main Fund's four Fund Managers (excluding Property) and the Financing Fund for the quarter to 30th September, 2011. It also considered the performance of the Transport Fund which shared two of these managers.

The report compared investment performances of the Funds with the Funds' specific benchmarks which consisted of various stock market indices.

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

(b) PERFORMANCE SUMMARY (PROPERTY PORTFOLIO)

There was submitted Report No 524-2011 by the Director of Finance reviewing the investment performance of the Property Portfolio for the period to 30th September, 2011.

The report compared investment performances with an appropriate benchmark, the IPD Pooled Property All Balanced Funds Median.

The Sub-Committee noted the information contained therein with regard to the performance of the Property Portfolio.

(c) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 513-2011 by the Director of Finance reviewing the investment activities of the Main Fund's six Fund Managers for the quarter to 30th September, 2011. The Transport Fund shared three of these managers and their transactions were included.

The report summarised the transactions of each Fund Manager and showed the market values of the Main and Transport Fund.

The Sub-Committee noted the information contained therein with regard to the activities of the Tayside Superannuation Fund and Tayside Transport Superannuation Fund and their Fund Managers.

V REVIEW OF PERFORMANCE

Allison Galbraith of Hymans Robertson reviewed the performance of the Fund and the individual managers over the year.

The Sub-Committee noted the content of the Hymans Robertson report.

VI FUND MANAGER REVIEW

There was submitted Report No 529-2011 by the Director of Finance reviewing the position of a Fund Manager given the recent performance which had continued to be significantly below benchmark.

The Sub-Committee agreed that no action be taken at the current time but that the performance of the Fund Manager be kept under review. It was further agreed that a presentation be given to members to fully explore the future investment relationship with the Fund Manager.

VII PRESENTATION

Gillian Evans and Anna Troup of Goldman Sachs Asset Management gave a short presentation.

A summary of the performance of the Portfolio was given, noting the key performance drivers, and comparing this to benchmark figures. Market performance over Quarter Three was given and consideration given for the future.

After they had answered questions from members, the Convener thanked Gillian and Anna for their interesting and informative presentation.

Willie SAWERS, Convener.