Pension Sub-committee And Pension Board - 27/02/2012

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 27th February, 2012.

Present:-

Bailie Willie SAWERS

Councillor Jimmy BLACK

Councillor Kevin KEENAN

Bailie Willie SAWERS, Convener, in the Chair.

Unless marked thus * all items stand delegated.

I TAYSIDE SUPERANNUATION FUNDS BUSINESS PLAN 2012/2013

There was submitted Report No 98-2012 by the Director of Finance introducing the ninth annual business plan for the Tayside Superannuation Funds.

The Sub-Committee noted the information within the report and approved the 2012/2013 Business Plan which applied to the administration and management of the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

II TAYSIDE SUPERANNUATION FUNDS RISK REGISTER

There was submitted Report No 103-2012 by the Director of Finance updating the Risk Register for the Tayside Superannuation Funds.

The Sub-Committee approved the Risk Register for the Tayside Superannuation Fund and Tayside Transport Superannuation Fund.

III STATEMENT OF INVESTMENT PRINCIPLES REVIEW

There was submitted Report No 104-2012 by the Director of Finance reviewing Statements of Investment Principles for the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

The Sub-Committee noted the information within the report and approved the Statements of Investment Principles for both the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

IV FUNDING STRATEGY STATEMENT

There was submitted Report No 102-2012 by the Director of Finance reviewing the Funding Strategy Statements for the Tayside Superannuation Funds.

The Sub-Committee approved the Funding Strategy Statements for the Tayside Superannuation Fund and Tayside Transport Superannuation Fund.

V TREASURY MANAGEMENT STRATEGY

There was submitted Report No 105-2012 by the Director of Finance reviewing the Treasury Management Strategy for the Tayside Superannuation Fund.

The Committee approved the Treasury Management Strategy including the list of permitted counterparties.

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.

VI TAYSIDE SUPERANNUATION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 107-2012 by the Director of Finance relating to Performance Summaries for the quarter, twelve months and three years to 31st December, 2011 reviewing the investment performance of the Main Fund's four Fund Managers (excluding Property) and the Financing Fund for the quarter to 31st December, 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 106-2012 by the Director of Finance for the quarter, twelve months and three years to 31st December, 2011 reviewing the investment performance of the Property Portfolio for the period to 31st December, 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.

There was submitted Report No 74-2012 by the Director of Finance summarising investments and transactions during the period 1st October to 31st December, 2011 reviewing the investment activities of the Main Fund's six Fund Managers for the quarter to 31st December, 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.

(d) QUARTERLY FUND REPORT

The Quarterly Funding Report was normally submitted on a quarterly basis and considered a report by the Fund's actuaries, Barnett Waddingham. As the outcome of the triennial valuation would be reported, the report was not submitted for the quarter ended 30th December, 2011.

(e) ACTUARIAL VALUATION AT 31ST MARCH, 2011

There was submitted Report No 108-2012 by the Director of Finance which considered a report by Barnett Waddingham, with Graeme Muir of Barnett Waddingham providing an overview of the valuation.

The report updated the Sub-Committee on the Actuarial Valuation of the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund at 31st March, 2011.

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

VII PRESENTATION

Tom Wright and Fiona McLeod of Baillie Gifford gave a short presentation.

Tom Wright outlined the history regarding the original mandate noting that the investment philosophy of Baillie Gifford was that, over time, superior earnings had remained unchanged in that a long-term approach was approved. Tom noted that there was a continued focus on stocks, with opportunities from new technologies. Current holdings within the portfolio were outlined and also notable transactions.

Thereafter, Fiona outlined the global alpha portfolio and advised that there was an increased exposure to secular growth winners as this would provide idiosyncratic growth drivers and diversification.

In conclusion, Tom advised members that continued volatility was anticipated but this would provide opportunities due to mis-priced companies.

The Convener thanked the speakers for their interesting and informative presentation.

Willie SAWERS, Convener.

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