Pension Sub-committee And Pension Board - 02/09/2013

At a MEETING of the PENSION INVESTMENT SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 2nd September, 2013.

APPENDIX I

Present:-

COUNCILLORS

Councillor Jimmy BLACK, Depute Convener, in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II PENSION FORUM FOR PARTICIPATING MEMBERS

There was submitted Agenda Note AN99-2013 advising the Sub-Committee that the 2013 Forum would be held at Dundee Contemporary Arts on 24th October (9.00 am - 12.00 pm). In addition to general presentations relating to investment performance and fund administration, guest speakers from Alliance Trust and Barnett Waddingham would give presentations on the global economic outlook and pension reform.

III CHANGE OF NAME OF SUB-COMMITTEE

There was submitted Agenda Note AN100-2013, whereby reference was made to Article V of the City Council meeting of 19th August, 2013, whereby the change of name from Superannuation Investment Sub-Committee to Pension Investment Sub-Committee was approved.

IV TREASURY MANAGEMENT STRATEGY AMENDMENT

There was submitted Report No 360-2013 by the Director of Corporate Services amending the Treasury Management Strategy for Tayside Pension Fund.

The Sub-Committee approved the Treasury Management Strategy, including the amended 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 item of business on the grounds that it involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part I of Schedule 7A of the Act.

V TAYSIDE SUPERANNUATION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 358-2013 by the Director of Corporate Services relating to Performance Summaries for the quarter, twelve months and three years to 30th June, 2013.

This report reviewed the investment performance of the Main Fund's five Fund Managers (including Property), and the Financing Fund for the quarter to 30th June, 2013. It also considered the performance of the Transport Fund which invested with three of these managers.

The report compared investment performance of the Funds with the Funds' specific benchmarks which consist of various stock and security market indices.

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

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 341-2013 by the Director of Corporate Services summarising investments and transactions during the period 1st April, 2013 reviewing the investment activities of the Main Fund's six Fund Managers for the quarter to 30th June, 2013. 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 Pension Fund and Tayside Transport Pension Fund and their Fund Managers.

(c) QUARTERLY FUNDING REPORT

There was submitted Report No 359-2013 by the Director of Corporate Services which considered report reviewing the current funding level of the Funds as assessed by the Fund Actuary.

The Sub-Committee noted the report by the Fund Actuary.

VI APPOINTMENT OF INVESTMENT CONSULTANT

There was submitted Report No 361-2013 by the Director of Corporate Services recommending the appointment of investment consultants for the Pension Fund following a procurement exercise for a period of three years commencing 1st October, 2013.

The Sub-Committee agreed that an Investment Consultant be appointed for the Tayside Pension Fund. Their general duties would be to provide investment advice and guidance to the officers and members of the Sub-Committee of the Fund. In addition to providing quarterly monitoring reports, they would attend one officer meeting per quarter, prepare an annual report and attend one Sub‑Committee meeting per year.

VII INVESTMENT IN TOBACCO REPORT

There was submitted Report No 362-2013 by the Director of Corporate Services seeking the instruction of the Sub-Committee with regard to the position regarding Tayside Pension Fund investment policy including investments in tobacco.

Councillor Black, seconded by Depute Lord Provost Roberts, moved that as the Pension Investment Sub-Committee note that the Scottish Government, the NHS and the City Council wish to discourage smoking, which carries very serious health risks; accepts that in this context direct investment in the tobacco sector contradicts that aim and may only be justified on financial grounds; resolves to consult the Fund Managers seeking their professional views on whether a decision not to invest directly in the tobacco sector would still leave adequate other sectors to provide returns which are not seriously diluted and, if they confirm that this is the case, consult employers to ascertain their views on whether the Fund should continue to invest directly in the tobacco sector.

The motion was carried unanimously.

VIII PRESENTATION

Gordon Strachan and Stuart Rumble of Fidelity Worldwide Investment gave a short presentation.

A summary of the performance of the portfolio was given, noting the key performance drivers and comparison of this to benchmark figures. It was noted that although equities in particular were continuing to out-perform the benchmark external factors it may cause future market volatility.

The Convener thanked Gordon and Stuart for their presentation.

Jimmy BLACK, Depute Convener.