Pension Sub-committee And Pension Board - 02/12/2013

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

Present:-

COUNCILLORS

Bailie Willie SAWERS, Convener, in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II PROPOSED TIMETABLE OF MEETINGS FOR 2014

There was submitted Report No 498-2013 by the Director of Corporate Services proposing a suggested programme of meetings of the Pension Investment Sub-Committee to cover investment performance and issues arising in 2014.

The Sub-Committee examined the dates set out in the timetable in Appendix 1 to the report and agreed the proposed programme of meetings.

III SOCIALLY RESPONSIBLE INVESTMENT - SIX MONTHLY REPORT

There was submitted Report No 499-2013 by the Director of Corporate Services 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, 2013.

IV STATEMENT OF ACCOUNTS AND EXTERNAL AUDITOR ANNUAL REPORT

There was submitted Agenda Note AN137-2013 advising that the following reports had been submitted to the Scrutiny Committee on 25th September, 2013:-

V COMMITTEE TRAINING - EDINBURGH - 17TH DECEMBER, 2013

There was submitted Agenda Note AN138-2013 advising that an LGPS (Scotland) training seminar on Reform of LGPS in Scotland was being held at the COSLA Offices in Edinburgh on 17th December, 2013. The Sub-Committee agreed that any member interested attend this seminar.

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 PENSION FUNDS

(i) PERFORMANCE SUMMARIES

There was submitted Report No 501-2013 by the Director of Corporate Services relating to Performance Summaries for the quarter, 12 months and three years to 30th September, 2013 and reviewing the investment performance of the Main Fund's five Fund Managers (including Property) and the M & G UK Financing Fund for the quarter to 30th September, 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 consisted of various stock and security 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.

(ii) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 485-2013 by the Director of Corporate Services summarising investments and transactions during the period 1st July to 30th September, 2013 and reviewing the investment activities of the Main Fund's six Fund Managers for the quarter to 30th September, 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.

(iii) QUARTERLY FUNDING REPORT

There was submitted Report No 502-2013 by the Director of Corporate Services which considered a report reviewing the current funding level of the Funds as assessed by the Fund Actuary.

The Sub-Committee noted the report.

VII APPOINTMENT OF PASSIVE MANAGER AND TRANSITION OF FUNDS

Following a procurement exercise, Legal and General Investment Management had been appointed as passive investment managers. On 31st October, approximately 10% (circa 230 million) of the main fund was transferred to their management from Alliance Bernstein with a remaining 15% of the main fund asset management mandate.

No change had been made at this time to the investment mandate with regards to country weightings.

VIII RBS CLASS ACTION

A verbal update was given regarding the RBS Class Action.

IX PRESENTATION

Graeme Rutter and Tony Doherty of Schroders gave a short presentation

Graeme Rutter gave an overview of the mandate and portfolio objectives, and it was noted that the Fund was continuing to out-perform the benchmark and that returns remained stable as sentiment improved within regional markets.

Thereafter, Tony Doherty gave an overview of the European element of the Fund, noting that it had been significantly reduced to ensure that there would not be negative impact to the Fund. Furthermore, some portfolio holdings had been consolidated, and the Fund was well placed for the coming year.

After they had completed their presentation and answered questions from members of the Sub‑Committee, they were thanked for their attendance and withdrew.

Willie SAWERS, Convener.