Pension Sub-committee And Pension Board - 02/03/2015

At a MEETING of the PENSION INVESTMENT SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 2nd March, 2015.

Present:-

Bailie Willie SAWERS

COUNCILLORS

Bailie Willie SAWERS, Convener, in the Chair.

Unless marked thus * all items stand delegated.

I DECLARATION OF INTEREST

No declarations of interest were made.

II TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 95-2015 by the Director of Corporate Services updating the Risk Register for the Tayside Pension Funds.

The Sub-Committee approved the updated Risk Register for the Tayside Pension Fund and Tayside Transport Pension Fund and noted the following changes to risk profiles and control measures:

- Risk 2 - Increased risk due to requirement for employers to provide additional information.

- Risk 6 - Reduced risk in employer inability to participate due to improved funding level.

- Risk 7 - Reduced risk in employer contribution rise due to installing 5% volatility reserve.

- Risk 12 - Increased risk of non-compliance due to vacant post.

- Risk 16 - Increased risk of over reliance on officer highlighted by vacant post.

- Risk 17 - Increased risk of communication failure due to lack of awareness of new scheme regulations.

III TAYSIDE PENSION FUNDS BUSINESS PLAN 2015/2016

There was submitted Report No 98-2015 by the Director of Corporate Services introducing the Eleventh Annual Business Plan for the Tayside Pension Funds.

The Sub-Committee noted the information within the report and approved the 2015/2016 Business Plan which applied to the administration and management of the Tayside Pension Fund and the Tayside Transport Pension Fund.

IV TREASURY MANAGEMENT STRATEGY

There was submitted Report No 99-2015 by the Director of Corporate Services reviewing the Treasury Management Strategy for Tayside Pension Fund.

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

V FUNDING STRATEGY STATEMENT

There was submitted Report No 93-2015 by the Director of Corporate Services reviewing the Funding Strategy Statements for Tayside Pension Fund and Tayside Transport Pension Fund.

The Committee approved the Funding Strategy Statements for Tayside Pension Fund and Tayside Transport Pension Fund.

VI STATEMENT OF INVESTMENT PRINCIPLES REVIEW

There was submitted Report No 100-2015 by the Director of Corporate Services reviewing Statement of Investment Principles for the Tayside Pension Fund and the Tayside Transport Pension Fund.

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

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.

VII TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 101-2015 by the Director of Corporate Services relating to Performance Summaries for the quarter, one, three, five year time periods to 31st December, 2014 reviewing the investment performance of the Main Fund's five Fund Managers (including Property) and the Financing Fund for the quarter to 31st December, 2014. 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 Fund's 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 Pension Fund and Tayside Transport Pension Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 86-2015 by the Director of Corporate Services summarising investments and transactions for the quarter to 31st December, 2014 reviewing activities of the Main Fund's seven Fund Managers for the quarter to 30th December, 2014. The Transport Fund shared three of these Managers and their transactions were included.

The report summarised the transaction 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.

VIII TAYSIDE PENSION FUNDS ACTUARIAL VALUATION AT 31ST MARCH, 2014

There was submitted Report No 92-2015 by the Director of Corporate Services which considered a report by the Fund Actuary updating the Committee on the Actuarial Valuation of the Tayside Pension Fund and the Tayside Transport Pension Fund at 31st March, 2014.

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

IX ANNUAL REVIEW OF INVESTMENT PERFORMANCE - MAIN FUND

There was submitted Report No 96-2015 by the Director of Corporate Services which considered report by the Fund's Investment Consultant "Annual Review of Investment Performance 2014" February 2015 and its opinion and recommendations.

The Sub-Committee noted the report in Appendix 1 and, in particular, the recommendations on individual investment managers. A further report would be brought back in due course as part of a wider review of the Fund.

X PRESENTATION

Jason Smith and Gillian Evans from Goldman Sachs Asset Management gave a 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 the Portfolio had slightly under performed its benchmark and that the corporate selection strategy was a huge contributor to excess return.

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

Willie SAWERS, Convener.