Pension Sub-committee And Pension Board - 06/06/2016

At a JOINT MEETING of the PENSION SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE AND THE PENSION BOARD held at Dundee on 6th June, 2016.

APPENDIX I

Present:-

PENSION SUB-COMMITTEE

Bailie Willie SAWERS

COUNCILLORS

PENSION BOARD

Bailie Willie SAWERS, Convener, in the Chair.

I DECLARATION OF INTEREST

There were no declarations of interest.

II TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 212-2016 by the Executive Director of Corporate Services updating the Risk Register for the Tayside Pension Funds.

The Sub-Committee and Board approved the updated Quarterly Risk Register for the Tayside Pension Fund and Tayside Transport Pension Fund and noted that there were no changes to risk profiles.

III REVIEW OF ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE POLICY

There was submitted Report No 213-2016 by the Executive Director of Corporate Services reviewing the Funds current policy on Socially Responsible Investing (Article III of the minute of meeting of the Pension Sub-Committee of the Policy and Resources Committee of 1st June, 2015, Report No 222‑2015 refers).

The Sub-Committee and Board noted the extension of independent voting guidelines beyond UK to global assets across Tayside Pension Fund portfolios to support effective capital ownership through the identification and mitigation of governance risk through active ownership and independent engagement.

IV INVESTMENT IN FOSSIL FUEL

There was submitted Report No 214-2016 by the Executive Director of Corporate Services reviewing the current position regarding the investment of fossil fuels following recent concerns being raised by environmental groups to local government pension funds in Scotland.

The Sub-Committee and Board noted the content of the report.

V STATEMENT OF INVESTMENT PRINCIPLES REVIEW

There was submitted Report No 215-2016 by the Executive Director of Corporate Services reviewing Statements of Investment Principles for the Tayside Pension Fund and the Tayside Transport Pension Fund.

The Sub-Committee and Board 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.

VI TAYSIDE TRANSPORT FUND

A verbal update as to current discussions with National Express, KPMG (their advisers), and Tayside Pension Fund actuaries was given. A verbal update was given as to current progress and alternative solutions were discussed. It was also noted that discussions were continuing and that a further update would be given at a future meeting.

VII GOVERNANCE COMPLIANCE STATEMENT

There was submitted Report No 216-2016 by the Executive Director of Corporate Services reporting setting out the governance arrangements of Tayside Pension Fund and the extent to which it complies with regulations.

The Sub-Committee and Board noted the content of the report.

VIII PENSION ADMINISTRATION PERFORMANCE

There was submitted Report No 217-2016 by the Executive Director of Corporate Services providing information on the recent operational performance of Pension Administration.

The Sub-Committee and Board noted the content of the report.

IX SUB-COMMITTEE AND PENSION BOARD TRAINING

A verbal update of self-assessment and training options was given and it was agreed that members contact the relevant officer directly regarding training packages.

The Sub-Committee and Board 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.

X TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 218-2016 by the Executive Director of Corporate Services relating to Performance Summaries for the Quarter 1, 3, 5 and 10 year time periods to 31st March, 2016 reviewing the investment performance of the Main Funds six Fund Managers (including property) and the M&G UK Financing Fund for the quarter 31st March, 2016. It also considered the performance of the Transport Fund which invests with four 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 and Board noted the information contained therein with regard to the performance of the Tayside Main Fund and Tayside Transport Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 192-2016 by the Executive Director of Corporate Services summarising investments and transactions during the period 1st January to 31st March, 2016 reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 31st March, 2016. The Transport Fund shared three of these managers and their transactions are included.

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

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

(c) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 75-2016 by the Executive Director of Corporate Services summarising investments and transactions during the period 1st September to 31st December, 2015 reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 31st December, 2015. 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 and Board noted the information contained therein with regard to the activities of the Tayside Pension Fund and Tayside Transport Pension Fund and their Fund Managers.

(d) QUARTERLY FUNDING REPORT

There was submitted Report No 219-2016 by the Executive Director of Corporate Services which considered the report by the Fund Actuary which reviewed the current funding level of the Funds.

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

XI SOCIALLY RESPONSIBLE INVESTMENT SIX MONTHLY REPORT

There was submitted Report No 220-2016 by the Executive 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 1st June, 2015. (Article V of the minute of meeting of the Pension Sub-Committee of the Policy and Resources Committee refers).

The Sub-Committee and Board noted the information contained within the report with regard to the activities of the Fund Managers during the six month period ended 31st March, 2016.

XII PRESENTATION

Jason Freeman and Jason Smith of GSAM gave a short presentation.

A summary of the performance of the portfolio for Quarter 1 was given, noting the key performance drives and comparison of this to benchmark figures.

It was noted that the Portfolio had underperformed for the quarter which was largely driven by the country and securitised selection, however, the government/swaps selection strategy had outperformed.

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

Willie SAWERS, Convener.