Pension Sub-committee And Pension Board - 04/09/2017

At a JOINT MEETING of the PENSION SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE AND THE PENSION BOARD held at Dundee on 4th September, 2017.

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 287-2017 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 the following in relation to the risk profile from previous report:-

(i) RISK 13 - FAILURE TO HOLD PERSONAL DATA SECURELY (INCORPORATING THE RISK OF CYBERCRIME)

This risk had been reconfigured and re-evaluated. It would now be amended to incorporate the threat of Cybercrime. Although the risk had been heightened as a result of this re-evaluation, it may be subject to imminent adjustment as the Council IT Services were awaiting the outcome of an independent Cybersecurity Readiness Audit.

(ii) RISK 15 - LACK OF EXPERTISE ON PENSION COMMITTEE, PENSION BOARD OR AMONGST OFFICERS

The risk would remain until new Sub-Committee and Board members had undertaken appropriate training to provide them with sufficient knowledge and expertise to fully undertake their roles. It was however important to note the sufficient knowledge and expertise remained on both Sub-Committee and Board as well as that of officers to mitigate significant increase in risk.

III PENSION ADMINISTRATION PERFORMANCE

There was submitted Report No 288-2017 by the Executive Director of Corporate Services providing information on the recent quarter's operational performance in relation to Pension Administration.

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

IV REPATRIATION OF TRANSPORT FUND

A verbal update was given to members by the Head of Corporate Finance regarding the full reparation of Transport Fund on 30th June, 2017.

V MARKETS IN FINANCIAL INSTRUMENTS DIRECTIVE (MIFID II)

There was submitted Report No 289-2017 by the Executive Director of Corporate Services providing information on the rules for implementation of the Markets in Finance Instruments ("MiFID II"), effective from 3rd January, 2018.

The Sub-Committee and Board noted the content of the report and the intention for Tayside Pension Fund officers to apply to "opt-up", thus electing to be treated as "professional" (rather than "retail") clients.

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.

VI TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 290-2017 by the Executive Director of Corporate Services relating to Performance Summaries for the quarter, 1, 3 and 5 year time periods to 30th June, 2017.

This report reviewed the investment performance of the Main Fund's five Fund Managers (including Property) for the quarter 30th June, 2017. It also considered the performance of the Transport Fund which invested with four of the 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 and Board noted the information contained therein with regard to the performance of the Tayside Fund and Tayside Transport Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 280-2017 by the Executive Director of Corporate Services summarising investments and transactions during the period 1st April to 30th June, 2017 reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 30th June, 2017. 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.

(c) QUARTERLY FUNDING REPORT

There was submitted Report No 291-2017 by the Executive Director of Corporate Services which concerned a report by the Fund Actuary.

The Sub-Committee and Board noted the report accordingly.

VII ALTERNATIVE INVESTMENT OPPORTUNITY - BROAD STREET REAL ESTATE CREDIT PARTNERS

There was submitted Report No 292-2017 by the Executive Director of Corporate Services providing details of an investment case which had been successful in meeting the relevant investment criteria required within the Local and Alternative Opportunities Portfolio.

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

VIII PRESENTATION

Jason Smith and Jason Freeman from Goldman Sachs Asset Management gave a presentation to members.

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 due to volatility in the market, however, it was expected that future quarters would achieve consistent stable returns due to the stock selection strategies.

Future fund operational strategies were discussed, with members having an opportunity to ask questions of the Fund Managers.

The Convener thanked Jason and Jason for their interesting and informative presentation.

Willie SAWERS, Convener.