Pension Sub-committee And Pension Board - 03/09/2018

At a JOINT MEETING of the PENSION SUB-COMMITTEE of the POLICY AND RESOURCES COMMITTEE AND THE PENSION BOARD held at Dundee on 3rd September, 2018.

Present:-

PENSION SUB-COMMITTEE

BAILIES

Willie SAWERS

Kevin KEENAN

COUNCILLORS

Gregor MURRAY	Anne RENDALL	Brian GORDON
	Philip SCOTT

PENSION BOARD

Arthur NICOLL	Gordon MURRAY	George RAMSAY
Councillor Bob BRAWN		Kenny DICK

Bailie Willie SAWERS, Convener in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II MINUTE OF PREVIOUS MEETING

The minute of meeting of the Pension Sub-Committee and the Pension Board of 4th June, 2018 was submitted and approved.

III TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 271-2018 by the Executive Director of Corporate Services updating the Risk Register for Tayside Pension Fund.

The Sub-Committee and Board agreed to approve the updated Quarterly Risk Register for Tayside Pension Fund and to note the following changes to the risk profile from the previous report:-

(i) Risk 12 - Failure to comply with LGPS and other regulations which could result in wrong payments given or estimates provided

"Consolidated LGPS (Scotland) Regulations 2018 were issued in June without transitional regulations. To enable service continuity and to prevent retiring members not being without payment, pension estimates and payments are being calculated on the assumption that transitional regulations would be issued as expected from the letter of comfort issued by the Scottish Public Pensions Agency (SPPA) in July."

(ii) Risk 17 - Failure to communicate properly with stakeholders resulting in members not aware of their rights

"Due to the lack of clarity due to the omission of transitional regulations, we have been unable to communicate with stakeholders effectively in relation to the new regulations, particularly in relation to the ability for members between the age of 55 and 60 years being able to take their pension benefits (albeit reduced) without their employer's consent. Scottish LGPS funds were preparing a joint statement which would be submitted to the National Scheme Advisory Board requesting assistance in gaining immediate action from SPPA to issue transitional regulations as soon as possible."

IV PENSION ADMINISTRATION PERFORMANCE

There was submitted Report No 272-2018 by the Executive Director of Corporate Services providing information on the recent quarters operational performance in relation to Pension Administration.

The Sub-Committee and Board agreed to note the content of the report.

V TAYSIDE PENSION FUND ACCOUNTS 2017/2018

(a) TAYSIDE PENSION FUNDS 2017/2018 - ACCOUNTS AND AUDIT

There was submitted Report No 273-2018 by the Executive Director of Corporate Services on the outcome of the external audit of Tayside Pension Funds for the year to 31st March, 2018.

The Sub-Committee and Board agreed to note the content of External Auditor's Annual Audit Report, in particular that Audit Scotland anticipated issuing an unqualified audit opinion.

(b) DRAFT AUDITED STATEMENT OF ACCOUNTS 2017/2018

The above report was submitted and noted. (Report No 274-2018).

The above report was submitted and noted. (Report No 275-2018).

(d) TAYSIDE PENSION FUND AUDIT OF 2017/2018 ANNUAL ACCOUNTS

The above report was submitted and noted. (Report No 289-2018).

VI APPOINTMENT OF INVESTMENT CONSULTANT

There was submitted Report No 276-2018 by the Executive Director of Corporate Services informing of the appointment of KPMG as Investment Consultants for Tayside Pension Fund for a period of three years with a further two year extension based on satisfactory performance. This contract commenced on 2nd July, 2018.

The Sub-Committee and Board agreed to note the content of the report.

VII THE LOCAL GOVERNMENT PENSION SCHEME (SCOTLAND) REGULATIONS 2018

The Financial Services and Investment Manager reported that the Consolidated LPGS (Scotland) Regulations 2018 had been issued in June, 2018 without transitional regulations. Clarity as to the transitional regulations was awaited and any issues arising therefrom would be included in future Pension Administration Performance Reports.

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.

VIII TAYSIDE PENSION FUND

(a) PERFORMANCE SUMMARIES

There was submitted Report No 277-2018 by the Executive Director of Corporate Services reviewing the investment performance of the Funds Investment Managers for the quarter to 31st March, 2018. The report compared investment performance of the Fund with the Funds specific benchmarks which consisted of various stock and security market indices.

The Sub-Committee and Board agreed to note the information contained therein with regard to the performance of the Tayside Main Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 264-2018 by the Executive Director of Corporate Services reviewing the investment activities of the Main Funds seven Fund Managers for the quarter to 30th June, 2018.

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

The Sub-Committee and Board agreed to note the information contained therein with regard to the activities of the Tayside Pension Fund and its Fund Managers.

There was submitted Report No 279-2018 by the Executive Director of Corporate Services reviewing the current funding level of the Fund as assessed by the Fund Actuary.

The Sub-Committee and Board agreed to note the report.

IX PRESENTATIONS

(a) FIDELITY

David Barber and Jeremy Podger of Fidelity gave a short presentation outlining the transition from individual regional equity funds to a single global equity portfolio in March, 2018. Members noted the benefits of the single global equity fund and improvements to fund performance since the transition.

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

(b) KPMG

Dave Lyon and David O'Hara from KPMG gave a short presentation, introducing themselves to the Sub-Committee and Board, and outlining their previous experience in dealing with the Tayside Pension Fund. Thereafter, they outlined proposals to revisit the investment strategy to enhance performance of the portfolio.