Pension Sub-committee And Pension Board - 21/03/2022

At a JOINT MEETING of the PENSION SUB-COMMITTEE of the POLICY AND RESOURCES COMMITTEE AND THE PENSION BOARD held remotely on 21st March, 2022.

Present:-

PENSION SUB-COMMITTEE

BAILIES

COUNCILLORS

PENSION BOARD

Bailie Willie SAWERS, in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II APOLOGIES

The Sub-Committee and Board noted that no apologies had been made from Councillor McIrvine.

III MINUTE OF PREVIOUS MEETING

The minute of meeting of 13th December, 2021 was submitted and approved.

IV RISK REGISTER

There was submitted Report No 82-2022 by the Executive Director of Corporate Services updating the Risk Register for the Tayside Pension Fund.

The Sub-Committee approved the Quarterly Risk Register for Tayside Pension Fund which was updated on 20th September, 2021, and noted the following changes to risk profile since the previous report:-

- Equity Risk (No 10) The risk of financial loss to the fund caused by substantial market sector falls.

- Active Manager Risk (No 11) - The risk of financial loss to the fund caused by investment manager underperformance.

The risk likelihood of these risks materialising in the short-term had increased due to current global events and extreme market volatility. Fund officers remain in close communication with investment managers in addition to existing performance monitoring.

V PROCUREMENT POLICY

There was submitted Report No 101-2022 by the Executive Director of Corporate Services introducing a formal Procurement Policy for Tayside Pension Fund. The policy set out the minimum standards and requirements for managing outsourcing and third party service providers across the key stages of the outsourcing lifecycle, and the criteria for assessing value for money of the functions and activities that were outsourced to third parties.

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

VI TAYSIDE PENSION FUND TRAINING PLAN 2022/2023

There was submitted Report No 83-2022 by the Executive Director of Corporate Services presenting Tayside Pension Funds Training and Attendance Policy which was subject to annual review and the Training Plan for 2022/2023.

The Sub-Committee and Board approved the Training Plan for 2022/2023 contained in the report, noting that due to the continuing challenges as a result of Covid-19, there were aspects of the training requirements of 2021/2022 that had not been fully achieved. These had been carried forward to the 2022/2023 plan.

VII PENSION ADMINISTRATION PERFORMANCE - QUARTERLY UPDATE TO 31ST DECEMBER, 2021

There was submitted Report No 84-2022 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 noted the content of the report.

VIII TAYSIDE PENSION FUND AUDIT SCOTLAND ANNUAL AUDIT 2021/2022 PLAN

There was submitted Report No 85-2022 by the Executive Director of Corporate Services providing a summary of the responsibilities and approach of Audit Scotland in respect of Tayside Pension Fund for 2021/2022.

The Sub-Committee and Board agreed to:-

(i) note the content of the report by Audit Scotland (Appendix 1); and

(ii) provide Audit Scotland with confirmation of any instances of actual, suspected or alleged fraud, as a requirement of the revised International Standard on Accounting (ISA) 240.

IX INTERNAL AUDIT RISK ASSESSMENT AND AUDIT PLAN 2022/2023

There was submitted Report No 86-2022 by the Executive Director of Corporate Services setting out the risk assessment undertaken by PwC and details their internal audit plans for Tayside Pension Fund for 2022/2023.

The Sub-Committee and Board reviewed and approved the Internal Audit plan by PricewaterhouseCoopers (PwC) as detailed in appendix A to the report.

X TAYSIDE PENSION FUND INTERNAL AUDIT REPORT - RISK MANAGEMENT AND REGULATORY COMPLIANCE REVIEW

There was submitted Report No 87-2022 by the Executive Director of Corporate Services submitting to the Sub-Committee and Board the Audit Report prepared by the Funds Internal Auditor, PricewaterhouseCoopers (PwC).

The Sub-Committee and Board noted the content of the report on the audit exercise undertaken, and approved the management response.

XI TAYSIDE PENSION FUND INTERNAL ANNUAL AUDIT REPORT 2021/2022

There was submitted Report No 88-2022 by the Executive Director of Corporate Services submitting to the Sub-Committee and Board the Annual Audit Report for 2021/2022 prepared by the Funds Internal Auditor, PricewaterhouseCoopers (PwC).

The Sub-Committee and Board noted the content of the Annual Report as well as the content of the appended reports on specific audit exercises undertaken, and approved the management response.

XII TREASURY POLICY STATEMENT 2022/2023

There was submitted Report No 89-2022 by the Executive Director of Corporate Services revising the Funds Treasury Policy Statement which was intended to govern all treasury activities carried out by Tayside Pension Fund.

The Sub-Committee and Board approved the policies and procedures laid out in the attached Treasury Policy Statement 2022/2023. The Treasury Policy Statement would require to be reviewed annually.

XIII TREASURY MANAGEMENT STRATEGY 2022/2023

There was submitted Report No 90-2022 by the Executive Director of Corporate Services reviewing the Treasury Management Strategy for Tayside Pension Fund.

The Sub-Committee and Board approved the Treasury Management Strategy.

XIV PENSION ADMINISTRATION STRATEGY

There was submitted Report No 91-2022 by the Executive Director of Corporate Services setting out the Funds policy in respect of the standards required of both the Fund and the participating employers to ensure that statutory obligations were met and also to demonstrate effective and efficient service delivery. The strategy contained a variety of performance measures against which the Fund and participating employers were assessed, with performance reported to the Committee.

The Sub-Committee and Board approved the strategy contained within the report, noting that there were no changes.

XV TAYSIDE PENSION FUND COMMUNICATION POLICY

There was submitted Report No 92-2022 by the Executive Director of Corporate Services presenting a communications policy as required by the Local Government Pension Scheme (Scotland) Regulations 2014.

The Sub-Committee and Board approved the revised Communications Policy which had been reviewed in conjunction with the Funds Administration Strategy, noting the change in relation to telephone communications following the Contact Centre implementation, and the Member Self-Service Portal.

XVI REVISED ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE POLICY

There was submitted Report No 93-2022 by the Executive Director of Corporate Services proposing a revision to the Fund's current policy on Socially Responsible Investment (Article VI of the Minute of Meeting of the Pension Sub-Committee of the Policy and Resources Committee of 21st June, 2021, Report No 198-2021 refers).

The Sub-Committee and Board approved the revised Environmental, Social and Corporate Governance Policy for the Tayside Pension Fund (Appendix 1 to the report), noting the additional measures now incorporated into this revised policy in relation to investment in fossil fuel companies.

XVII STATEMENT OF INVESTMENT PRINCIPLES REVIEW

There was submitted Report No 94-2022 by the Executive Director of Corporate Services reviewing Statement of Investment Principles for Tayside Pension Fund.

The Sub-Committee and Board noted the information within the report and approved the Statements of Investment Principles contained in Appendix 1 to the report.

XVIII TAYSIDE PENSION FUND BUSINESS PLAN 2022/2023

There was submitted Report No 95-2022 by the Executive Director of Corporate Services introducing the annual business plan for the Tayside Pension Fund.

The Sub-Committee and Board noted the information contained within the report and approved the 2022/2023 Business Plan which applied to the administration and management of the Tayside Pension Fund.

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.

XIX EXITING EMPLOYERS UPDATE

A verbal update was given to members of the Pension Sub-Committee and Pension Board.

XX TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 96-2022 reviewing the investment performance of the Funds Investment Managers for the quarter to 31st December, 2021. 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 noted the information contained therein with regard to the performance of the Tayside Main Fund and their Fund Managers.

(b) TAYSIDE PENSION FUND SUMMARIES OF INVESTMENTS AND TRANSACTIONS 1ST OCTOBER TO 31ST DECEMBER, 2021

There was submitted Report No 97-2022 by the Executive Director of Corporate Services reviewing the investment activities of Tayside Pension Funds five Fund Managers for the quarter to 31st December, 2021 and summarising the transactions of each Fund Manager and showing the market values of the Pension Fund.

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

(c) QUARTERLY FUNDING UPDATE AS AT 31ST DECEMBER, 2021

There was submitted Report No 98-2022 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 noted the content of the report.

(d) SECURITIES LENDING 6 MONTH ACTIVITY TO 31ST DECEMBER, 2021

There was submitted Report No 99-2022 by the Executive Director of Corporate Services presenting an update on Securities Lending activity for the period ended 31st December, 2021.

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

XXI ANNUAL PERFORMANCE REVIEW TO 31ST DECEMBER, 2021

There was submitted Report No 100-2022 by the Executive Director of Corporate Services considering the Isio report Annual Review of Investment Performance 2021 completed in February, 2022.

The Sub-Committee and Board noted the content of the Isio report in Appendix A to the report.

XXII PRESENTATION

Jason Freeman, Dominic Solomon and Neil Moge of GSAM gave a short presentation to the Sub‑Committee and Board.

After Mr Freeman, Mr Solomon and Mr Moge had given their presentation and answered questions from members, the Chair thanked the presenters on behalf of members of the Sub-Committee and Board.

Willie SAWERS, Chair.