Agenda and minutes

Derbyn ymddiheuriadau am absenoldeb.

Apologies for absence were received from County Councillor EA Jones.

Derbyn unrhyw ddatganiadau o ddiddordeb gan Aelodau yn ymwneud ag eitemau i’w hystyried ar yr Agenda.

Members of the Committee declared interests as members of the Local Government Pensions Scheme. These are personal interests, not prejudicial interests in accordance with Paragraph 12(b) (iv) of the Members Code of Conduct 2016.

To authorise the Chair to sign the minutes of the meetings held on 29 September and 17 November 2017 as correct records.

The Chair was authorised to sign the minutes of the meetings held on 29 September and 17 November 2017 as correct records.

The Chair advised that he was changing the running order of the agenda and that he would take the minutes of the Pensions Board when the Chair of the Board arrived.

To consider the report of the Acting Director of Resources.

The Committee was advised that the last remaining active member of the Powys LGPS employed by Camping & Caravanning Club had left their employment and that therefore the Club was no longer a participating employer in the Pension Fund.

The Fund had joined the National LGPS Framework for Investment Management Performance and Cost Monitoring and Reporting Services and officers were in the process of engaging suppliers on the Framework to procure the relevant services.

Chris Archer and Becky Durran from Aon Hewitt gave an update on the actuarial position. The Fund had gone from 80% funded as at 31 March 2016 to 91% funded as at 30 September 2017 having benefitted from a 24% return on investments in the period. Investment returns could not be expected to continue at this rate. The average employer contribution in 2017/18 was 24.3% of pay, made up of 18.6% primary rate employer’s contribution and stepping contributions made by the County Council. The expected recovery period was 22 years.

Mr Gerard Moore and County Councillor Aled Davies arrived during the presentation. 

To receive for information the draft minutes of the Powys Pensions Board meeting held on 20^th October 2017.

The Committee received the minutes of the last meeting of the Powys Pensions Board meeting held on 20^th October.

The Pensions Board had asked to be given an input into statements issued by the Fund, when timing allowed. 

The Chair of the Pensions Board advised that the reference in the minutes to a fine imposed by the Information Commissioner should refer to an English County Council rather than a Pension Fund.

The Pensions Manager advised that since the update report to the Pensions Board on the Markets in Financial Instruments Directive II (MIFID II) two further managers had responded to say that the Fund met the required criteria to operate at this level and another 4 had yet to respond. The Chair of the Board was pleased to note that the investment advisers had opted up.    

The Chair of the Committee requested that the Acting Chief Executive and Acting Section 151 Officer be asked to confirm that the training programme was MIFID compliant.

The Monitoring Officer has determined that category  3 of the Access to Information Procedure Rules applies to the following items. His view on the public interest test (having taken account of the provisions of Rule 14.8 of the Council's Access to Information Rules) was that to make this information public would disclose information relating to the financial or business affairs of any particular person (including the authority holding that information).

These factors in his view outweigh the public interest in disclosing this information. Members are asked to consider these factors when determining the public interest test, which they must decide when considering excluding the public from this part of the meeting.

RESOLVED to exclude the public for the following item of business on the grounds that there would be disclosure to them of exempt information under category 3 of The Local Authorities (Access to Information) (Variation) (Wales) Order 2007).

To consider a report by Aon Hewitt.

The Committee was advised that equities continued to rise in value and there had been a modest increase in the value of the Fund.

The Committee was also advised that Aon Hewitt had downgraded their view of Schroders as their investment style was not suited to the current market. The funds under their management had been moved into the passive equity fund prior to the establishment of the pooled fund.

Aon Hewitt advised that a period of market volatility was expected once quantitative easing was reigned in and interest rates began to rise, but equities remained good value.

To consider a report by Aon Hewitt.

The value of the Fund as at 30 November stood at £621.765m.

To consider a report by Aon Hewitt.

The Fund had outperformed the benchmark by being overweight in equities and underweight in bonds.

To consider a report by Aon Hewitt.

The Committee noted the long term business plan.

The Pension Fund Manager advised that the preferred bidder appointment for the Pooled Fund had been delayed. Pension fund managers were due to meet on 20 December to start the process of establishing the pooled fund. The Committee discussed their role once the pooled fund had been established. The Committee would no longer be involved in the appointment of investment managers and would instead concentrate on asset allocation.  

To consider a report by Aon Hewitt.

The Committee received the update report on the hedge fund transition.

To receive a verbal report from Aon Hewitt.

The Committee was advised that a decision did not have to be taken until the next meeting.

To receive details of stock lending carried out on the passive funds from BlackRock.

The Committee was advised that the Fund benefitted from stock lending, receiving a proportion of the fees charged by the investment managers. This was how passive managers offset their expenses. Aon Hewitt had asked for this information to be provided annually.

To consider a report by Aon Hewitt.

The Committee received the report from Aon Hewitt. Infrastructure was an asset class the Pooled Fund would look to invest in.

The Committee received training on fixed income.