Venue: Committee Room A - County Hall, Llandrindod Wells, Powys. View directions
Contact: Carol Johnson 01597 826206
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Apologies To receive apologies for absence. Minutes: There were no apologies.
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Declarations of interest To receive any declarations of interest from Members relating to items to be considered on the Agenda. Minutes: 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.
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To authorise the Chair to sign the minutes of the last meeting held on 28 January, 2019 as a correct record. Minutes: The Chair was authorised to sign the minutes of the Pensions & Investment Committee meeting held on 28 January, 2019 as a correct record.
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Pensions Board minutes To receive a verbal report on the Powys Pensions Board meeting held on 5 March, 2019. Minutes: The Powys Pension Board Chair advised that the meeting on 5 March, 2019 had not taken place as the meeting was not quorate. The meeting would be rescheduled.
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Amendment to Risk Register PDF 62 KB To consider the report. Additional documents: Minutes: The Committee considered the report regarding the proposed amendment to the Risk Register, in respect of the migration to new software, as recommended by the Powys Pension Board.
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To consider the report and revised policy. Additional documents: Minutes: The Committee considered the Breaches Policy which provides detail on how individuals can identify, assess, record and report a breach of law relating to the Fund. It was noted that the Powys Pension Board had commented on the policy. The Pension Fund Manager advised that once approved, the Policy would be added to the Pension Fund’s website and a copy would be emailed to all employers.
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LGPS (Miscellaneous Amendment) regulations 2018 PDF 74 KB To note the report. Minutes: The Committee considered the report regarding actions required by the Administering Authority as a result of the LGPS (Miscellaneous Amendment) 2018 Regulations being laid before parliament in December, 2018.
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Exempt item 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. Minutes: RESOLVED to exclude the public for the following items 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).
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Benchmarking report To note the report. Additional documents:
Minutes: The Committee received the CEM Benchmarking Report. The Pension Fund Manager referred the Committee to the key points highlighted in the covering report and it was noted that the CEM had used a larger pool of LGPS funds to benchmark the Fund against for this report. As a result, this provided a fairer reflection of the fund. The Pension Fund Manager advised that officers had questioned the low property return information and CEM were reviewing this. It was noted that the benchmarking report gave a snapshot for the fund at a particular date.
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Wales Pension Partnership update To receive an update and consider the report. Additional documents:
Minutes: The Committee considered the report regarding the progress of the development of the fixed income sub funds, stock lending and the ongoing work of the Wales Pension Partnership (WPP).
In respect of the stock lending, the Pension Fund Manager advised that all eight pension funds in the WPP had to agree to participation. The Committee noted the advice from AON and that utilising stock lending would be another source of income for the Pension Fund. The Committee was advised that although there were some risks associated with the process it was widely used. AON advised that overall it was content with the information provided by potential providers but some issues still needed clarification. The Pension Fund Manager advised that in light of the latter he would advise WPP that a decision would be deferred to enable AON and officers to consider these outstanding issues. Some reservations were expressed by a Member regarding their knowledge base.
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Transition Management To consider the report. Minutes: The Committee considered the report and noted that the appointment of a Transition Manager mitigates some of the risk associated with a transition.
The Committee considered the Responsible Investment and Equity Protection items next.
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Responsible investment To consider a report on responsible investment. Additional documents:
Minutes: Jennifer O’Neil, Responsible Investment Specialist, AON joined the meeting via skype.
The Committee noted that a motion referring to responsible investment had been considered and supported by Council in January 2019 and the Pension Fund Manager advised that the Committee consider views expressed by Council and stakeholders. The Committee’s responses to the Responsible Investment survey were noted.
In response to questions, the Committee was reminded that it had a fiduciary duty in respect of the fund members. If it was minded to exclude an asset class from its portfolio, it had to have clear reasons for such an exclusion and whether such decisions aligned with the Investment Strategy. Economic, Social and Governance [ESG] issues should be discussed and considered but it was noted that the Pension Regulator also has focus on climate change risks, which should also be included in discussions. AON agreed to circulate its report on climate change and the challenges for pension funds to the Committee.
The Committee considered the issues of disinvestment from fossil fuels and the steps taken by other LGPS Pension Funds on this issue.
County Councillor A. Davies left the meeting.
A number of approaches had been used by other LGPS pension Funds. The Committee noted the summary timetable for its consideration of this issue in more depth and asked that details of the Funds current exposure to fossil fuels be provided as part of this discussion.
The items raised will be considered as work continues on the development of a Responsible Investment Policy for the Fund.
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Equity protection To consider the report. Minutes: Ken Ettles, AON joined the meeting via Skype.
As a result of the Committee’s decision to protect 50 % of total equities against a significant fall in value, it considered a further report from AON regarding the level of protection and the type of protection to be used.
County Councillor T Van-Rees left the meeting.
It was noted that if the Committee approved the proposal, it was expected that the Equity Protections could be in place by the end of March, subject to paperwork and legal reviews being completed.
AON advised that their Asset Allocation Team would report back to the Committee in Quarter 3.
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Quarterly Monitoring Report To conisder the report. Minutes: The Committee received the Q4 Quarterly Monitoring report. The Committee noted the market volatility in Q4 and that during January and February 2019 some of the losses had been regained.
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Medium Term Asset Allocation [MTAA] report To consider the report. Minutes: The Committee received the quarterly MTAA report and noted that performance was near the benchmark.
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Forward Looking business plan To note the report. Minutes: The Committee noted the Forward Looking business plan.
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Investment Strategy Statement [ISS] To consider the revisions to the ISS. Minutes: The Committee noted the changes to the Investment Strategy Statement [ISS]. It was noted that the document would be updated to reflect relevant decisions made by the Committee.
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Training Schedule To receive a verbal update. Minutes: The Committee agreed that training dates would be added to the diary, rather than trying to cover training on busy Committee meeting dates. The following training was noted: · Cyber security · Infrastructure investments and socially responsible investments · Cost transparency
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Insight Absolute Return Bond To consider the report. Minutes: The Committee considered the report regarding a new performance fee structure for the Insight Bonds, even for the short time period until the transition to the WPP Absolute Return Bond Strategy.
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