Agenda and minutes

Minutes of the meeting held on 2 December 2016, attached.

RESOLVED that the minutes of the meeting held on 2 December 2016 be signed as a correct record.

Items which in the opinion of the Chairman should be considered at the meeting as matters of urgency.

There was no item raised as a matter of urgency.

Report of the County Treasurer (CT/17/14).

The Committee considered the Report of the County Treasurer (CT/17/14) outlining progress with the establishment of the Brunel Pension Partnership including the recruitment of the Company Board, appointment of a Devon Representative on the Oversight Board, appointment of an Administrator to act as a custodian bank to safeguard investment assets and process transactions, and budgeted costs for 2017/18. The Committee noted that all ten administering authorities had now approved the full business case.

The Committee noted that each administering authority would appoint a representative to sit on the Oversight Board and that the final terms of reference had yet to be agreed; however discussions concerning employee representatives on the Board were still ongoing.

It was MOVED by Councillor Gilbert, SECONDED by Donna Healy, and

RESOLVED

(a) that the Devon representative on the Brunel Pension Partnership Oversight Board and the Devon shareholder representative for the Brunel Pension Partnership Limited company be appointed at the Devon County Council Annual Meeting on 25 May 2017;

(b) that the Committee noted the progress with establishing the Brunel Pension Partnership Limited company.

Report of the County Treasurer (CT/17/15).

The Committee noted the Report of the County Treasurer (CT/17/15) on the current fund values and asset allocations compared to the target set allocation as at 31 December 2016.

The Committee acknowledged that the value of the fund had increased to £3.777 billion over the period with an absolute return of +13.6% over the year to date, compared to the fund benchmark of +13%.  Equities were more than 2.5% over the target allocation; however there were no plans to rebalance pending consideration of the strategic investment review. Whilst the Fund performance was ahead of benchmark, concerns were raised around the performance of the active equity and bond managers who had underperformed their benchmarks.

Report of the County Treasurer (CT/17/16).

The Committee received and noted the report of the County Treasurer (CT/17/16) setting out the proposed treasury management strategy for managing the cash held by the Pension Fund for 2017/18.  The Committee were advised that the strategy was consistent with that agreed for 2016/17 and the target return for investments would remain at 0.40%, in line with the County Council’s target.

It was MOVED by Councillor Gilbert, SECONDED by Councillor O’Dwyer, and

RESOLVED that the Committee adopted the Treasury Management Strategy for 2017/18 as set out within the Report.

The following applications for admitted body status have been approved since the last meeting of the Committee:

(a)        South West Highways has won a contract with Plymouth from 1st April 2017 and will be taking over the contract from Amey. Approximately 30 staff currently in the LGPS with Amey will either transfer back to Plymouth or on to South West Highways. The agreement will be on a closed basis.

(b)        Ivybridge Academy has awarded a cleaning contract to Cormac which will commence 1st April 2017. One member of staff will transfer to this closed agreement.

(c)        Queen Elizabeth Academy has awarded a catering contract to Aspens from 1st April 2017.  Thirteen members of staff will transfer to this closed agreement.

The Committee noted that the following applications for admitted body status had been approved under delegated powers:

(a) South West Highways: from 1st April 2017 30 staff currently in the LGPS with Amey will either transfer back to Plymouth or on to South West Highways; the agreement will be on a closed basis.

(b) Ivybridge Academy: from 1st April 2017 one member of staff will transfer under this closed agreement.

(c) Queen Elizabeth Academy from 1st April 2017, 13 members of staff will transfer under this closed agreement.

Recommendation: that the press and public be excluded from the meeting for the following item of business under Section 100(A)(4) of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act, information relating to the financial or business affairs of an individual other than the County Council and, in accordance with Section 36 of the Freedom of Information Act 2000, by virtue of the fact that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED that the press and public be excluded from the meeting for the following item of business under Section 100(A)(4) of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act, information relating to the financial or business affairs of an individual other than the County Council and, in accordance with Section 36 of the Freedom of Information Act 2000, by virtue of the fact that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Report of the County Treasurer (CT/17/18).

(An item taken under Section 100A(4) of the Local Government Act 1972 during which the press and public were excluded, no representations having been received to such consideration under Regulation 5(5) of the  Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012).

The Committee received the report of the County Treasurer (CT/17/18) looking at the long term investment strategy of the Pension Fund.

It was then MOVED by Councillor Gilbert, SECONDED by Councillor Edgell, and               

RESOLVED

(a)     that the target allocations for Equities and Bonds be revised as set out in the report;

(b)    that in principle, the Fund should look to reduce its overweight to UK equities by reallocating to overseas equities which were underweight. As a consequence the County Treasurer in consultation with the Chairman be authorised to move up to £100m from UK passive equities to overseas passive equities, if market conditions provide an opportunity and the appropriate trigger points are hit;

(c)     that the remaining Wellington allocation to global bonds (around £70m) be moved on a phased basis to their multi-sector credit fund;

(d)    that Officers explore opportunities to collaborate with other Brunel funds to invest in private markets, and a further report be brought to a future meeting of the Committee;

(e)     that the medium to long term proposals set out in paragraphs 3.7 and 3.8 be approved in principle, subject to further review.

It was then MOVED by Councillor Gilbert SECONDED by Councillor Channon, and

RESOLVED that the press and public be now readmitted to the meeting.

Report of the County Treasurer (CT/17/17).

The Committee received the Report of the County Treasurer (CT/17/17) outlining new requirements for the each LGPS administering authority to have in place a new Investment Strategy Statement by 1 April drawing on the Strategic Review and the requirement to pool investments.

It was MOVED by Councillor Gilbert, SECONDED by Councillor Channon, and

RESOLVED that the proposed Investment Strategy Statement replacing the Fund’s existing Statement of Investment Principles be approved, subject to the removal of the last sentence in point b of the Social, Environmental and Corporate Governance Policy, in line with Environment Agency policy.

Recommendation: that the press and public be excluded from the meeting for the following item of business under Section 100(A)(4) of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act, information relating to the financial or business affairs of an individual other than the County Council and, in accordance with Section 36 of the Freedom of Information Act 2000, by virtue of the fact that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED that the press and public be excluded from the meeting for the following item of business under Section 100(A)(4) of the Local Government Act 1972 on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act, information relating to the financial or business affairs of an individual other than the County Council and, in accordance with Section 36 of the Freedom of Information Act 2000, by virtue of the fact that the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

Report of County Treasurer (CT/17/19).

(An item taken under Section 100A(4) of the Local Government Act 1972 during which the press and public were excluded, no representations having been received to such consideration under Regulation 5(5) of the  Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012).

The Committee noted the Report of the County Treasurer (CT/17/19) on the legal action taken against the Royal Bank of Scotland.