Present:-

Devon County Council:-

Councillors Boyd (Chairman), Brook, Gilbert, Greenslade, Radford, Randall Johnson and Squires.

Unitary and District Councils:-

Councillors Hicks (Exeter LGA Devon), Fox and Dr Mahony (Plymouth City Council).

Union and Retired Members: Non-Voting Observers:-

Mr Franceschini and Mr Lomax.

Apologies:-

Devon County Council: Councillors Dezart, Edgell, Hill, Hannon and Wright.

Union and Retired Members: Mrs Parker.

*25 Minutes

RESOLVED that the minutes of the meeting held on 22 November 2013 be signed as a correct record.

*26 Update on current Local Government Pension Scheme issues

The Committee received the report of the County Treasurer (CT/14/18 - text only | pdf CT/14/18) outlining the latest position in relation to revised governance arrangements for the Local Government Pension Scheme (LGPS) in response to the Public Sector Pensions Act 2013, including the role of the Pensions Regulator, and on the latest position in relation to the review of the structure of the LGPS.

Members asked questions around the long term objectives behind the revised governance arrangements as a result of the Act and expressed concern over the potential loss of local accountability and decision making that could arise from LGPS Fund re-structuring.

The County Treasurer advised the Committee that the Council s Head of External Affairs had alerted Devon Members of Parliament (MPs) to some of the concerns that may arise from the re-structuring of LGPS Funds, but that further engagement with MPs through individual Members of the Committee may also be beneficial.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED

(a) that the current position in relation to proposed changes to governance arrangements and the review of the structure of the LGPS be noted;

(b) that the County Treasurer circulate by email a briefing note on concerns arising from the LGPS re-structure, which Members may use to seek engagement with their local MPs.

*27 Global Custodian Services Contract Review

The Committee received the report of the County Treasurer (CT/14/19 - text only | pdf CT/14/19) outlining the expiration of the Pension Fund s current global custodian service contract with J.P Morgan and the need to review and re-tender the contract. The report provided the Committee with details of the benefits of using the National LGPS Framework for Global Custody Services.

In response to Members questions the County Treasurer confirmed that the framework set a maximum price for services, but competition for work would exist between the suppliers within the framework. It was therefore expected that competitive bids will be made by suppliers, resulting in the Pension Fund receiving a good quality and value for money service.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED

(a) that the use of the National LGPS Framework Agreement to secure a new contract for Global Custody Services be agreed;

(b) that the Chairman be authorised to approve the appointment process and all relevant decisions in consultation with the County Treasurer.

*28 Restructuring of the Probation Service

The Committee received the report of the County Treasurer (CT/14/20 - text only | pdf CT/14/20) outlining the effect of the reform of the Probation Service on the Devon Pension Fund.

In response to Members questions the County Treasurer confirmed that there would be a transaction cost to the Pension Fund in the liquidation of assets should the required asset transfer to the Greater Manchester Pension Fund (GMPF) be made in cash, but that all pension liability and any risk associated with that would be transferred to the GMPF.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED

(a) that the changes to the Probation Service and the arrangements made to transfer responsibility for the Devon and Cornwall probation Service to the Greater Manchester Pension Fund be noted;

(b) that the County Treasurer implement the required transfer of assets, to be funded from the allocation to passive equities.

*29 Investment Management Report

The Committee received the report of the County Treasurer (CT/14/21 - text only | pdf CT/14/21) on the fund value and asset allocation against target, the Fund s performance and cashflow and cash management. The Committee heard that the Fund s return for nine months to 31 March 2013 was 1.6% below the Fund s customised benchmark, almost entirely as a result of poor performance in the first quarter.

In response to Members questions the County Treasurer confirmed that the difference between the amount of contributions received and the benefits paid out by the Fund was due to the Fund s maturing state which saw benefits being paid out over longer periods of time due to rising life expectancy, alongside decreasing numbers of pension scheme members contributing to the Fund, as local authorities retainied fewer staff than in previous years.

The County Treasurer assured the Committee that the Pension Fund would be working with the Fund s Actuary to provide a revised cashflow forecast looking ahead over a 20 year period, which would be brought to the Committee before the end of the calendar year. The County Treasurer also reminded Members that recent and upcoming changes in LGPS regulations, including auto-enrolment and contribution flexibility which allowed pension scheme members to pay smaller contributions, may increase the amount of contributions the Fund received in the future.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED

(a) that the Investment Management report be noted;

(b) that the compliance with the 2013/14 Treasury Management Strategy be noted.

*30 Treasury Management and Investment Strategy 2014/15

The Committee received the report of the County Treasurer (CT/14/22 - text only | pdf | supplementary information CT/14/22) and the Treasury Management and Investment Strategy, setting out the Fund s schedule of investments, prospects for interest rates and the Investment and Borrowing Strategies for 2014/15 2016/17.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED that the Treasury Management and Investment Strategy for 2014/15 be adopted.

*31 CIPFA Code of Practice on Knowledge and Skills

The Committee received the report of the County Treasurer (CT/14/23 - text only | pdf CT/14/23) outlining the areas covered by the CIPFA Code of Practice on Public Sector Finance Knowledge and Skills, and the benefits that adopting the Code of Practice will provide.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED

(a) the CIPFA Code of Practice on Public Sector Finance Knowledge and Skills and the statement as set out in Appendix 1 to Report CT/14/23 - text only | pdf CT/14/23 be formally adopted by the Committee;

(b) that action be taken to implement the Knowledge and Skills Framework and that the arrangements for the training day on Friday 28 March be noted.

*32 Applications for Admitted Body Status

The Committee noted that the application from Torbay Community Development Trust for admitted body status had been approved under delegated powers.

*33 Annual Consultative Meeting with Staff and Retired Members

Members of the Committee were reminded that they were welcome to attend the Annual Consultative Meeting which was due to commence at 2.15pm that afternoon. Presentations were to be made by Mark Gayler, Assistant County Treasurer, Charlotte Thompson, Head of Peninsula Pensions and Jonathan Neill from Fabian Pictet and Partners.

*34 Dates of Future Meetings

2014

16 May 2014

12 September 2014

21 November 2014

2015

27 February

*35 Exclusion of Press and Public

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, namely information relating to financial or business affairs of another person and that of the County Council and disclosure of which would be likely to inhibit the free and frank provision of advice and exchange of views for the purposes of deliberation, 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.

*36 Legal Action against the Royal Bank of Scotland

The Committee received the report of the County Treasurer (CT/14/24) outlining the Council s proposal to take legal action against the Royal Bank of Scotland.

It was MOVED by Councillor Boyd, SECONDED by Councillor Radford and

RESOLVED that the Devon Pension Fund pursue a claim against the Royal Bank of Scotland for recovery of monies, as set out in the County Treasurer s report.

*DENOTES DELEGATED MATTER WITH POWER TO ACT

The meeting started at 10.10am and finished at 11.25 am.

The Minutes of the Committee are published on the County Council s Website at: