Agenda and minutes

No apologies were received.

(Councillors are reminded that there is no need to declare an

Interest if it has already been recorded on the register of

disclosable pecuniary interests (DPIs) or notified to the Monitoring

Officer in accordance with the regulations. However, Councillors

declaring interests must state what the DPI is and accordingly not

speak or vote on the item)

Councillor M G Allan requested that a note be made in the minutes that he was currently a contributing member of the Pension Fund as a North Kesteven District Councillor and as a County Councillor.

Mr A Antcliff requested that a note should be made in the minutes that he was currently a contributing member of the Pension Fund as an employee of Lincolnshire County Council.

Councillor M Leaning stated he was now a pensioner and in receipt of a pension from the fund.

Councillor R J Phillips declared a personal interest in all items on the agenda as a member of the Upper Witham Internal Drainage Board and as a contributing member of the Pension Fund.

Due to an administrative error, the minutes from the meeting of the Pensions Committee held on 24 July 2014 could not be ratified by the Committee and would be submitted to the Committee at its next meeting on 11 December 2014.

(A report by Peter Jones, the Committee's Independent Financial Advisor, which provides a market commentary by the Committee's Independent Advisor on the current state of global investment market)

Consideration was given to a report by Peter Jones, the Committee's Independent Advisor which provided a market commentary on the current state of global investment markets.

The UK economy was growing by 3% per annum and was in a cyclical recovery, but it would need a boost after the general election in 2015.

RESOLVED

That the report be noted.

(A report by Jo Ray, Pensions and Treasury Manager, which provides updates on current issues and Fund matters over the quarter ending 30th June 2014)

The Committee considered a report which updated Members on current issues and Fund matters over the quarter ending 30 June 2014.

Councillor N I Jackson updated the Committee following meetings of the Local Authority Pension Fund Forum.

It was reported that the transfer of pensions administration from Mouchel to West Yorkshire Pensions was going well.  The Collaboration Board had now had the first of its meetings which would be held quarterly.  A satellite office for West Yorkshire Pensions would be located within the main building of County Offices.  There was still a substantial amount of work to do before the transition in April 2015.

It was noted that Councillor Mrs S Rawlins joined the meeting.

Pensions staff previously employed by Mouchel would transfer to West Yorkshire Pensions and be able to join their pension scheme which was administrated by Bradford City Council.

RESOLVED

That the report be noted.

(A report by Nick Rouse, Investment Manager, which  covers the management of the Lincolnshire Pension Fund assets, over the period from 1st April to 30th June 2014)

Consideration was given to a report which updated the Committee on the management of the Lincolnshire Pension Fund assets over the period from 1 April to 30 June 2014.  The Investment Manager summarised the report for the Committee's benefit.

Neptune had previously indicated they would move back into emerging markets, which was done in Quarter 2 with a 3.9% performance against a benchmark of 3.8%.

It was confirmed that all figures quoted in the report were net of fees.  The fee charged for in-house investment management was 0.02%.

RESOLVED

That the report be noted.

(The quarterly pensions administration report from the pension administrator, Mouchel.

Graeme Hall, the Service Delivery Manager, will update the committee on current administration issues)

The Committee considered a quarterly report by the pension administrator, Mouchel which provided an update on current administration issues.  Stuart Duncombe from Mouchel was present.

The performance results for the period June 2014 to August 2014 extracted from the Task Management module showed that three services were underperforming slightly, but were expecting to rise.

There had been no praise or complaints received during the quarter. 

RESOLVED

That the report be noted.

(A report by Jo Ray, Pensions and Treasury Manager, which introduces a presentation from Invesco Asset Managers, who manage the Global ex UK Enhanced Index Equity Portfolio. Representatives of the manager will report on how our investments have performed)

The Committee was invited to consider a presentation from Invesco Asset Managers who maintained the Global ex UK Enhanced Index Equity Portfolio.  Michael Fraikin, Director Portfolio Management and Hugh Ferrand, Head of Institutional Sales and Service, were present.

Within the 9 years that Invesco had been running the Global Equities Mandate for the Fund, it had consistently achieved the target set and steadily outperformed.  It was currently ahead of the benchmark by 1% and had consistently delivered since inception.

As of the date of the meeting, there had been a slight decline in the market, which was likely to last around 3-6 months, however this would not impact on how the fund was managed.

Following the presentation, questions from the Committee were answered:

·         The portfolio's return of 1.6% was 0.6% over the requirements of the mandate.  Over 12 months, 1% could easily have been achieved with less risk, however managers felt the risk taken to achieve the extra return had not been high.  In coming years, there may not be an opportunity to take any risk at all;

·         The people working at Invesco were vital to running funds.  They were required to make the decisions, even though the number crunching was done by computers;

·         There was a risk management function embedded within the team and overseen by another risk function within Invesco to ensure funds were performing within the specifications of all portfolios;

·         Invesco had agreed 1% risk with the Council.  If it became advantageous to take more risk, it would be discussed with the Council, however 1% was a comfortable amount at the current time.

RESOLVED

That the presentation and report be noted.

(A report by Jo Ray, Pensions and Treasury Manager which brings the ISA 260 report to those charged with governance of the Pension Fund, submitted by the external auditors for the Council, KPMG)

Consideration was given to a report which brought the ISA 260 report to those charged with governance of the Pension Fund, submitted by the external auditors for the Council, KPMG.

Following a question, it was noted that the Bloomberg system was used for calculating exchange rates.

RESOLVED

That the report be noted.

(A report by Jo Ray, Pensions and Treasury Manager, which sets out the Pension Fund's longer term investment performance, for the periods ending 31st March 2014)

A report was considered which set out the Pension Fund's longer term investment performance, for the period ending 31^st March 2014.

At a previous  meeting, the Committee had agreed to continue using the WM Local Authority Universe to measure the performance of the fund against other authorities.  An update of the Fund's performance within the Universe was included in the report.

The long term performance analysis showed good performance overall, with an underperformance in only two years.

RESOLVED

That the report be noted.

(A report by Jo Ray, Pensions and Treasury Manager, which provides updates following the first meeting of the working group to discuss asset allocation, following the asset liability study undertaken by Hymans Robertson)

A report was considered that updated the Committee following the first meeting of the working group to discuss asset allocation, following the asset liability study undertaken by Hymans Robertson.

Peter Jones, the Committee's independent financial advisor gave a short presentation on asset allocation. 

The working group had been set up to discuss high level allocation between growth assets and low risk assets.  Its first meeting had been held on 22 September 2014.  An invitation to join the working group was extended to the Committee as there was currently only one Councillor representative.

The working group had made a number of proposals to the Committee which were outlined in the report.  Each proposal was discussed in turn and all were agreed.

It was noted that equities was a priority for the working group as it would have the biggest impact.  Property would be time consuming and a few different ideas from Hymans Robertson would need to be considered.

Members of the Committee would be notified of the date for the next working group.

RESOLVED

That the report be noted.