Agenda and minutes

RESOLVED:

That Mr. P. C. Osborne CC be elected Chairman of the Local Pension Committee for the period ending with the date of the Annual Council meeting in May 2018.

Mr. P. C. Osborne in the Chair

RESOLVED:

That Mr. L. Breckon JP CC be elected Deputy Chairman of the Local Pension Committee for the period ending with the date of the Annual Council meeting in May 2018.

The minutes of the meeting held on 17 March were taken as read, confirmed and signed.

The Chief Executive reported that no questions had been received under Standing Order 35.

The Chief Executive reported that no questions had been received under Standing Order 7(3) and 7(5).

There were no urgent items for consideration.

The Chairman invited members who wished to do so to declare any interest in respect of items on the agenda for the meeting.

Mr. L. Breckon JP CC declared a personal interest in all substantive items on the agenda as a member of the Leicestershire Local Government Pension Scheme as a result of his current employment.

The Committee considered a report of the Director of Corporate Resources, the purpose of which was to present a summary valuation of the Fund’s investments at 31 March 2017. A copy of the report is filed with these minutes, marked ‘8’

The Committee recognised the strong performance of many of the Fund’s assets which had resulted in its value increasing by over £128m in the three month period up to 31^st March 2017. In response to questions from members, the Director explained that whilst the Fund’s investment in Aspect Capital had underperformed in recent times, the portfolios return over a three year period was significantly above its benchmark and the drop in recent performance was due to specific market conditions that were unhelpful to their investment style. The extent of the underperformance was consistent with what would have been expected and officers were comfortable that they would continue to manage the portfolio in the expected manner.

RESOLVED:

That the report be noted.

The Committee considered a report of the Director of Corporate Resources which provided an update to members concerning the progress made towards the formation of the Local Government Pension Scheme (LGPS) Central Investment Pool. A copy of the report marked ‘9’ is filed with these minutes. The Committee also considered a presentation as part of this item, a copy of which is filed with these minutes.

The Director reported that the LGPS Central Pool, of which the Leicestershire Fund would be one of 9 member schemes, was on schedule to meet the requirement to be operational by April 2018.

Arising from discussion the following was noted;

·         Following the establishment of LGPS Central, the Local Pension Committee would continue to set the Leicestershire Fund’s strategic asset allocation thereby deciding which types of investments the Fund would invest in;

·         In order to establish the LGPS Central pool, the participating Funds had agreed to share the necessary set up costs with each fund required to contribute in the region of £500,000;

·         In addition to the initial contribution, each Fund was required to invest a further £2m by way of Regulatory Capital. The Leicestershire Fund’s significant cash flow meant that the contribution would have no impact on the investment activities of the Fund and the dividend/interest received from LGPS Central on the capital was likely to be higher than would be earned if the amount continued to be held as cash within the Fund;  

·         The Regulatory Business Plan, which would support the LGPS Central’s Financial Conduct Authority application, was expected to be approved by the LGPS Central Shadow Shareholders’ Forum on 19th June. Both the Director of Finance and Investments Manager had reviewed the document at length and were comfortable with its contents;

·         A common investment policy in certain areas would need to be established between the 9 Funds and the Committee would consider a report on the matter at a future meeting.    

RESOLVED:

That the report be noted.

The Committee considered a report by Hymans Robertson which presented the funding projection at 31 March 2017.  A copy of the report, marked ‘10’, is filed with these minutes. 

In response to questions from members the Director explained that various factors had contributed to the Fund’s deficit continuing to grow despite its assets significantly increasing over the past 12 months. Such factors included the continued low level of government bond yields on which the Fund’s actuary based the Fund’s expected future investment returns.

RESOLVED:

That the funding position of the Leicestershire Pension Fund as at 31 March 2017 be noted.

The Committee considered a report concerning global market conditions which was presented by the Fund’s Independent Investment Advisor. A copy of the report, marked ‘11’ is filed with these minutes. 

RESOLVED:

That the update be noted.

The Committee considered a report from the Director of Corporate Resources concerning the membership of the Investment Subcommittee for the period ending with the date of the annual Council meeting in May 2018. A copy of the report marked 12 is filled with these minutes.

RESOLVED:  

That the report be noted.

The Director of Corporate Resources presented a report, the purpose of which was to detail any concerns relating to the risk management and internal controls of the Fund. A copy of the report is filed with these minutes, marked ‘13’.

The Director reported that the Fund’s risk management was managed as part of the authority’s corporate risk register and since the Committee’s last meeting no additional risks had been identified.

RESOLVED:

That the report be noted.

RESOLVED:

That under Section 100(A) of the Local Government Act 1972 the public be excluded from the meeting for the remaining items of business on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Act.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Colliers Capital, a copy of which marked '16' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Aspect Capital, a copy of which marked '17' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Kleinwort Benson Investors, a copy of which marked '18' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Ruffer, a copy of which marked '19' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Pictet, a copy of which marked '20' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Millennium Global, a copy of which marked '21' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by IFM Investors, a copy of which marked '22' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Delaware Investments, a copy of which marked '23' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by JP Morgan, a copy of which marked '24' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Legal and General, a copy of which marked '25' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Ashmore, a copy of which marked '26' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Stafford Timberland, a copy of which marked '27' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Kempen Capital Management, a copy of which marked '28' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.

(Exempt under paragraphs 3 and 10 of Schedule 12A)

The Committee considered an exempt report by Aviva Investors, a copy of which marked '29' is filed with these minutes. The report was not for publication by virtue of paragraphs 3 and 10 of Part 1 of Schedule 12(A) of the Local Government Act 1972.

RESOLVED;

That the report be noted.