Councillor Henson stated that her apologies to the last meeting had been omitted from the minutes.

The Committee RESOLVED that, with the addition of the apologies stated above, the minutes be approved as a correct record of that meeting.
 

There were no disclosures.

There was no urgent business.

The allocation of the meeting between Part A and Part B was agreed as stated in the agenda.

The Head of Pensions and Treasury introduced the report and stated that the only significant change that had been made to the strategy was the removal of the annual Open Day event. Beyond this, the Committee were informed that the strategy remained unchanged.

The Committee RESOLVED to approve the Communication Policy Statement.
 

The Head of Pensions and Treasury introduced the report and drew the Committee's attention to paragraph 3.5, which contained the main change from the previous iteration of the strategy. In response to a question from the Committee it was confirmed that the cohabitation period was defined as a minimum of two years.

The Committee RESOLVED to approve the updated Administration Strategy Statement.
 

The Head of Pensions and Treasury introduced the report, noting that the Fund had now reached £1.1bn in value and drew the Committee's attention to paragraph 3.6 of the report which detailed the progress towards meeting the asset allocation targets.

The representatives from Aon Hewitt confirmed that the Fund was in a queue for M&G property investments due to the high demand for the fund manager's portfolio. The Committee's attention was also drawn to page 65 of the report, which illustrated that the past quarter had seen good returns from the Fund's assets.

The Committee NOTED the contents of the report.
 

The Chair moved the item to the end of the Part A agenda, to allow for transition into Part B if it were required.

The Head of Pensions and Treasury introduced the report on currency hedging which had been considered for a number of years by officers and Committee Members to address the risks associated with the weakening of sterling. The question for the Committee to address was what proportion of the exposure should be hedged and when such products should be purchased.

The representatives from Aon Hewitt delivered a presentation (found at Appendix 1 of the report) on the broader context and trends of currency markets and the role of hedging - which in the Croydon Fund context was to crystallise the gains made from a weaker sterling over the previous three years. In response to questions from the Committee it was stated that currency hedging was on the agenda of most local authority pension funds, with many actively implementing such hedging.
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The Committee asked officers detailed questions related to the hedging process and the risks associated therein. Members were informed that the fund manager currently used, L&G, were able to provide a currency hedging product in-house, and at a considerably low cost. The Committee discussed the benefits and drawbacks of such a scheme and came to a consensus that, in the principle, the low costs associated with currency hedging made it a prudent step to take.

The Committee RESOLVED that:

1. The foreign currency denominated equity component of the portfolio should be hedged, with an upper limit of no more than 50% of the value of foreign currency denominated listed equities;
2. The execution of any decision relating to currency hedging, including timing, be delegated to the Executive Director of Resources in consultation with the Chair of the Pensions Committee and the Cabinet Member for Finance and Treasury.
    

The Head of Pensions and Treasury stated that the report confirmed the conclusion of the procurement process for the scheme actuary. The contract had been split into three lots, as detailed within the report, and two providers had been chosen. The process had been undertaken through the National Framework which ensured good quality control and value for money.

The Committee RESOLVED to note the award under the National Local Government Pension Scheme Framework of the following Lots by the Executive Director of Resources (Section 151 officer):

Lot 1: Actuarial Services, to Hymans Robertson;
Lot 2: Benefits Consultancy, to Hymans Robertson; and
Lot 3: Governance Consultancy, to AON Hewitt.

Each contract to run for a period of four years.

The Head of Pensions and Treasury drew the Committee's attention to two paragraphs within the report. Paragraph 3.5 detailed the new fund managers and investments engaged with over the preceding period and paragraph 3.7 identified the calendar of proposed visit dates. Members were encouraged to attend the visits where possible as a useful opportunity to ask detailed questions of fund managers.

Following questions from the Committee it was confirmed that the fund managers regularly flew their senior staff around the world to meet with investors. Officers also committed to providing Members with a summary of each fund manager prior to the meetings.

The Committee NOTED the contents of the report.

The Head of Pensions and Treasury informed the Committee that the training log formed part of the annual report that would be submitted for approval at the September Pension Committee meeting. Members were invited to review the information provided in the log and submit any changes or amendments to the data contained therein.

In response to a question from the Committee it was confirmed that Pension Committee Members could access the Pension Regulator's free online training courses which had been provided to Pension Board Members.

The Committee NOTED the contents of the report.
 

Councillor: Pelling proposed, and Councillor: Henson seconded, to move the Camera resolution and take the remainder of the meeting into Part B.

The Committee RESOLVED to move into Part B of the agenda and thus exclude members of the press and public.