Agenda and minutes

Pension Committee
Tuesday, 5th December, 2017 10.00 am

Venue: Council Chamber, Town Hall, Katharine Street, Croydon CR0 1NX. View directions

Contact: James Haywood
020 8726 6000 x63319  Email: james.haywood@croydon.gov.uk

Items
No. Item

1/17

Minutes of the Previous Meeting pdf icon PDF 67 KB

To approve the minutes of the meeting held on Tuesday 19 September 2017 as an accurate record.

Minutes:

The minutes of the meeting held on 19 September 2017 were agreed as an accurate record.

 

2/17

Disclosure of Interests

In accordance with the Council’s Code of Conduct and the statutory provisions of the Localism Act, Members and co-opted Members of the Council are reminded that it is a requirement to register disclosable pecuniary interests (DPIs) and gifts and hospitality to the value of which exceeds £50 or multiple gifts and/or instances of hospitality with a cumulative value of £50 or more when received from a single donor within a rolling twelve month period. In addition, Members and co-opted Members are reminded that unless their disclosable pecuniary interest is registered on the register of interests or is the subject of a pending notification to the Monitoring Officer, they are required to disclose those disclosable pecuniary interests at the meeting. This should be done by completing the Disclosure of Interest form and handing it to the Democratic Services representative at the start of the meeting. The Chair will then invite Members to make their disclosure orally at the commencement of Agenda item 3. Completed disclosure forms will be provided to the Monitoring Officer for inclusion on the Register of Members’ Interests.

 

Minutes:

There were none.

3/17

Urgent Business (if any)

To receive notice of any business not on the agenda which in the opinion of the Chair, by reason of special circumstances, be considered as a matter of urgency.

 

Minutes:

There were no items of urgent business.

 

4/17

Adoption of Risk Management Policy pdf icon PDF 82 KB

Additional documents:

Minutes:

The Head of Pensions and Treasury introduced the report to the Committee and guided Members through the proposed policy.

 

The Committee RESOLVED to:

1.1       Adopt the Risk Management Policy

1.2       Direct the Executive Director of Resources (Section 151 Officer) to commission a review of the Fund's practices against the Pension Regulator's Code of Practice Number 14 - Governance and administration of public service pension schemes.

 

 

5/17

Review of Risk Register pdf icon PDF 57 KB

Additional documents:

Minutes:

The Head of Pensions and Treasury introduced the report and attention was drawn to areas categorised as “amber” risks.

 

Committee Members asked questions related to the ongoing risks of academies contributing towards the deficit. Reassurances were made regarding risks associated with the implementation of MIFD II. The considerable number of policy and governance documents were proffered as examples of mitigating against reputational and unforeseeable risks in the future.

 

The Committee NOTED the Pension Fund Risk Register.

 

 

6/17

Annual Report on the Progress of Asset Transfer to the London CIV pdf icon PDF 65 KB

Minutes:

The Head of Pensions and Treasury provided an update on the Fund’s asset transfer into the London CIV; it was noted that the equities investments in Legal and General were treated as pooled investments as well. Whilst there was still a way to go for the London CIV to provide the sub-funds necessary for the Croydon Pension Fund, progress was being made and over half of the Fund’s assets were now within the London CIV.

 

The Committee NOTED the contents of the report.

 

 

7/17

MiFID II Compliance Requirements pdf icon PDF 68 KB

Minutes:

The Head of Pensions and Treasury provided the Committee with an update on officers’ submissions as part of the MIFD II directive requirements. Members were assured that progress was going in the right direction and no immediate concerns had been identified.

 

Members discussed the need to provide an audit trail of training sessions completed and officers stated that most conferences and seminars were free of charge for Committee Members.

 

The Committee NOTED the contents of the report.

8/17

Forward Plan pdf icon PDF 90 KB

Minutes:

The Head of Pensions and Treasury introduced the proposed forward plan for the coming year, as part of the six-monthly review cycle for the Committee.

 

Some Committee Members reported on a meeting with Wellington and Wells Fargo they had attended. Some concern was expressed regarding the reputational damage to the Fund if it invested in Wells Fargo given the recent scandal that had been reported in its retail arm. It was noted that there was a clear division between the retail section and the investment section of the company. Some Members expressed a preference to focus on what emerging market investments would be available through the London CIV.  Officers stated that London CIV options acquired a higher cost than Wells Fargo and did not offer a guarantee of non-exposure to tobacco investments.

 

At 10.53am Councillor Hall left the meeting.

 

The Chair expressed the view that whilst there was strong guidance from the Committee to treat Wells Fargo with caution, this did not preclude closing the option down completely and all options should be considered with due scrutiny.

 

The Aon Hewitt advisor noted that emerging markets were performing strongly and it would be prudent to consider the options available in this area. Some London authorities had appointed managers in this area.

 

The Committee NOTED the contents of the report.

9/17

Progress Report for Quarter Ended 30 September 2017 pdf icon PDF 195 KB

Minutes:

The Head of Pensions and Treasury introduced the report and noted that the Fund was still overweight in equities due to their strong performance but steady progress was being made towards fulfilling the asset allocation strategy.

 

The Committee NOTED the contents of the report.

10/17

Exclusion of the Press and Public

The following motion is to be moved and seconded where it is proposed to exclude the press and public from the remainder of a meeting:

 

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”

 

Minutes:

The following motion was moved by Councillor Pelling and seconded by Councillor Henson to exclude the press and public:

 

“That, under Section 100A(4) of the Local Government Act, 1972, the press and public be excluded from the meeting for the following items of business on the grounds that it involves the likely disclosure of exempt information falling within those paragraphs indicated in Part 1 of Schedule 12A of the Local Government Act 1972, as amended.”

 

The motion was put and it was agreed by the Committee to exclude the press and public for the remainder of the meeting.

 

11/17

Part B Minutes of the Previous Meeting

To approve the Part B minutes of the meeting held on Tuesday 19 September 2017 as an accurate record.

 

Minutes:

The Head of Pensions and Treasury introduced the report and noted that the Fund was still overweight in equities due to their strong performance but steady progress was being made towards fulfilling the asset allocation strategy.

 

The Committee NOTED the contents of the report.

12/17

Part B Progress Report for Quarter Ended 30 September 2017

Minutes:

The Aon Hewitt representative introduced the report and noted the continued strong performance of equities in the Fund. There were opportunities in the London CIV for investment in bonds and this would be looked into.

Questions were asked by the Committee on the Fund’s underweight situation in bonds and were informed that fixed-interest options were being considered. Officers provided the Committee with an update on the global market situation and the strong growth in European markets was noted. Officers also advised that there would be opportunities for Members to meet representatives from most of the Fund’s managers in the forward plan.

 

 

The Committee NOTED the report.