Agenda and minutes
Venue: Committee Room 6, Guildhall, Swansea. View directions
Contact: Democratic Services: - 636923
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Election of Vice Chair for the 2019-2020 Municipal Year. Minutes: Resolved that Councillor P Downing be elected Vice Chair for the 2019-2020 Municipal Year. |
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Disclosures of Personal and Prejudicial Interests. Minutes: In accordance with the Code of Conduct adopted by the City
& County of Swansea, the following interests were
declared: Councillor J P Curtice - agenda as a whole – member of the
Local Government Pension Scheme - personal. Councillor P Downing - agenda as a whole - my brother is a
member of the Local Government Pension Scheme – personal. Councillor M B Lewis - agenda as a whole – member of the Local
Government Pension Scheme - personal. Councillor C E Lloyd – agenda as a whole – Both myself and my
father are members of the Local Government Pension Scheme - personal. Councillor P Rees - agenda as a whole – Daughter-In-Law is a
member of the Local Government Pension Scheme - personal. Councillor D G Sullivan - agenda as a whole – Daughter-In-Law is a member of the Local Government Pension Scheme and I am in receipt of a pension administered by the former Dyfed Council - personal. Councillor W G Thomas - agenda as a whole – member of the
Local Government Pension Scheme - personal. Officers: K Cobb – Agenda as a whole – Member of Local Government
Pension Scheme – personal. J Dong – Agenda as a whole – Member of Local Government
Pension Scheme – personal. J Parkhouse – Agenda as a whole – Member of Local Government
Pension Scheme – personal and Minute No. 6 – Draft Statement of Accounts 2018/19
– Clerk to Llanrhidian Higher Community Council – personal. S Williams – Agenda as a whole – Member of Local Government Pension Scheme – personal. |
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To approve & sign the Minutes of the previous meeting(s) as a correct record. Minutes: Resolved that the
Minutes of the Pension Fund Committee meeting held on 14 March 2019 be signed
and approved as a correct record. |
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Low Carbon Index Tracking Fund - Update. PDF 42 KB Additional documents: Minutes: The Interim Section 151 Officer presented a ‘for
information’ report which updated the Committee on the low carbon fund
transition component of the Environmental, Social, Governance (ESG) Policy. It was added that the Committee had taken a number of steps
to understand the impact of ESG issues on the Fund and these were outlined in
the report. It was outlined that as part of the Fund’s work, the
Committee commissioned MSCI to undertake an analysis of the portfolio’s carbon
exposure. MSCI had information on each
global stocks’ carbon related exposure and was able to compare the carbon
exposure of the Fund’s holdings with a range of reference benchmarks. The
results of the study indicated that the current portfolio was 9% underweight
carbon assets. The Committee agreed to
target a 50% underweight position by 2022 in its revised ESG Policy and the
most operationally efficient way to start to reach its target was via a low
carbon passive index. The Pension Fund
Committee previously approved the transition of its approximately £0.5bn
Blackrock market cap weighted index tracking equity assets into the Blackrock
Low Carbon Index tracking fund, which would go a considerable way in meeting
its commitment to reduce the fund’s carbon footprint by 50% by 2022. Transition of those assets commenced on the 3
July 2019 and would be completely transitioned by the end of the month. In addition, at the
Swansea Council meeting held on 27 June 2019, a notice of motion declaring a
climate emergency was approved. Within the notice of motion the ground breaking
work and commitment of the Pension Fund Committee to reduce its carbon
footprint was referenced. Appendix 1 of
the report provided the Environmental, Social, Governance Policy which had been
formulated as a result of the initial training, further information gathering,
receiving presentations from interest groups and subsequent Committee
discussion and decision-making. The Committee commented upon the positive progress made and the ambition to reduce 50% of the Fund’s carbon footprint by 2022, whilst still ensuring appropriate investment returns for the Fund’s members. |
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Wales Pension Partnership (WPP) Draft Responsible Investment Policy. PDF 98 KB Additional documents: Minutes: The Interim Deputy Section 151 Officer presented a report which sought approval of the Responsible Investment
Policy (RI) of the Wales Pension Partnership (WPP). It is recognised as
best practice that WPP had a clearly defined RI Policy which
could be implemented across its funds. It
had been noted that each member fund of WPP were at different stages of their
consideration of the whole ESG/RI agenda. The WPP Policy was therefore
formulated with a view to not tying an individual fund to a restrictive
or binding commitment. Appendix 1 contained
the RI Policy of the WPP. Resolved that the WPP RI Policy is approved. |
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2019 Audit Plan – City and County of Swansea Pension Fund. PDF 298 KB Minutes: The Interim Deputy Section 151 Officer presented the Wales
Audit Office (WAO) 2019 Audit Plan which provided the
proposed audit work, when it would be undertaken, how much it would cost and
who would undertake it. Appendix 1 sets out the responsibilities of the Auditor,
along with those of management and those charged with governance. Exhibit 1 provided the three phases of the
audit approach, Exhibit 2 outlined the risks
considered significant which required special audit consideration. The proposed audit fee for this work was set
out in Exhibit 3 and the timetable of the proposed audits was
provided at Exhibit 5. Audit fieldwork was ongoing and a the ISA 260
outlining audit findings/recommendations would be brought to Committee in September
2019 Resolved that the
contents of the report be noted. |
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Draft Statement of Accounts 2018/19. PDF 99 KB Additional documents: Minutes: The Interim Deputy Section 151 Officer presented a report which sought approval of the draft statement of
accounts for the City & County of Swansea Pension Fund 2018/19. It was added that the
Wales Audit Office (WAO)had commenced their audit of
the Pension Fund Draft Statement of Accounts 2018/19 in line with their audit
plan presented to Pension Fund Committee earlier in the year. Their report will be
presented to the Committee in September 2019. The Draft Statement of Accounts
2018/19 were provided at Appendix 1. The Committee discussed the following: - ·
Additional membership due to auto enrolment; ·
Positive performance of the Fund; ·
Reduction of equity allocation; ·
Impact of the Mc Cloud judgement. Resolved that the City & County of Swansea Pension Fund Draft Statement of Accounts 2018/19, which are subject to audit, be approved. |
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Admission Body Application - The Wallich. PDF 118 KB Minutes: The Interim Deputy Section 151 Officer presented a report which sought to approve the admission body
application for The Wallich. It was outlined that following a service review exercise by
Neath Port Talbot County Borough Council (NPT CBC) undertaken previously, Tai
Tarian (previously called Neath Port
Talbot Homes) were appointed to manage housing services on behalf of NPTCBC. An element of that service supported those
affected by homelessness had subsequently been re-tendered and The Wallich had
been appointed for a 3 year term. The Wallich, a genuine not for profit organisation with HMRC approved exempt charity status, had been providing accommodation and support
services for homeless people since 1978. The contract for services commenced on the 1st July
2017 to run for 3 years. Under the contract conditions, the current
eligible workforce be transferred under TUPE
arrangements from the current employer, Tai Tarian to The Wallich. In order to preserve the pension rights of
the transferred staff, it was proposed that The
Wallich be granted Admitted Body status to the City & County of Swansea
Pension Fund. It was
proposed that the admission agreement be granted on a closed scheme
basis, to include only the named staff in schedule 1 of the admission
agreement. The admission agreement requires the requisite indemnity
bond or sponsoring employer guarantee be secured from
the sponsoring employer, Neath Port Talbot County Borough Council. The Administering Authority shall also
undertake the appropriate risk assessment of the admitted body, The Wallich. The Committee discussed the details of the application. Resolved that: - 1)
The Admission Body Application of The Wallich,
subject to completion of a satisfactory Admission Agreement (which recognises
the start date of the contract), be approved; 2) The
Deputy Chief Finance Officer be given delegated
authority to finalise the Admission Agreement with appointed legal advisors, as
outlined in the report. |
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Minutes: The Interim Deputy Section 151 Officer presented a ‘for
information’ report which presented any breaches which
had occurred in the period in accordance with the Reporting Breaches Policy. Appendix A provided the details of breaches that occurred
since the previous Pension Fund Committee in March 2019, including a new
requirement in respect of frozen refunds.
The details of the breaches and the actions taken by Management were highlighted. |
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Minutes: The Interim Deputy Section 151 Officer presented a report to determine an annual training programme for Trustees and Officers of the Pension Fund. Paragraph 3.7 of the report provided the training completed in 2018/19 and outlined the proposed training for 2019/20 as follows: - 1.
WPP Investment Beliefs Workshop; 2. WPP ESG
Beliefs Workshop; 3. Local
Government Employers (LGE) Trustee Fundamentals day
1, 2 & 3; 4. LGC Investment Summit; 5. Communications
training; 6. LAPFF AGM; 7. CIPFA
trustee training. Paragraph 3.8 outlined that
the determination of the training requirements for officers be
delegated to the Deputy Section 151 Officer. Noted – Councillor M B Lewis
stated that he would only attend local training events. Resolved that: - 1)
The
outline training plan in 3.7 and 3.8 be approved; 2)
Further opportunities identified during the year be delegated to the Interim Deputy Section 151 Officer
for approval. |
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MHCLG Consultations on Exit Payment Cap and Valuation Cycle / Employer Risk. PDF 48 KB Additional documents:
Minutes: The Interim Deputy Section 151 Officer presented a report which sought retrospective approval of the response
to H M Treasury (HMT) and The Ministry of Housing Communities and Local
Government (MHCLG) Consultation on the Cap on Exit Payments and Valuation Cycle
and Reform. It was outlined
that the Government proposed to cap exit payments in the public sector to an
absolute limit of £95k and sought consultation on the regulations to
implement. The draft statutory
instrument and consultation response was provided at
Appendix 1. The Government’s
definition of an exit payment included any additional pension contributions
required to enable the unreduced early access to a member’s benefits when they
were subject to early retirement when made redundant at aged 55 or over. To clarify, the exit payment would include
redundancy (member received cash payment) and any additional pension contributions
(the pension fund receives the payment). The arbitrary limit of £95k would
encompass very modestly paid public sector workers who have long service and a
number of variables along the way as highlighted within the proposed response. The remainder of
the response identified technical issues relating to how the 2
components of the exit payment cap needed to be assessed and dealt with, plus
some of the weaknesses of the proposal. the response
was approved by the Chair of the Pension Fund Committee on the 2 July 2019. In addition, the MHCLG
issued consultation on proposals to vary the current 3 year valuation cycle,
proposals regarding exit payments and protecting rights of membership of
employees of certain employers. The
fund’s appointed actuary had provided the response to the consultation
which was provided at Appendix 2. Resolved that: - 1) The
Pension Fund Committee retrospectively approves the consultation response of
the Administering Authority in respect of the cap on exit payments. 2) The Pension Fund Committee approves the consultation response of the fund’s appointed actuary in respect of the Valuation Cycle and Reform. |
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Exclusion of the Public. PDF 112 KB Minutes: The Committee was requested to exclude the public from the meeting during consideration of the item(s) of business identified in the recommendation(s) to the report on the grounds that it / they involved the likely disclosure of exempt information as set out in the exclusion paragraph of Schedule 12A of the Local Government Act 1972, as amended by the Local Government (Access to Information) (Variation) (Wales) Order 2007 relevant to the item(s) of business set out in the report. The Committee considered the Public Interest Test in deciding whether to exclude the public from the meeting for the items of business where the Public Interest Test was relevant as set out in the report. Resolved that the public be excluded for the following items of business. (Closed Session) |
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Fund Manager's Presentation(s): a) Russell Investments. Minutes: A presentation was made by Aidan Quinn, Sasha Mandich, Yacine Zerizef and William Pearce of Russell Investments.
Questions in relation to the content of the presentation were asked by the Committee and responses were provided accordingly.
The content of the presentation was noted and the Chair thanked the Fund Managers for attending the meeting. |
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WPP - Update. Minutes: The Interim Deputy Section 151 Officer presented a ‘for information’ report which updated the Committee on the progress of the Wales Pension Partnership asset pooling. Appendix 1 provided
the progress and update report provided by the ACS Operator Link Asset
Services. Referenced within
the update was the projected approval of the tranche 3 fixed
income fund by the FCA in Q4 2019. |
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Residential Housing as an Asset Class. Minutes: The Interim Deputy Section 151 Officer presented a report which sought to approve Residential Housing as an investment asset class. It was outlined that the Pension Fund currently invested in a wide
range of asset classes, including equities, bonds, property, infrastructure,
private equity, hedge funds and private debt.
However, It did not have an allocation to
residential housing. It was
added that the Pension Fund Committee received a day’s training on the asset
class in February 2019, which included presentations from managers specialising
in the market rented sector, social housing, affordable housing and
homelessness support housing as investable asset classes. Appendix
1 provided a summary of the attributes and benefits of adopting residential
housing as an asset class. The
Committee discussed structuring the procurement exercise to target certain
types of residential housing, the possibility localising matters to benefit the
local economy. The
Deputy Section 151 Officer stated that he would seek further advice from the
Fund’s Investment Consultant / Independent Advisor. Resolved that Residential Housing is adopted as an investment asset class. |
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Report of the Investment Consultant. Minutes: Nick Jellema, Investment Consultant provided a ‘for
information’ report, which presented the asset valuation and investment
performance for the quarter, year and 3 years ended 30 June 2019. Attached at Appendix 1 were the quarterly investment summaries for the Pension Fund for the quarter, year and 3 years ended 30 June 2019. |
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Report(s) of the Independent Advisor. Minutes: The “for information” report presented the economic update
and market commentary from the perspective of Mr Noel Mills, Appointed
Independent Investment Advisor. The quarterly report ending 30 June 2019 was
attached at Appendix 1. The content of the report was noted by the Committee and various questions were asked, which were responded to accordingly. The Appointed Independent Investment Advisor was thanked for his report. |
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Investment Summary. Minutes: The Interim Deputy Section 151 Officer provided a “For
Information” report, which presented the investment performance for the
quarter, year and 3 years ended 30 September 2018. The quarterly investment summaries for the Pension Fund for the quarter, year and 3 years ended 30 September were attached at Appendix 1. Resolved that the report be noted. |