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Contact: Lowri Haf Evans 01286 679878
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APOLOGIES To receive
any apologies for absence Minutes: Present: Councillors: Stephen Churchman (Chair),
David Cowans (Conwy Borough Council), John Griffith
(Isle of Anglesey County Council), Peredur Jenkins, John Brynmor Hughes, Aled
Wyn Jones, John Pughe Roberts and Hywel Eifion Jones (Pensions Board - Observing) Officers: Dafydd Edwards (Head of
Finance Department), Caroline Roberts (Investment Manager) and Lowri Haf Evans (Member Support Officer) |
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DECLARATION OF PERSONAL INTEREST To receive
any declaration of personal interest Minutes: None to note |
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URGENT ITEMS To note any
items which are urgent business in the opinion of the Chairman so that they may
be considered Minutes: None to note |
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The Chairman shall propose that the minutes of the meeting of this committee held on 18.1.18 to be signed as a true record Minutes: The Chair signed the minutes of the meeting of this committee, held on 18
January 2018, as a true record. |
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TREASURY MANAGEMENT STRATEGY STATEMENT AND ANNUAL INVESTMENT STRATEGY FOR 2018/1 PDF 277 KB To consider the report of the Head of Finance Additional documents: Minutes: In accordance with Welsh Government's Statutory
Guidance on Local Government Investments, the Council was required to prepare an
Annual Investment Strategy as part of its treasury management role. As good
practice, it was considered that the Gwynedd Pension Fund (the
"Fund"), should adopt Gwynedd Council's Treasury Management Strategy
Statement (TMSS) for 2018/19, as revised for the purpose of the Pensions Fund.
Gwynedd Council's TMSS for 2018/19 was approved by the full Council on 8 March
2018. In addition, the Pensions Committee was asked to
request that the Council allow the surplus cash balances of the Pensions Fund
to be pooled with the Authority's general cash flow from 1 April onwards. It
was explained that pooling the cash flow achieved better rates of interest and
reduced banking costs. It was highlighted that these funds were being
invested with counterparties in accordance with the TMSS in order to maximise
returns. Attention was drawn to the following main aims, highlighting that the CIPFA Code and WG Guidance required that the Authority invest its
funds prudently, giving consideration to the safety and liquidity of its
investments before attempting the highest rates of return, or the highest
yield. It was noted that interest rates were currently
very low; thus, other creative methods of investment were being considered. It
was also confirmed that the priority was to safeguard the Fund and protect the
money, rather than take risks. It was proposed and seconded to accept the
recommendations. One member suggested the need for a statement from
the Monitoring Officer at the beginning of the report stating that the arrangement
was legally correct along with an explanation of the way the process was
managed. RESOLVED To approve the Treasury Management Strategy Statement and the Annual
Investment Strategy for 2018/19, as adapted for the purpose of the Pensions
Fund. - To request that the Council allow the Pension Fund's reserves to continue
to be pooled with the Council's general cash flow from 1 April 2018
onwards. |
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RESPONSIBLE INVESTMENT BELIEFS PDF 101 KB To consider the report of the Head of Finance Minutes: Following a training session held jointly with Board members on 18.1.2018, it was reported that Paul Potter from Hymans had prepared a report that outlined the agreed investment principles of Gwynedd members and officers based on responses to the questionnaire completed for the session. It was noted that this report, 'Agree Responsible Investment Principles' had been discussed at the Investment panel held on 28 February, and the Panel's main considerations were presented to the Committee to approve the principles. The next step would be to present the listed principles to the Pensions Board (12.4.18) for scrutiny. If the Board agreed, it would be possible to incorporate the principles as an official part of the Fund's Investment Strategy Statement. In response to the report, it was highlighted that it was timely to accept the principles in the context of the Wales Pensions Partnership. Gwynedd would have a clear opinion about its investing principles. The principle of seeking to invest in sustainable assets was welcomed, including investing in the Wales area when 'non-financial gains' derived from it. It was reiterated that the Fund would consider investing in Welsh assets when the criteria permitted. Ensuring the best returns is the Fund's main priority. In response to an observation about the wording of principles 2.1 and 2.2, and the suggestion that statements contradicted each other, it was noted that it was necessary to consider the principles in their entire context, without breaking up sentences and focusing on individual words. The Head of Finance Department explained that the legal interpretation of "SAB" or "fiduciary duty" had been circulated to members of the Committee before the meeting of the Investment Panel. RESOLVED to adopt the fundamental principles about
responsible investing so that they can be included in the Fund's Investment
Strategy Statement. 2.1 In accordance with the Committee's fiduciary duty, financial considerations should carry more weight than non-financial considerations when making investment decisions, even though environmental, social, and governance
('ESG') matters can materially
affect risk and returns. Therefore,
'ESG' factors should be embedded in the investment processes and in the decision-making
processes of the managers appointed by the Fund. 2.2 The Fund's Committee
will seek to invest in sustainable
assets, including investing within the Wales area when non-financial
investments can derive from this, on
condition that they satisfy the requirements of the fiduciary duty. 2.3 The
Committee accepts that it has a duty
to be a responsible investor.
It is expected that consulting with companies, rather than avoiding investing, will be more effective in changing
corporate behaviour and reducing risk.
Wherever possible, collaborative action provides the
most successful route to influence outputs. 2.4 As a long-term investor,
the Fund is vulnerable to systemic risks such as climate change and the expectation of a transfer to a low carbon economy. Financial outcomes
can be improved through managing how open
to such risks the fund is. 2.5 Share-holder comprehension and ... view the full minutes text for item 6. |