Venue: Cyfarfod Rhithiol / Virtual Meeting. View directions
Contact: Lowri Haf Evans 01286 679878
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APOLOGIES To receive
any apologies for absence Minutes: None to note |
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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: Following the issuing of a consultation by the Treasury, it was reported that the MHCLG had issued a consultation on the proposed amendments to the Local Government Pension Scheme in response to the judgement in the McCloud case. It was reported that the Head of Finance, the Pensions Manager and the Investment Manager would draw up a draft response in consultation with the Chairs of the Pensions Committee and Pension Board (closing date 11th October 2020). It was added that the Pensions Manager was working alongside Hymans to ascertain the number of records that would need to be amended. Although no timetable had been released, it was noted that this task involved significant additional administrative work and would be undertaken after the consultation had been completed and the order received. |
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The Chairman shall propose that the minutes of the meeting of this committee held on 18th March 2020 to be signed as a true record Minutes: The Chair accepted the minutes of the meeting held on 18th March 2020, as a true record. |
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GWYNEDD PENSION FUND'S DRAFT STATEMENT OF ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2020 PDF 197 KB To consider the
Head of Finance’s Report Additional documents: Decision: The information was accepted. Minutes: Submitted – a report by the Head of Finance providing
details of the Pension Fund's financial activities for the year ending 31st
March 2020. It was highlighted that the (draft) accounts were currently subject
to audit which was being undertaken by Deloitte. Following a decision by Audit Wales that
accounts would remain open to public inspection until the beginning of
September, the final accounts would be presented to
the Audit and Governance Committee on 14th September 2020. It was reported that the value of
the Fund on 31st March was down £143m, this was due to the implications of the
Covid-19 pandemic. It was noted that a significant
fall in market value was reflected at the end of March, but the values had now
risen and remained stable. Reference was made to Notes 12, 13
and 14 where further information was included on investment costs in light of
Gwynedd Fund's involvement with the Wales Pension Partnership's arrangement of
pooling combined investments. In response to questions regarding the
costs of the Wales Pension Partnership (WPP) and Host Authority – note 13
(£70k), was there a saving in the fees reduction compared with the costs for
the Gwynedd Council Fund, and how could we ensure value for money, it was noted
that the situation was very difficult to test and that the important thing was
the returns as opposed to the amount of fees. It was
considered that our membership of the WPP provided economies of scale,
which had resulted in reduced fees, and there was greater resilience in being
part of a larger fund. It was noted that the sum for
2018/19 had been omitted in error. In response to a comment regarding a significant fall in
equity dividends (Note 15), it was reported that all
dividends were automatically reinvested into their relevant funds and not
distributed as investment income. The fund value and change in market value on
these funds would reflect both capital appreciation / depreciation plus reinvested investment income. RESOLVED to accept the information. |
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INVESTMENT STRATEGY STATEMENT PDF 7 KB To consider the
Investment Managers Report Additional documents: Decision: To adopt the Investment Strategy Statement. Minutes: Submitted for information, a report by the Investment
Manager. It was reported that the statement was
reviewed every three years following valuation and that it had been discussed
with the Investment Panel in May 2020. Attention was drawn specifically to the allocation of the Fund which reflected the transfer of global equity to the
Wales Pension Partnership (WPP) Multi Assets Credit fund - which now formed a
significant part of the Gwynedd Fund investments. Attention was drawn to a suggestion
made by the Pension Board Members (20/07/20) that the statement did not
highlight the risks / lessons learned of the impact of the Covid-19 pandemic
and recent events in China. The members had suggested at that meeting that a
sentence should be added to the Managers' paragraph
(page 57) to illustrate that the response had been positive. A sentence
constructed by Paul Potter (Hymans Robertson) was proposed,
to illustrate that the Managers had been proactive and positive during the
Covid-19 pandemic. Although accepting of the logic, it was
considered that this was the day-to-day work of any Manager and it was
often too late to make changes after an unexpected shock - the skill was to
predict any changes. In response, the Head of Finance noted that the statement
did not attempt to describe what the Assets Managers were already doing, and
that it was not intended to change their brief. He
added that Managers in general had responded to the change and that the Pension
Board faced challenges in promoting transparency. RESOLVED to adopt the Investment Strategy Statement. |
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WALES PENSION PARTNERSHIP UPDATE PDF 242 KB To consider the
Investment Managers Report Decision: The information was accepted. Minutes: Submitted – a report by the Investment Manager stating that
since its establishment in 2017, the Partnership had been going from strength
to strength with officers meeting often. During the Covid-19 pandemic, it was noted that officers had been meeting every fortnight via
Teams and that a full meeting had been scheduled for the 24th of July 2020. Attention was drawn to the Fund's performance, and despite
the pandemic it appeared that the market had recovered
very well. Reference was
made to Pzena's performance, who had
contributed to the under-performance of the Global Growth Fund up to 31st March
2020, but who was now responsible for the increase in the fund due to their
investment methods. Reference was made to the fixed income transfer
which had been due to take place at the end of April, however, it would
now be transferred at the end of July 2020.
With regard to Emerging Markets, it was noted
that work on these had been quiet over the pandemic but it would be a priority
area for the next six months, with an Investment Managers structure to be
determined for this new fund. With regard to Private Markets, it was reported that a group had been established to look at
potential options of pooling assets into this category. It was
added that Russell Investments were leading on analysing the options
available with the current portfolio, and the development and management of
Wales Pension Partnership funds. It was noted that
individual discussions were required with all Funds to seek a way forward with
'property'. Although satisfied with the
current portfolio, the officer highlighted that there were opportunities for
further investment with Global Equity property. With a possible allocation of
10% in property, it was noted that only 9% was being
used at present, with the suggestion to increase to the full 10%. During the
ensuing discussion, the following observations were noted: • Members anticipated that the
situation with property would worsen globally as a side-effect
of Covid-19, with reduced demand for business premises. Despite this, it was a
good reason to move ahead using the remaining funding, provided we were
cautious with ’selling’. • The Fund must act carefully – the
Covid-19 pandemic had impacted the whole World, therefore it was essential to
consider carefully the types of investments before transferring. In response to the members' observations, it was noted that the crisis had made it even more pressing to
act. It was added that 80% of the Gwynedd Fund had
already been transferred to the WPP Fund. There was no intention to rush to
make further investments, but opportunities were presenting themselves where
they could take advantage, for example, looking maybe at the possibility of
further investment in Wales's infrastructure. The information was accepted. |
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WALES PENSION PARTNERSHIP BUSINESS PLAN PDF 7 KB To consider the
Investment Managers Report Additional documents: Decision: To approve the Business Plan Minutes: Submitted – a report by the Investment Manager advising
members of the Wales Pension Partnership's wish for each individual Committee
within the Partnership to approve their Business Plan. It was
reported that the Business Plan contained details about the
Partnership's priorities and how it would deliver its objectives for
2020-2023. The Plan also contained
governance arrangements, policies and plans as well as information about their
marketing stance, financial budgets and a summary of the Partnership's
performance objectives and investments. It was noted that meetings were
being held every fortnight with Officers, Hymans and the Host Authority
(Carmarthenshire) in order to share updates, information and have input into
documents. It was added that a number of policies had
been formalised during the lock-down, and these were available on the
Partnership's website. The officer drew attention to the training plan which covered a number of topics with the aim for
Members to have the appropriate knowledge and understanding - these would be
beneficial sessions and would be flexible for the Members of the Committee and
the Pension Board. They were likely to be delivered
on-line. In response to a previous comment regarding the Wales
Pension Partnership's costs (£70k), it was highlighted
that the Host Authority was dealing with considerable / additional work and
that the budget seemed insufficient. The Investment Manager added that one
extra officer had been appointed and that the
Authority's existing officers were taking on additional responsibilities. The
Head of Finance added that the sum was reasonable. RESOLVED to approve the Business Plan |
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TREASURY MANAGEMENT 2019/20 PDF 252 KB To consider the
Investment Managers Report Decision: The information was accepted. Minutes: Submitted – a report by the Investment Manager noting that
an annual decision had been made to permit the surplus funds of the Pension
Fund to be pooled and co-invested with the Council's overall cash-flow.
The officer stated that the report compared actual performance against the
strategy for the 2019/20 financial year, and fulfilled the Council's legal
obligation under the Local Government Act 2003 to have regard to both the CIPFA
Code and the Welsh Government's Investment Guidance. It was reported that during the 2019/20 financial year, the
Council's borrowing activity had remained within the limits originally set, and
it had received £546,000 of interest on investments which
was above the budgeted level of £406,000. She added that there
had been no defaults by any banks with which the Council had invested money,
and all prudential indicators had been met. Although the reduced value of investments by year end at 31/03/20 highlighted the negative impact of the
Covid-19 pandemic, she stressed that medium-term investments were the focus,
therefore there was an opportunity to recover / reclaim the loss. RESOLVED to accept the information. |