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No. | Item |
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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: No declarations of personal interest were received from any members
present. |
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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
15.2.18 be signed as a true record. Minutes: The Chair signed the minutes of the meeting of this committee, held on 15
February 2017, as a true record. Indemnity Insurance It was highlighted
that the matter had been discussed again at the CIPFA Seminar, but that no definitive
answers had been forthcoming. It was
suggested that enquiries should be made with Zurich (who had responsibility for
this matter) once again, and press on the speakers at the CIPFA Seminar to
prepare a statement that would provide clarity on the concerns, and justify
what they had been reporting at seminars. |
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MINUTES OF PENSIONS COMMITTEE To submit, for information, minutes of the Pensions Committee meeting held on the 15 3 2018 Minutes: The Chair signed the minutes of the meeting of this committee, held on 15
February 2017, as a true record. |
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TREASURY MANAGEMENT STRATEGY STATEMENT AND ANNUAL INVESTMENT STRATEGY FOR 2018/19 To consider the report of the Investment Manager Additional documents:
Minutes: Submitted - the report of the Investment Manager explaining the treasury
management arrangements for investing the residual cash-flow of the Pension
Fund. . It was noted that the Pensions
Committee had adopted Gwynedd Council's Treasury Management Strategy Statement
(TMSS) on 15 March, following the full Council's decision to adopt the
statement on 8 March. It was highlighted
that no fundamental changes had been made to the historical procedure. It was reiterated
that the TMSS was relevant to the residual cash-flow of the Pension Fund, which
was combined with the Council's money for cash-flow management purposes. Daily interest was received and this was
clearly recorded and distributed appropriately. It was reported that the Pensions Committee
reviewed this arrangement annually and the recommendation to continue with the
arrangement for 2018/19 was approved. In response to a question, it was highlighted that cash balances were
pooled for investment purposes only, as economies of scale meant that the
returns received were better and the administrative cost was shared and therefore
less. It was emphasised that there was
no link here with the pooling of Welsh Funds.
The observation that the terminology was similar, and the fact that the
information could be misinterpreted if the entire document was not read, was
accepted. In response to a question, it was confirmed that Arlingclose
had been appointed as Treasury Management consultants. It was noted that the Authority had had a
good relationship with Arlingclose since 2008, that
they provided clear guidance and that the Audit and Governance Committee had
recently expressed its gratitude to them for presenting training in a clear and
effective way. Attention was drawn to the need to correct the reference to the
"Housing and Communities Agency" under "5.11 - Registered Providers",
as Welsh Government undertook the equivalent regulatory role in Wales. Resolved
to accept the information. |
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PENSION FUND INVESTMENT PERFORMANCE 2017/18 To consider the report of the Investment Manager Minutes: Submitted - the
report of the Investment Manager highlighting how the performance of the
pension fund's investments was monitored on a quarterly basis. It was explained that the investment
performance of the individual investment manager companies was being monitored
by the Pensions Committee, which met as an Investment Panel every quarter. It was highlighted that exceeding the
benchmark over time was the custom, rather than comparing each individual
quarter. In response to a
question regarding the ability to identify poorly performing investment manager
companies, it was explained that the main task of the Pensions Committee,
except for allocating assets, was make decisions on suitable investment manager
companies, and at investment meetings, they would receive detailed reports on
the individual companies. Should an
investment manager perform badly on a regular basis, the matter would be
discussed thoroughly. The Chair of the
Pensions Committee reiterated that detailed, but commercially sensitive
reports, were being provided for the Investment Panel and that there was an
opportunity for Committee members to measure and challenge decisions and
performance. To ensure
arrangements for good compliance, it was agreed that officers would report to
the Board should an investment manager company perform badly on a regular
basis. A suggestion was
made that Board members should observe one meeting with the Investment Panel to
ensure that the process was comprehensible, accurate and that it worked
effectively. It was emphasised that
this was a request to seek an understanding of the process and not a suggestion
to challenge performance. In response to the
suggestion, it was noted, due to being on the verge of joint-investing as the
Welsh Pension Partnership, the procedure was likely to change in the coming six
months and it was agreed that it would be logical to identify what the reporting
procedure would be in future before implementing the suggestion. In response to a
question from Unison, ‘Can your Pensions
Committee provide details of the asset managers they use, that have been unable
to register with the LGPS Code of Transparency?', it was highlighted that
the Consultative Board had a template code of transparency prepared for equity
investments, but not for investments in other asset classes, such as
property. It was highlighted that
companies such as BlackRock, Fidelity and Veritas had signed up in the context
of equity mandates, but property investment manager companies were still
waiting for a suitable template from the Consultative Board. In response to
another question from Unison, ‘What
measures have been taken by the Pensions Committee to increase the transparency
of their investment costs, in particular measures taken to measure implicit
costs – and I quote the West Midlands
example’', the Head of Finance Department noted that they had already made
enquiries with the West Midlands about implicit cost matters. It was expressed that officers were not of
the opinion that Gwynedd Pension Fund had implicit costs, and that all of
Gwynedd's fees were reported in full. In an observation made that the turnover rate of Investment Managers appeared ... view the full minutes text for item 7. |
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BOARD REPORT FOR THE PENSION FUND ANNUAL REPORT 2017/18 To consider the report of the Investment Manager Additional documents: Minutes: Members were reminded that the Pension Fund's
Annual Report included a report from the Chair of the Pension Board. The Board was asked to consider the content
of the 2017/18 report and make observations.
It was highlighted that the 2016/17 report had been included as an
example. It was suggested
that a more dynamic document that addressed those elements where the Board had
made a contribution, e.g. moral investments and communication, was needed. It was highlighted that the Board had completed
two questionnaires and it was possible that fields that required more attention
had been highlighted in the questionnaires.
It was expressed that what had been achieved and the future
vision/focus, needed to be highlighted. It
was suggested that the Board's contribution in scrutinising the Committee's
work in the context of the Welsh Pensions Partnership; a meeting with Link and
Russell; and its guidance to work on responsible investment, were worth noting
in the report. It was noted that the report would
need to be completed by September 2018 and officers were asked to prepare the
first draft on the Chairman's behalf. |
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RESPONSIBLE INVESTMENT AND GOVERNANCE To consider the report of the Head of Finance Additional documents: 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
Pensions Committee on 15.3.18 to approve the principles. Board members were
asked to consider the principles so that they could be included in the
Investment Strategy Statement. It was
highlighted that paragraph 2.2 was additional to what Hymans had offered. Principle
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.' The
officers were thanked for the information, for arranging the seminar and
arranging for Hymans to present and collaborate with the members of the
Pensions Committee and Pension Board collectively. It was
reiterated that the process was professional and transparent. One
member highlighted concern that the Pensions Committee had added the above
principle. It was noted that moral investment
was now a hot topic and tended to be a political issue. He expressed that the Board's task was
ensuring that political considerations did not become a part of the Pension
Fund's investment discussions. It was
accepted that the main priority was getting the best returns, however, he
expressed that the views of all contributing fund employers had to be
considered, in accordance with the statutory guidance of the Department for
Communities and Local Government (DCLG), which notes that administrative Authorities
should: ‘… explain the extent to which the views of local pension
boards and other interested parties who they consider may have an interest will
be taken into account when making an investment decision based on non-financial
factors…’ One member suggested
that this amendment should be highlighted and for all employers to be informed
should there be an intention to invest in Welsh initiatives, and that employers
should be consulted in that respect. In response to the
observation, it was noted that Hymans could see the advantages of the addition
and it was noted that the Fund's members would be asked for their views
regarding the addition of 'Principle 2.2'.
It was reiterated that feedback had been obtained noting that there was
a local desire to see local investment. It was emphasised that the Committee's
trustee duties would have to be met, along with adding value beyond good
returns before any investment was made. Another member expressed that she agreed with all the principles and encouraged the Partnership's other funds to make a similar comment. She highlighted that the success of the Partnership's bid was Wales as one package. It was reiterated that these were only statements and that further discussions would be needed and robust processes put ... view the full minutes text for item 9. |
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RISK REGISTER UPDATE To consider the report of the Investment Manager and Senior Communication Officer Additional documents: Minutes: The Pension Fund's
risk register for 2018 was submitted. It
was highlighted that the register was an active document and that it was
reviewed regularly. The following observations and
additions were suggested: ·
including 'cyber safety'
– it was suggested that the Council's general risk register should be used ·
add the word 'Committee'
to the risk of conflict of interests (page 50) ·
Wales Investment Pool
(page 57) - need to review the wording of the risk as a result of recent
developments. It was agreed that the
score would be reported upon at the next meeting. ·
A suggestion to set a date and document version
management ·
A suggestion of
introducing a penalty system as a mitigation measure in order to ensure timely
data It was expressed that the register was a very useful document and that
detailed and good work had been done to score the risks. |
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COMMUNICATING WITH EMPLOYERS - CORRECT AND TIMELY DATA To consider the report of the Senior Communication Officer Minutes: A report was
submitted by the Senior Communication Officer, outlining the process of
completing and submitting the 'End of Year' spreadsheet that included basic
information about employees, contributions paid, the member's pensionable
salary for benefits pre-2014, and the member's actual salary for the 2017/18
tax year. To comply with relevant
regulations, every employer within the Fund had to submit comprehensive and
accurate data, in relation to every one of their pensionable employees by
30.4.18. Reference was made
to the work of the Pensions Regulator, and to the expectation that the employer
sent details every month, rather than annually.
It was reiterated that presenting up-to-date monthly data would allow
for any problems to be resolved immediately, rather than waiting until the end
of the year. Reference was made
to the i-connect system and the work being done
to encourage, advise and support employers to install and use the system. It was noted that the system reduced the cost
and the risk associated with pension data processing as the information was
taken directly from the payroll. In response to an
observation regarding receiving late and incomplete data, the need to identify
steps that highlighted the problem was needed, along with having arrangements
in place to ensure that performance was improved. It was suggested that there was a need to
consider escalating any difficulties by communicating with senior officers
should the matter remain unresolved, reiterating that any delay came at a cost
to the Fund. It was reiterated, in the
case of Anglesey Council, that there was a need to ensure that they complied
with the above requirements, as a lack of compliance had an impact on other
Fund members. In response to the
observations, it was highlighted that consideration had been given to seek
permission for the Chief Officer, on behalf of the employer, to sign a letter
confirming that the data was accurate.
It was added that the Regulator had the right to punish should data be
incorrect and late. Should Gwynedd
report to the Regulator and the employer was penalised, consideration would
need to be given to the Fund's reputation, and the political issues that could
arise. Gratitude
was expressed for the information. |
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CIPFA SEMINAR FEEDBACK To consider the report of the Senior Communication Officer Additional documents: Minutes: A report was
received from the Senior Communication Officer, providing a summary of the
items discussed at the Seminar held on 26.2.18.
He added that CIPFA recommended including "GMP" as a standing
item for Pension Boards, however, the Gwynedd Fund was in a much better
position than other funds in the context of "GMP". Gratitude was
expressed for the comprehensive information. It was highlighted
that the CIPFA Pension Board Conference was to be held in London on
27.6.18. A request was made for Members
to contact the Chairman of the Board if there was a desire to attend on behalf
of the Gwynedd Fund. |