Agenda item

To ask the Pensions Committee to consider and decide whether to agree to the fixed income options for Gwynedd Pension Fund in the Wales Pool

Appendix A separate for Committee Members only

The document is exempt under Paragraph 14 of Schedule 12A of the Local Government Act 1972. Information relating to the financial or business affairs of any particular person (including the authority holding that information).

There is acknowledged public interest in openness in relation to the use of public resources and related financial issues. It is also acknowledged that there are occasions, in order to protect the financial interests of the public authorities that matters related to commercial information need to be discussed without being publicised. The appendix deals with investment arrangements which are commercially sensitive and confidential to the company. Publication of such commercially sensitive information could undermine confidence of providers to engage with Council and therefore the Councils ability to invest effectively. This would be contrary to the wider public interest of securing value for money and the best overall outcome. For those reason, the matter is exempt from public interest.

Submitted - a report requesting the Committee to consider sub-funds for 'fixed income' assets as options for the Gwynedd Pension Fund to invest via the Wales Pensions Partnership.   As a contingency measure it was explained that the Gwynedd Pension Fund had access to passive 'fixed income' assets via the passive investments agreement.

It was noted in a meeting of the Investments Panel on 15/11/2018, that information and guidance had been presented to members of the Pensions Committee regarding the Wales Pensions Partnership sub-funds for 'fixed income' assets and the possible options were discussed. It was suggested that it would be an opportunity to transfer assets to the Partnership's active portfolios at the beginning of Summer 2019.

With a possible option of distributing the assets between four types of fixed income sub-funds, the conclusion of the Investment Panel was that the Absolute Returns Fund and the Multi Asset Credit Fund was of interest to Gwynedd at the time of launching the Wales Pensions Partnership sub-funds.

A summary of the possible options was submitted as an exempt appendix to the report and therefore, in order for the Members to discuss them in detail, it was resolved,   TO EXCLUDE THE PRESS AND PUBLIC as there was an acknowledged public interest in openness in relation to the use of public resources and related financial issues.    However, it is also acknowledged that there are occasions, in order to protect the financial interests of public authorities, when matters related to commercial information need to be discussed without being publicised. The appendix related to investment arrangements that are commercially sensitive and confidential for the company in question. Publishing commercially sensitive information of this type could undermine the provider's confidence in submitting prices to the Council and, therefore, the Council's ability to invest successfully. This would be contrary to the wider public interest of securing value for money and the best overall outcome.

          Observations arising from the discussion;

·         Committee Members appreciated the views of the officers and the experts from Hymans and Russell in this field, and wanted to follow the suggestion presented.

·         Committee members valued the opportunity to work with new managers, together with the possibility of retaining assets with one of the current managers of the Gwynedd Fund.

·         Although there was no intention for the Gwynedd Fund to transfer assets to the Worldwide Credit Fund, the Chair was asked to highlight the principles of relative responsible investment at the next meeting of the Wales Pensions Partnership Joint Committee. 

          RESOLVED -

a)    In accordance with the proposal, to generally reinvest the current fixed income assets of the Gwynedd Fund in the sub-fund of the Absolute Returns Fund of the Wales Pensions Partnership and to reinvest the equity assets set aside for now in order to reduce the risk in the sub-fund of the Multi Asset Credit Sub-fund of the Wales Pensions Parntership.     

b)    Since all the investment managers of the Wales Pensions Partnership had not yet been finally confirmed, to delegate the power to the Head of Finance Department, in consultation with the Chair of the Committee, to determine the final allocations between the sub-funds, following the opinion and further guidance from experts, as required.

          The press and public were invited back into the meeting.