Pension Sub-committee And Pension Board - 05/03/2003

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE of the FINANCE COMMITTEE held at Dundee onWednesday, 5th March 2003.

Present:-

Councillors

George Regan

Julie Sturrock

Fiona Grant (substitute for Lord Provost Letford)

John Corrigan

Willie Sawers

In attendance:-

Mr. W. Gowans, Tayside Full-Time Trade Union Officers Group

Mr. R. McKelvie, TGWU

Councillor REGAN, Convener, in the Chair

The minute of meeting of this Sub-Committee of 20th November, 2002 was noted.

Unless marked thus * all items stand delegated.

I PROPOSED TIMETABLE OF MEETINGS FOR 2003/2004

There was submitted Report No 90-2003 by the Director of Finance suggesting a programme of meetings of the Superannuation Investment Sub-Committee to cover investment performance and issues arising in the financial year 2003/2004.

The Sub-Committee agreed to the following programme of meetings:-

*Depends on the outcome of the forthcoming interviews for global bond and equity managers.

In addition to the above, members were reminded that the next meeting has been arranged for 4th June, 2003. The membership of the Sub-Committee would be determined at the first Finance Committee meeting after the local Council elections on 1st May, 2003.

II STATEMENT OF INVESTMENT PRINCIPLES ANNUAL REVIEW

There was submitted Report No 91-2003 by the Director of Finance providing revised Statements of Investment Principles for the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund. These Statements were originally approved at a meeting of the Superannuation Investment Sub-Committee on 23rd February, 2000 (Report No 148-2000 refers) and require to be revised on an annual basis.

The Sub-Committee noted the information within the report and approved the revised Statements of Investment Principles for both the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

The Sub-Committee resolved under Section 50(A)(4) of the Local Government (Scotland) Act 1973 that the public and press be excluded from the meeting in order that the undernoted items of business may be considered in private on the grounds that they involved the likely disclosure of exempt information as defined in paragraphs 4, 6 and 11 of Part 1 of Schedule 7(A) of the Act.

III TAYSIDE SUPERANNUATION FUND

(a) WM PERFORMANCE SUMMARIES (BALANCED PORTFOLIOS)

There was submitted Report No 92-2003 by the Director of Finance reviewing the investment performance of the Main Fund's three Fund Managers for the quarter to 31st December, 2002 and the twelve month period to the same date. The report compared investment performances with various stock market indices.

The Sub-Committee noted that one of the three Fund Managers had matched the WM Index for the quarter to 31st December, 2002 whilst the other two had under performed the Index. One Fund Manager had outperformed the Index for the year to 31st December, one had matched the WM Index and one had under performed the Index. Whilst the returns for the 2002 quarter were positive, it was noted that negative returns applied for the year to 31st December, 2002.

(b) PERFORMANCE SUMMARY (PROPERTY PORTFOLIO)

There was submitted Report No 93-2003 by the Director of Finance relating to the Schroder Property Investment Management Limited performance for both the quarter in the year to 31st December, 2002.

The Sub-Committee noted information contained in the report with regard to the performance of the Property Portfolio managed by Schroder Property Investment Management Limited.

(c) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 94-2003 by the Director of Finance summarising investments and transactions during the period 1st October to 31st December, 2002.

The Sub-Committee noted the information contained in the report.

IV TAYSIDE TRANSPORT SUPERANNUATION FUND

(a) WM PERFORMANCE SUMMARIES

There was submitted Report No 95-2003 by the Director of Finance reviewing investment performance of the Transport Fund Manager for the quarter to 31st December, 2002 and the twelve month period to the same date. The report compared investment performances with various stock market indices.

The Sub-Committee noted that whilst the Transport Fund Manager had slightly under performed the WM Index for the quarter to 31st December, 2002 the annual return had outperformed the Index for the year to 31st December.

Positive returns had applied for the quarter but negative returns applied for the year to 31st December, 2002.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 96-2003 by the Director of Finance summarising Investments and Transactions during the period 1st October to 31st December 2002.

The Sub-Committee noted the information contained in the report.

V REVIEW OF INVESTMENT STRUCTURE OF TAYSIDE TRANSPORT SUPERANNUATION FUND

There was submitted Report No 223-2003 by the Director of Finance updating the Sub-Committee on the review of the Investment Structure of the Transport Fund conducted by Hymans Robertson whose appointment was approved by the Finance Committee on 10th January 2003. A copy of Hymans Robertson's report had been distributed separately.

After discussion, the Sub-Committee agreed to defer taking any decisions in respect of the report until 25th March, 2003 to allow for further discussions between the parties involved.

VI PRESENTATION

Mr. John Carson, Mr. Kenny Bell and Mr. Tom Wright, of Baillie Gifford, gave a presentation on the Baillie Gifford performance to 31st December, 2002, a review of world markets, the outlook for the stock market and corporate governance and SRI. Markets remained volatile and the immediate outlook was more of the same. Directors' Remuneration Report Regulations meant that shareholders were now able to vote on remuneration issues. Meetings had been held regularly in 2002 to discuss corporate governance and ethical issues and such meetings would continue in 2003.

The speakers answered questions and were thanked by the Convener.

VII MEMBERS TRAINING

The Director of Finance gave a short presentation on the procedures for the interviews of Managers for the global bond and equity mandates to be held on 25th March and 3rd April 2003.

GEORGE REGAN, Convener.

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