Pension Sub-committee And Pension Board - 27/10/2014

At a MEETING of the PENSION INVESTMENT SUB-COMMITTEE OF THE POLICY AND RESOURCES COMMITTEE held at Dundee on 27th October, 2014.

APPENDIX I

Present:-

Bailie Willie SAWERS

COUNCILLORS

Bailie Willie SAWERS, Convener, in the Chair.

I DECLARATION OF INTEREST

No declarations of interest were made.

II TAYSIDE PENSION FUNDS RISK REGISTER

There was submitted Report No 385-2014 by the Director of Corporate Services updating the Risk Register for the Tayside Pension Funds.

The Sub-Committee approved the updated Risk Register for the Tayside Pension Fund and Tayside Transport Pension Fund.

III LGPS (SCOTLAND) NEW GOVERNANCE ARRANGEMENTS

There was submitted Report No 387-2014 by the Director of Corporate Services providing an overview of the new governance arrangements and documentation available which accompany the 2015 scheme and the steps required by each administering authority to form a local Pension Board by 1st April, 2015.

The Sub-Committee agreed to:-

(i) note the content of the report;

(ii) provide advice on employer representative membership of the Pension Board; and

(iii) agree that authority be delegated to the Chair to approve the Tayside Pension Fund response to the draft regulations in consultation with the members of the Sub‑Committee.

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

IV TAYSIDE PENSION FUNDS

(a) PERFORMANCE SUMMARIES

There was submitted Report No 384-2014 by the Director of Corporate Services relating to Performance Summaries for the quarter, twelve months, three years, five years and ten years to 30th June, 2014 reviewing the investment performance of the Main Fund's five Fund Managers (including Property) and the Financing Fund for the quarter to 30th June, 2014. It also considered the performance of the Transport Fund which invested with three of these managers.

The report compared investment performance of the Funds with the Funds' specific benchmarks which consisted of various stock and security market indices.

The Sub-Committee noted the information contained therein with regard to the performance of the Tayside Pension Fund and Tayside Transport Pension Fund and their Fund Managers.

(b) SUMMARIES OF INVESTMENTS AND TRANSACTIONS

There was submitted Report No 350-2014 by the Director of Corporate Services summarising investments and transactions during the period 1st April to 30th June 2014 reviewing the investment activities of the Main Fund's seven Fund Managers for the quarter to 30th June, 2014. The Transport Fund shared three of these Managers and their transactions were included.

The report summarised the transaction of each Fund Manager and showed the market values of the Main and Transport Fund.

The Sub-Committee noted the information contained therein with regard to the activities of the Tayside Pension Fund and Tayside Transport Pension Fund and their Fund Managers.

V TRIENNIAL ACTUARIAL VALUATION TO 31ST MARCH, 2014

A position update was given to members by the Fund Actuary.

The Sub-Committee noted the findings of the Fund Actuary.

VI INVESTMENT IN TOBACCO - EMPLOYER CONSULTATION OUTCOME

There was submitted Report No 386-2014 by the Director of Corporate Services reviewing the outcome of employer consultation in relation to Tayside Pension Fund's investment policy regarding direct investments in the tobacco industry.

The Sub-Committee agreed that:-

(i) the Tayside Pension Fund recognised that investing in tobacco companies was in direct conflict with the policies of the Scottish Government on the prevention of cancer and the promotion of good health and long-life and agreed to stop investing in tobacco companies, subject to the process described in part (ii) of this motion below; and

(ii) the Tayside Pension Fund, through each of its Fund Managers, would keep the issue of alternative investments to tobacco under constant review and that, as soon as a Fund Manager identified other investments which would provide satisfactory returns without materially affecting the volatility of risk and return or impacting on current investment benchmarks, the Fund Managers would reduce the Fund's investment in tobacco, the Fund's finding aim being to disinvest from tobacco stocks, where investment circumstances permit.

VII PRESENTATION

Tom Wright and Fiona McLeod of Baillie Gifford gave a short presentation.

A summary of the performance of the Portfolio was given noting the key performance drivers and comparison of this to benchmark figures. It was noted that the Portfolio was continuing to out-perform its benchmark.

The Chair thanked the speakers for their presentation.

Willie SAWERS, Convener.

APPENDIX II