Pension Sub-committee And Pension Board - 24/05/2000

At a MEETING of the SUPERANNUATION INVESTMENT SUB-COMMITTEE of the FINANCE COMMITTEE held at Dundee on

Present:-

Councillors

George Regan

John Letford

John Corrigan

Willie Sawers

In attendance:-

Mr. Willie Gowans, Tayside Full-time Trade Union Officers' Group.

Councillor REGAN, Convener, in the Chair.

Unless marked thus * all items stand delegated.

The minute of meeting of this Sub-Committee of 23rd February, 2000 was noted.

I SEMINAR - THE 12TH LGC PUBLIC SECTOR PENSION FUND INVESTMENT SEMINAR, SOUTHAMPTON - 7/8TH SEPTEMBER, 2000

LGC Communications had arranged their 12th Public Sector Pension Fund Investment Seminar for 7/8th September 2000. The Sub-Committee's instructions were sought regarding attendance at this year's Seminar. The cost was 600 per delegate, excluding travel and subsistence.

The Sub-Committee agreed that an appropriate officer of the Finance Department be authorised to attend, subject to the approval of the Director of Finance.

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, 8, 9 and 11 of Part 1 of Schedule 7(a) of the Act.

II BEST VALUE REVIEW - SUPERANNUATION INVESTMENT SERVICES 1999/2000

There was submitted Report No. 231-2000 by the Chief Executive which had been approved by the Best Value Sub-Committee on 29th March, 2000. The Best Value Sub-Committee had agreed as follows:-

(a) to note the work undertaken by the Review Group;

(b) to note the recommendation for the review of the structure of the Tayside Superannuation Fund and remit to the Superannuation Investment Sub-Committee to consider the recommendation further; and

(c) to note the recommendations for continuous improvement set out in Section 14 of the report and remit to the Superannuation Investment Sub-Committee to consider the recommendations further.

The Director of Finance stated that performance was the critical factor to emerge from the questionnaires set out to members and Trade Union representatives and it had been remitted to the Sub-Committee to ascertain the optimum structure of the Fund. The below average performance of one Fund Manager was resulting in an overall below average performance. Proposals for the review of the Fund are detailed under Article IV of this minute.

The Best Value Review had identified the following areas for improvement:-

(a) training for Elected Members;

(b) the preparation of a reference guide for Elected Members; and

It was explained that at present there are separate custodians for each Fund Manager. It was proposed to have one custodian for all Fund Managers. Article IV of this minute also refers.

The Sub-Committee noted the Best Value Report and agreed that training should commence once the review of the structure of the Tayside Superannuation Fund had been finalised.

III WM PERFORMANCE MEASUREMENT - 1999 ANNUAL REVIEW

There was submitted Report No. 357-2000 by the Director of Finance examining the detailed results, as calculated by the WM Company, achieved in 1999 by each of the balanced Fund Managers employed by the Council to manage the Tayside Superannuation Fund and the Tayside Transport Superannuation Fund.

The Sub-Committee noted the analysis of the performance of the Fund Managers as calculated by the WM Company.

IV REVIEW OF THE TAYSIDE SUPERANNUATION FUND

There was submitted Report No. 358-2000 by the Director of Finance updating members on the existing structure, management and custody of the Tayside Superannuation Fund portfolio and recommending a review of these arrangements.

The Sub-Committee noted the information contained in the report and approved the following recommendations:-

(a) the Director of Finance to review the structure of the Tayside Superannuation Fund and, in particular, the appointment of Schroder Investment Management and thereafter report back to a future meeting of the Sub-Committee;

(b) the Director of Finance to review the possibility of appointing a global custodian for the Tayside Superannuation Fund and report back to a future meeting of the Sub-Committee; and

(c) the Council's Actuaries, Hymans Robertson, be appointed as consultants to assist in both of the reviews at an estimated cost of 30,000.

V TAYSIDE PROPERTY PORTFOLIO - QUARTERLY REPORT

There was submitted a Report by Schroder Properties Limited reviewing activity of the portfolio during the period 1st January to 31st March, 2000 and the performance relative to the benchmark.

The portfolio for the quarter had shown a return slightly below the CAPS Pooled Pension Funds Median Property benchmark but the perfomance for the year to 31st March was ahead of the benchmark for the year.

VI TAYSIDE TRANSPORT SUPERANNUATION FUND

(a) There was submitted Report No. 359-2000 by the Director of Finance relating to WM Performance summaries for both the quarter and the year to 31st March, 2000.

(b) There was submitted Report No. 353-2000 by the Director of Finance summarising the portfolio distribution along with the investment and transaction activities for the quarter 1st January to 31st March, 2000.

The Sub-Committee noted the information contained herein with regard to the performance of the Transport Fund managed by Schroder Investment Management Limited.

VII TAYSIDE SUPERANNUATION FUND

(a) There was submitted Report No. 360-2000 by the Director of Finance relating to WM Performance summaries for both the quarter and the year to 31st March, 2000.

(b) There was submitted Report No. 352-2000 by the Director of Finance summarising the portfolio distribution along with the investment and transaction activities for the quarter 1st January to 31st March, 2000.

The Sub-Committee noted that the performances of all three Fund Managers for both the quarter and the year to 31st March, 2000 had out-performed the index.

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