Agenda and minutes

Apologies for absence were received from Councillor Richard Scoates and Councillor Stephen Wells.

Members present declared an interest as members of the Bromley Local Government Pension Scheme.

The Chairman declared a pecuniary interest in relation to Item 9: Revised Investment Strategy – Diversified Growth Fund Manager Selection, as the company he worked for was on the short list of potential DGF Managers.  The Chairman left the room and did not take part in the discussion or vote on this item.

RESOLVED that the minutes of the meeting held on 19^th September 2012 (excluding exempt information) be confirmed as a correct record.

Pension Fund Annual Report 2011-12

(Minute 50 – 19^th September 2012)

The Chairman suggested a training evening for Members which could focus on issues such as global equities and fixed income. It was minuted that the Finance Director would prepare a framework for the evening and seek the views of the Sub-Committee.

The position to date is that Baillie Gifford, Fidelity, Barnett Waddingham and Allenbridge have been contacted and it is understood that Baillie Gifford have a standard Member training offering which is free of charge. Members might wish to suggest some dates for the training evening and further enquiries can then be taken forward.

Revised Investment Strategy – Update (Part 2)

(Minute 53/1 – 19^th September 2012)

Details on “Revised Investment Strategy – Diversified Growth Fund Manager Selection” are at item 9 in Part 2/Exempt proceedings of the agenda.

Members noted the following updates from previous meetings –

(A)  Pension Fund Annual Report (Minute 50, 19^th September 2012)

The Finance Director reported that three organisations had been approached to deliver a training evening to Members, focusing on issues such as global equities, fixed income and the tri-ennial review.  Baillie Gifford offered standard Member training in this area which was free of charge, and members of the Sub Committee agreed that Baillie Gifford should be approached to provide this training in early January 2012, and that all Members be invited to attend.  Officers would provide an outline of the training evening to all Members of the Pensions Investment Sub-Committee in advance of the meeting.

(B)  Auto-enrolment (Minute 35, 8^th May 2012)

The Finance Director advised the Sub-Committee that the implementation of auto enrolment to the pension scheme could be delayed from March 2013 to September 2017 for existing staff, and that this would be considered at a future meeting of the General Purposes and Licensing Committee.

(C)  London Mutual Pension Fund (Minute 35, 8^th May 2012)

The Finance Director noted that work continued to be undertaken around options for greater collaboration between London Boroughs pension funds and that there were many significant issues, including areas of real concern that needed to be considered. The outcome of any further work would be reported back to the Sub-Committee. No commitment from London Boroughs was required at this stage. 

In accordance with the Council’s Constitution, questions to this Sub-Committee must be received in writing four working days before the date of the meeting. Therefore please ensure that questions are received by the Democratic Services Team by 5pm on Friday 9^th November 2012.

No questions had been received.

Report RES12181

The Sub-Committee received a summary of the investment performance of Bromley’s Pension Fund for the first two quarters of the financial year 2012/13.  The report also contained information on general financial and membership trends relating to the Pension Fund and summarised information on early retirements.

The Independent Advisor to the Sub-Committee, Mr Alick Stevenson advised Members that the market value of the Fund rose during the September quarter to £509.2m which was an increase of £22.6m from the previous quarter.  The comparable value as at 30^th September 2011 was 434.0m, which showed an increase in the Fund value of £75.2m over the previous 12 months.

Returns for the quarter had been positive.  Baillie Gifford had returned 4.3% in the quarter, which was 0.1% above the benchmark.  Fidelity had returned 4.9% which was 0.8% above the benchmark.

With regard to Local Authority averages, the WM Company measure had ranked the Borough’s performance over the 12 month period to 30^th September 2012 as being in the 5^th percentile (out of 100), with performance over the last 3 years and 5 years both ranked in the 9^th percentile.

A Member highlighted the ongoing discussions with Affinity Sutton around the continued inclusion of former Broomleigh Housing Association employees as part of the Council’s pension fund under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), which protected employee’s terms and conditions of employment when a business was transferred from one owner to another.  It was key to ensure that all liabilities were covered as the Council underwrote the costs of the pension.  The Finance Director confirmed that work was being undertaken to secure a guarantee from Affinity Sutton to underwrite any future liabilities and noted that a further report would be provided to the next meeting of the Sub-Committee.

RESOLVED that the contents of the report be noted.

The Chairman to move that the Press and public be excluded during consideration of the items of business referred to below as it is likely in view of the nature of the business to be transacted or the nature of the proceedings that if members of the Press and public were present there would be disclosure to them of exempt information.

RESOLVED that the Press and public be excluded during consideration of the items of business referred to below as it was likely in view of the nature of the business to be transacted or the nature of the proceedings that if members of the Press and public were present there would be disclosure to them of exempt information.

The following summaries

refer to matters

involving exempt information

The exempt minutes of the meeting held on 19^th September 2012 were confirmed.

The Sub-Committee considered the revised investment strategy and heard presentations from the shortlist of prospective fund managers.

For information, printed copies of reports from Fidelity and Baillie Gifford are circulated to Sub-Committee Members with this agenda.

Quarterly reports from the Council’s Fund Managers, Fidelity and Baillie Gifford had been circulated prior to the meeting.