Agenda item

A representative from the WM Company (State Street) will also attend for this item to cover investment performance of the Fund during 2015/16.

Report FSD16066

Members considered the annual report and accounts for the Bromley Pension Fund, year ending 31^st March 2016, including the following documents:

·  the Governance Policy Statement

·  the Funding Strategy Statement

·  the Statement of Investment Principles (SIP) and

·  the Communications Policy Statement.

Following its audit of the Annual Report, a statement from the Fund’s external auditor, KPMG LLP, was also included. The Council would publish the Annual Report on its website by 1^st December 2016.

Approved by the Sub-Committee on 23^rd September 2015, the Statements were kept under review and no changes were currently proposed. As such Members were requested to formally re-approve the Statements.

The Bromley Pension Fund had total net assets of £748.0m as at 31^st March 2016 (£745.4m as at 31^st March 2015). The Fund underperformed against its benchmark by 0.4% over the year (+0.1% against a benchmark return of +0.5%). Performance compared to the local authority universe (average return of +0.2%) was fair and a ranking in the 39^th percentile was achieved in the year (1% being the best and 100% being the worst).

Total fund membership had risen from 15,796 at 31^st March 2015 to 16,605 at 31^st March 2016 (6,234 employees, 5,084 pensioners and 5,287 deferred members). Payments into the Fund from contributions (employee and employer), transfers in and investment income totalled £42.1m in 2015/16 (£40.7m in 2014/15) and payments from the Fund for pensions, lump sums, transfers out and administration totalled £35.1m (£35.5m in 2014/15).

Linked to this item a representative from State Street (formerly the WM Company) gave a presentation reviewing the investment performance of the Fund during 2015/16.

It was noted that State Street no longer provided its service to funds in monitoring performance against the Local Authority universe and providing a benchmark. Member comments were made in support of the service and an alternative provision through Collective Investment Vehicles (CIVs) was being developed for which it was hoped a large enough proportion of the 89 LGPS funds would participate to provide meaningful comparator information. The Director of Finance had written to his counterpart in each London borough encouraging participation in the arrangement related to the London-wide CIV; should all London boroughs participate, there would be a significant discount to participating authorities and should all local authority funds nationally participate, a further discount would be available. Members supported the Director actively pursuing L B Bromley’s inclusion so it can continue to receive a similar service for the future. 

A Member suggested that the fund’s ranking in the local authority universe had fallen due to the fund’s Diversified Growth Fund (DGF) investments failing to perform well. He noted that Blackrock investments had also not performed well.

Members were advised that a briefing on the triennial fund valuation might be available in November with the final valuation details provided in February 2017.

RESOLVED that:

(1)  the Pension Fund Annual Report be noted and approved;

(2)  the Governance Policy Statement, Funding Strategy Statement, Statement of Investment Principles and, Communications Policy Statement be approved;

(3)  arrangements be made to ensure publication of the Annual Report by the statutory deadline of 1^st December 2016; and

(4)  the Director of Finance actively pursue L B Bromley’s inclusion amongst London boroughs wishing to receive a service similar to the provision formerly provided by State Street.