Agenda and minutes

Received from Councillor O’Sullivan.

None.

If you have a Disclosable Pecuniary Interest* in an item of business:

         if it is not yet on the council’s register, you must declare both the existence and details of it at the start of the meeting or when it becomes apparent;

         you may choose to declare a Disclosable Pecuniary Interest that is already in the register in the interests of openness and transparency. 

In both the above cases, you must leave the room without participating in discussion of the item.

If you have a personal interest in an item of business and you intend to speak or vote on the item you must declare both the existence and details of it at the start of the meeting or when it becomes apparent but you may participate in the discussion and vote on the item.

*(a)      Employment, etc - Any employment, office, trade, profession or vocation carried on for profit or gain.

(b)        Sponsorship - Any payment or other financial benefit in respect of your expenses in carrying out duties as a member, or of your election; including from a trade union.

(c)        Contracts - Any current contract for goods, services or works, between you or your partner (or a body in which one of you has a beneficial interest) and the council.

(d)        Land - Any beneficial interest in land which is within the council’s area.

(e)        Licences- Any licence to occupy land in the council’s area for a month or longer.

(f)        Corporate tenancies - Any tenancy between the council and a body in which you or your partner have a beneficial interest.

 (g) Securities - Any beneficial interest in securities of a body which has a place of business or land in the council’s area, if the total nominal value of the securities exceeds £25,000 or one hundredth of the total issued share capital of that body or of any one class of its issued share capital. 

This applies to all members present at the meeting.

None.

RESOLVED: 

That the minutes of the meeting held on 9 March 2015 be confirmed as a correct record and the Chair be authorised to sign them.

The Chair observed that the administration performance report would, in future, be submitted to the Pensions Board for consideration.

RESOLVED:

(a) That the performance against key performance indicators for the period from

1 February to 31 May 2015, including statistics regarding the internal dispute resolution procedure, complaints and compliments, as detailed in the report of the Corporate Director of Finance and Resources, be noted.

(b) That it be noted that Marion Oliver and Thelma Harvey (substitute) had been appointed to represent retired members, both on the Sub-Committee and the Board.

RESOLVED:

(a) That the performance of the Fund from 1 January to 31 March 2015, detailed in the report of the Corporate Director of Finance and Resources, be noted.

(b) That the quarterly WM Company report on the overall performance, updated market value and asset allocation of the Fund as at 31 March 2015, detailed in Appendix 1 to the report, be noted.

(c) That the report by AllenbridgeEpic Investment Advisers on fund managers’ quarterly performance, detailed in Appendix 2 to the report and their presentation, be noted.

(d) That the information in the Mercer bulletin of May 2015, entitled “May 2015 LGPS Current Issues”, attached as Appendix 3 to the report, be noted.   

(e) That the information in Appendix 4 to the report, entitled “Financial Conduct Authority fine of BNY Mellon”, the Fund’s custodian, be also noted.

David Cullinan, State Street Global Services, gave a presentation on the annual performance of the Fund. Copies of the presentation were circulated to members.

He reported that Islington’s Fund had performed in line with the sector average over the longer term, returning 5% pa ahead of inflation. The following points were noted:

·         That strong equity/property returns had boosted asset values, but equally strong bond returns had inflated liability values

·          The Fund had enjoyed healthy absolute returns but had lagged the benchmark in the short to medium term

·         The impact of overseas equity underperformance from 2008 -2010 remained

Members discussed the underperformance of UK equity this year compared to overseas and whether to reduce the exposure of the In-House passive fund to global exposure. It was noted that, in general, most pension funds had moved to a global approach.

In response to a question as to why Islington held a currency hedge fund and the cost of fees, it was reported that only equities were hedged and the fees were £5k per year. Karen Shackleton undertook to submit an information report to the next meeting of the Sub-Committee on currency hedging.

RESOLVED:

That the presentation be noted.

The Sub-Committee welcomed Chris Lyons, Client Relationship Manager at Legal and General Investment Management, to the meeting. A presentation on Islington’s Fund was circulated to members. This covered the management of Islington’s overall assets, portfolio activity and performance, a description of the FTSE RAFI fundamental index and the Legal and General asset allocation views at June 2015.

In response to a question about the number of basis points paid by Islington to Legal and General, Mr Lyons stated that it was just under 30 and that the RAFI was more expensive as it carried a licence fee.  He confirmed that, if Islington invested more into the Fund, the fee structure would be reviewed and possibly reduced.

RESOLVED:

That the presentation be noted.

Ian Kirk, Principal at Mercer, accompanied by Jon Ferreira and Nikeeta Kumar, gave a presentation on the actuarial valuations of Islington’s Pension Fund, including a recap of 2013 and issues for consideration in 2016.

It was noted that the deficit had increased since 2013 and assets and liabilities had continued to rise.

Members noted the low yield on gilts, as compared with, say, property investment.

For the future, alternative approaches on assumptions and the potential impact on contributions would need to be considered.

RESOLVED:

That the presentation be noted.

RESOLVED:

That the following amendments be made to the Forward Plan of business for meeting of the Sub-Committee for 2015/16, detailed in Appendix A to the report of the Corporate Director of Finance and Resources:

14 September 2015 – add “Private equity” presentation

16 November 2015 – add “Franklin Templeton” presentation