Agenda and minutes

Pensions Committee - Wednesday 20 November 2019 6.30 pm

Venue: Committee Room (B6) - Lambeth Town Hall, Brixton, London, SW2 1RW. View directions

Contact: Shaughna Phillips, Telephone 020 7926 0045, Email: SPhillips4@lambeth.gov.uk 

Items
No. Item

1.

Declaration of Pecuniary Interests

    Minutes:

    There were no declarations of interest.

     

2.

Minutes of the Previous Meeting pdf icon PDF 101 KB

    To agree the minutes of the meeting of 20 November 2019 as an accurate record of the meeting.

    Additional documents:

    Minutes:

    Councillor Iain Simpson had raised a query on page 6 of the minutes regarding the Liability Driven Investment (LDI) benchmark investments. Andrien Meyers advised that under the London CIV, Legal and General Investment Management Limited (LGIM) had been asked to clarify what investments were held.

     

    RESOLVED:

    That the minutes of the meeting held on 18 September 2019 were agreed as a correct record and signed.

     

    It was noted that the print size on meeting paper packs had been increased for certain members as had previously been requested.

3.

Investment Performance Report pdf icon PDF 216 KB

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for

    Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 0207 926

    0576, ameyers@lambeth.gov.uk

     

    For noting

     

    Additional documents:

    Minutes:

    Steven Law (Hymans Robertson), Tony English (Mercer Investment

    Consulting), Sandy Dickson (Mercer Investment Consulting); and Andrien

    Meyers, Head of Treasury and Pensions; presented the report and

    answered questions as below:

     

    ·           Andrien Meyers reported that over the period the value of the Fund had increased by £10 million. This level of performance was not up-to-par. Furthermore, the report showed a 6% growth over the three-year period, which was 0.5% below the benchmark.  This further highlighted the shortage of the investment manager performance.

    ·           European markets had fallen.

    ·           Global equities had increased.

    ·           Benchmark underperformance was likely due to fixed issues rather than markets.

    ·           The current benchmarks were challenging in the current climate.

     

    A query was raised on what was challenging about the current conditions.

     

    ·           Mercer advised that 8% achieved over long-term made it harder to achieve over the short-term.  The main difficulty was in determining benchmark figures for Property and DGF. Managers were facing significant challenges in the current climate, which had not existed at the time that the benchmarks were proposed and agreed by investment managers

     

    Andrien Meyers advised that the Lambeth Pension Fund had two DGF’s with LCIV, namely Ruffer and Pyrford, and as an asset class, DGF had underperformed. This was something that the Lambeth Pension Fund had taken into account in the strategy and was also being looked into by other London pension funds.

     

    A query was raised on what exactly were Senior Loans?

     

    ·           Andrien Meyers advised that senior loans were private debt allocations to Permira and Churchill and were deemed as a relatively safe risk. £75-80m commitment circa only 10million actually invested.

     

    A further query was raised on why performance had been so low for the quarter. It was thought that it might be a common issue in the market, but it may have also reflected the long-term risk level of the investments.

     

    Andrien Meyers advised that the Fund’s fossil fuel exposure was currently 1.6% of assets (as noted in the papers) section 2.23, page 39, which also gave the breakdown of fossil fuel holdings by investment manager. Members enquired if there was a breakdown of the fossil fuel holdings of each investment manager and were advised that this list existed and was with officers.

     

    Andrien Meyers advised the Committee had not specifically stated that it had a policy on fossil fuels, even though the Chair advised carbon neutrality during previous meeting. Committee approved to be fossil fuel free on equity portion of the fund and that they were happy to move to fossil fuel free.

     

    It was noted that at a previous meeting, a declaration of no investments in fossil fuels had been made. However, this class may have been confused with the category of ‘carbon neutral’, which did not necessarily equate to fossil fuel free.  Clarity / consistency in reporting was requested.

     

    A request was made by the Committee for future reports to contain trend graphs and for Mercer to provide this in bar chart format.

     

    The Committee noted that the bar in the gilts graph  ...  view the full minutes text for item 3.

4.

Investment Performance Manager Report (Part ii)

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for

    Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 0207 926

    0576, ameyers@lambeth.gov.uk

     

    For noting

     

Minutes:

Exclusion of the press and public and summary of part II proceedings.

 

RESOLVED:

That under section 100A-H of the Local Government Act 1972, the press and public be excluded from the remainder of the meeting on the grounds that, for the item of business summarised below, it was likely that exempt information, as defined by Section 1001 and Schedule 12a of the Local Government Act 1972 and as specified by reference to the appropriate paragraph thereof, would be disclosed to them:

 

3.         Information relating to the financial or business affairs of any particular person including the authority holding that information.

 

5.

London CIV Update (Part ii)

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for

    Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 0207 926

    0576, ameyers@lambeth.gov.uk

     

    For noting

     

    Minutes:

    Exclusion of the press and public and summary of part II proceedings.

     

    RESOLVED:

    That under section 100A-H of the Local Government Act 1972, the press and public be excluded from the remainder of the meeting on the grounds that, for the item of business summarised below, it was likely that exempt information, as defined by Section 1001 and Schedule 12a of the Local Government Act 1972 and as specified by reference to the appropriate paragraph thereof, would be disclosed to them:

     

    3.         Information relating to the financial or business affairs of any particular person including the authority holding that information.

     

     

6.

Triennial Valuation 2019 (Part ii)

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for

    Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 0207 926

    0576, ameyers@lambeth.gov.uk

     

    For discussion and decision

     

Minutes:

Exclusion of the press and public and summary of part II proceedings.

 

RESOLVED:

That under section 100A-H of the Local Government Act 1972, the press and public be excluded from the remainder of the meeting on the grounds that, for the item of business summarised below, it was likely that exempt information, as defined by Section 1001 and Schedule 12a of the Local Government Act 1972 and as specified by reference to the appropriate paragraph thereof, would be disclosed to them:

 

3.         Information relating to the financial or business affairs of any particular person including the authority holding that information.

 

 

7.

LDI Implementation Strategy (Part ii)

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for

    Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 0207 926

    0576, ameyers@lambeth.gov.uk

     

    For discussion and decision

Minutes:

Exclusion of the press and public and summary of part II proceedings.

 

RESOLVED:

That under section 100A-H of the Local Government Act 1972, the press and public be excluded from the remainder of the meeting on the grounds that, for the item of business summarised below, it was likely that exempt information, as defined by Section 1001 and Schedule 12a of the Local Government Act 1972 and as specified by reference to the appropriate paragraph thereof, would be disclosed to them:

 

3.         Information relating to the financial or business affairs of any particular person including the authority holding that information.

 

 

8.

Action Log and Work Programme pdf icon PDF 151 KB

    For noting

    Additional documents:

    Minutes:

    During the discussion of this item, the guillotine fell at 8.30pm.

     

    It was MOVED by the Chair, and,

     

    RESOLVED:

    That in accordance with Standing Order 9.5-9.7, the meeting continue for a further period of up to 30 minutes.

     

    ·           LDI Training to be added to action log as soon as consultation has been concluded.

    ·           Training on investment strategies also to be added to action log.