Agenda and minutes

Pensions Committee - Wednesday 11 March 2020 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 183 KB

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

    Additional documents:

    Minutes:

    Councillor Mary Atkins questioned the meaning of bullet point 4 under section 3 of the previous minutes, “benchmark underperformance is likely to be due to fixed issues rather than the markets.” Tony English, Mercer Investment Consulting, reassured the Committee that he would amend the line and Members with the update. He believed that the line referred to UK Government Bond Mandates, as Lambeth was exclusively invested in UK Government Bonds.

     

    Peter Woodward noted that although previously recorded in the minutes, font size had again decreased and were illegible; he had received the agenda only the day before the meeting; and, asked that the front page be amended as all Committee Members had voting rights.

     

    RESOLVED:That the minutes of the meeting 20 November 2019 were agreed as an accurate record of proceedings.

3.

Investment Performance Report pdf icon PDF 253 KB

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for

    Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 020

    7926 0576, ameyers@lambeth.gov.uk

     

    For noting

    Additional documents:

    Minutes:

    Andrien Meyers, Head of Treasury and Pensions, presented the report and answered questions as below:

     

    ·           Asset values had remained the same and now totalled £1.8m, an increase of 48bps for the year;

    ·           Diversified Growth Funds (DGFs) and Property Assets had been the main cause for the underperformance of the Fund; and,

    ·           The Fund was currently cashflow negative. Andrien Meyers explained that they are in the process of moving £60m to a Money Market Fund (MMF).

    ·           The two mandates discussed in the previous meeting were now both complete. Both Insight’s Liability Driven Investment Fund (LDI) and Massachusetts Financial Services Fund (MFS) had been moved.

    ·           One possible reason for the underperformance of the Emerging Markets and Property Assets could be the termination of Janus Henderson, which was highly invested in retail which had fallen over the last quarter;

    ·           The Fund was in the process of divesting from PAAMCO;

    ·           When the Fund originally invested in LDI, which was led by bond yields, the asset was showing high returns; however, due to recent market conditions, the asset was at historic lows;

    ·           In order to have a proper comparison between fossil fuel and fossil-free investments, an index-based benchmark with similar asset classes would be needed. The Fund’s direct exposure was zero, whilst indirect exposure was higher due to Equity Investments; and,

    ·           A decision to have an entirely fossil-free portfolio would not only impact Lambeth’s fund, but all those in the pooled fund.  The London CIV had selected the benchmark for Councils’ fossil-free investments. The Committee could consider having an exclusive fund for fossil fuel-free investments.

     

    Members requested that a separate report be circulated to the Committee with a deep dive on benchmark comparisons for the entire portfolio, with a particular focus on Emerging Markets and Property.

     

    Members would send Andrien Meyers a list of questions for him to clarify the impact on the Fund regarding fossil-free or fossil-fuel investments, and requested that the report included a section specifically noting fossil fuel investments losses and gains.

     

    RESOLVED:

    1.         That the report, together with the information in the accompanying exempt from disclosure report, be noted.

4.

Lambeth Pension Fund - Audit 2019/2020 Plan pdf icon PDF 175 KB

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 020 7926 0576, ameyers@lambeth.gov.uk

     

    For noting

    Additional documents:

    Minutes:

    Andrien Meyers, Head of Treasury and Pensions, presented the report and clarified that on page 35 of the Finance Summary, the audit fee payable should be £19,170, and not £16,170.

     

    RESOLVED:

    1.         That the report, together with the information in the accompanying exempt from disclosure report, be noted.

     

5.

Lambeth Pension Fund - Risk Register pdf icon PDF 129 KB

6.

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, 020 7926 0576, ameyers@lambeth.gov.uk

     

    For noting

    Additional documents:

    Minutes:

    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.

London CIV Presentation (Part ii)

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 020 7926 0576, ameyers@lambeth.gov.uk

     

    For noting

     

    Minutes:

    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.

Investment Strategy Report (Part ii)

    Wards: All

     

    Report authorised by: Fiona McDermott, Strategic Director for Finance and Investment

     

    Contact for enquiries: Andrien Meyers, Treasury and Pensions, 020 7926 0576, ameyers@lambeth.gov.uk

     

    For discussion and approval

    Additional documents:

    Minutes:

    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.

     

9.

Action Log and Work Programme pdf icon PDF 65 KB

    Contact for enquiries: Andrien Meyers, Treasury and Pensions,

    020 7926 0576, ameyers@lambeth.gov.uk

     

    For noting

    Additional documents:

    Minutes:

    Andrien Meyers, Head of Treasury and Pensions, provided updates to the Action Log:

    ·           DGF Fund assets were moved out on 11 March 2020 and a statement was released.

    ·           Officers would again attempt to schedule another training session, noting that at least four Members were required to attend in order for the session to proceed. All others would receive a paper written documentation.

     

    RESOLVED:

    1.    That the action log and work programme be noted.