Venue: MS Teams with Outside Broadcasting
Contact: David Northover Email: d.r.northover@dorsetcc.gov.uk
No. | Item |
---|---|
Apologies To receive any apologies for absence. Minutes: No apologies for absence were received at the meeting. |
|
Welcome and Statement from the Chairman Minutes: The Chairman welcomed Committee members
and others, and made the following statement: “In the light of the increasing Covid-19
case rates and projected increases through August and September, in
consultation with group leaders, Dorset Council’s Chief Executive has exercised
his emergency powers to revert to informal virtual meetings. Where a decision is required, committee
members will express a ‘minded to’ decision in respect of recommendations set
out in officer reports, with decisions being made under officer delegated
authority in the light of ‘minded to decisions’ expressed by members in the
virtual meetings Accordingly, this meeting has those
arrangements in place.” |
|
To receive and note the
minutes of the meeting held on 15 June 2021. Minutes: The minutes of
the meeting held on 15 June 2021 were received and noted by the Chairman. |
|
Declarations of Interest To disclose any pecuniary, other registrable or
non-registrable interests as set out in the adopted Code of Conduct. In making
their decision councillors are asked to state the agenda item, the nature of
the interest and any action they propose to take as part of their declaration. If required, further advice
should be sought from the Monitoring Officer in advance of the meeting. Minutes: No declarations of disclosable pecuniary interests were made at the meeting. |
|
Public Participation PDF 286 KB To receive questions or
statements on the business of the committee from town and parish councils and
members of the public. Minutes: The public questions, together with the responses from
the Chairman of the Committee, are set out in the Appendix to the minutes. |
|
Questions from Members To receive
questions or statements on the business of the committee from Dorset Council
elected members. Minutes: There were no questions from members. |
|
Urgent items To consider any items of business which the Chairman has had
prior notification and considers to be urgent pursuant to section 100B (4) b)
of the Local Government Act 1972. The reason for the urgency shall be recorded
in the minutes. Minutes: There were no urgent items. |
|
Pensions Administration PDF 158 KB To consider the quarterly report on
pension fund administration. Additional documents: Minutes: The Committee considered a report from officers on operational and
administration matters relating to the pension fund. The change of administration system since the last meeting meant that
Key Performance Indicators (KPI) reporting was not available but would resume
before the next meeting in November. The new system was working well but
development and testing had taken longer than anticipated. Historic records had moved across from the
old system. The chairman greatly appreciated the efforts of the administration team
to implement the changes particularly given the disruption caused by Covid on working practices. Officers would investigate whether Her Majesty’s Revenue & Customs
(HMRC) Connect was an appropriate fraud detection tool in addition to existing
measures employed such as the National Fraud Initiative. The final results of the 2016 and 2020 cost cap
reviews could result in changes to benefits going back to 2016. In addition, the changes to benefits
resulting from the remedy for the McCloud case were still unknown. Noted |
|
Independent Adviser's Report PDF 289 KB To consider
the quarterly report of the pension fund’s independent investment adviser on
the outlook for the pension fund’s investments. Minutes: The Committee considered a report from Alan Saunders, the pension fund’s
Independent Investment Adviser, that gave his views on the economic background
to the pension fund’s investments, the outlook for different asset classes and
key market risks. Inflation continued to be a concern.
Central banks seemed ‘relaxed’ that increases were transitory as
economies recovered from the impacts of the pandemic and had given no
indication of immediate action. Tapering
of quantitative easing was anticipated but increases to interest rates were
not. However, some commentators were
concerned that there were more structural reasons for inflation rises and
feared a ‘wage-price’ spiral could emerge that would ‘lock-in’ higher inflation
for longer. The implied long-term annual UK inflation rate in the market was 3.6%
compared to the Bank of England target of 2%.
This meant that the cost of inflation hedging was prohibitive to
increasing the hedging ratio at this time. Noted |
|
Fund Administrator's Report PDF 205 KB To consider
the quarterly report of the Fund Administrator including an update on the
funding position, the value and performance of investments and other topical
issues. Additional documents:
Minutes: The Committee considered a report from officers on the pension fund’s
funding position, asset valuation, investment performance and asset allocation
as at 30 June 2021. The value of the pension fund’s assets ended the quarter at £3.5 billion
compared to £3.3 billion at the start of the financial year. The funding
position estimated by the actuary was that the value of the pension fund’s
assets covered 86% of the present value of liabilities. The investment return
for the quarter was nearly 6%, above the combined benchmark by about 1.3%. Just under 30% of the pension fund’s
liabilities were hedged against inflation sensitivity using 11.2% of assets to
do so. Nearly two thirds of the pension
fund’s assets were now under the management of Brunel. Target allocations to public markets had been achieved or exceeded but
achieving target allocations for private market assets remained a
challenge. Following the previous day’s
training, officers would prepare proposals for commitments to Brunel’s cycle
three private markets’ funds for consideration by the Committee at the next
meeting 30 November 2021. Hermes, one of the pension fund’s infrastructure managers, and Aberdeen
Standard, one of the pension fund’s private equity managers would both be
invited to a future meeting of the Committee to discuss performance concerns. Cllr John Beesley, the pension fund’s representative on the Brunel
Oversight Board, updated the Committee on governance matters relating to the
investment pooling partnership. Noted |
|
External Auditor's Report 2019/20 PDF 108 KB To consider the report of the external auditor for 2019/20 Additional documents: Minutes: The Committee considered the draft report of
Deloitte, the pension fund’s independent external auditor, on the
financial statements for2019/20. No substantive matters and been identified but
it was noted that this was still not the final report. The final report would be circulated to
Committee members when it was received. Noted |
|
Dates of Future Meetings To confirm the dates for the meetings of the Committee in 2021: 10am
Tuesday 30 November 2021 – County Hall (tbc) Minutes: Resolved That meetings be held on the following dates: 10am Tuesday 30 November 2021 – County
Hall, Dorchester (tbc) |
|
Exempt Business To move the exclusion of the press and the public for the following item
in view of the likely disclosure of exempt information within the meaning of
paragraph 3 of schedule 12 A to the Local Government Act 1972 (as amended). The public and the press will be asked to leave the meeting whilst the
item of business is considered. Minutes: Resolved That under Section 100A(4) of the Local Government Act 1972, the public be
excluded from the meeting for the business specified in minute 14 because it
was likely that if members of the public were present there would be disclosure
to them of exempt information as defined in Paragraph 3 of Part 1 of Schedule
12A to the Act and the public interest in withholding the information outweighs
the public interest in disclosing that information. |
|
Property Investment Report To consider a
report from CBRE, the pension fund’s property investment manager. Minutes: The Committee considered a report from CBRE Global Investors, the
pension fund’s property investments manager.
CBRE gave an update on market conditions and outlook for the sector,
recent transactions, lease expiries and vacancies. Noted |
|
Questions and Answers Minutes: Councillor
Canning told me earlier this year that the data in the UK Divest Report for
Friends of the Earth of February 2021 was out of date for Dorset Council (https://www.divest.org.uk/wp-content/uploads/2021/03/UKDivest_Report.pdf). He said
that since those figures, which related to the 2019/2020 financial year, Dorset
Council had undertaken a major strategic review of its pension fund
investments. He promised an update after March 2021. The question is:
what is the current amount of investment in fossil fuels (I understand these
are indirect investments)? The figures provided by the Friends of the Earth
report are for the amount in £s of investments and the % that is of the overall
investments. It would be useful to have it in the same format to compare. So this is not a question about the carbon footprint or the
carbon intensity of the investments. The figure in the Friends of the Earth
report was £128 million in indirect investment in fossil fuels. This put Dorset
in the top 10 of local authority pension funds for fossil fuel investments.
What is the current figure? Answer 1 As part of the government’s requirement for Local
Government Pension Scheme (LGPS) funds to pool investments the Dorset County
Pension Fund no longer holds direct investments in companies. Instead, the vast majority of its equity
investments are now in pooled investment vehicles managed by the Brunel Pension
Partnership, the LGPS investment pooling manager set up and fully owned by the
administering authorities of ten LGPS funds including Dorset. Brunel regularly publish details on their
website of the underlying holdings in all their pooled investment
vehicles. Using this information officers have estimated that the value
of the pension fund’s investments as at 31 March 2021 in companies primarily
involved in the exploration, production, mining and/or refining of fossil fuels
was approximately £41M (1.2% of total investment assets). It is clear that pension funds exposed to the fossil fuel system
in the coming decade will face a rollercoaster ride of disruption, write-downs,
financial instability and share price deratings as markets adjust (Hobcraft, 2020)’ in UK Divest. Answer 2 The Dorset
County Pension Fund is part of the Local Government Pension Scheme (LGPS) which
is a national pension scheme administered locally. It is a ‘defined
benefit’ scheme which means that benefits for scheme members are calculated
based on factors such as age, length of membership and salary not investment
performance as they would be in a ‘defined contribution’ scheme. Dorset Council (DC) is the administering authority for the LGPS in Dorset which provides pensions and other benefits for employees of DC, other councils and a number of other organisations within the county. DC has delegated its responsibilities as an administering authority to the Pension ... view the full minutes text for item 124. |