Agenda and minutes

Apologies for absence were received from Councillors Adje and Mallet.

A member with a personal interest in a matter who attends a meeting of the authority at which the matter is considered must disclose to that meeting the existence and nature of that interest at the commencement of that consideration, or when the interest becomes apparent.

A member with a personal interest in a matter also has a prejudicial interest in that matter if the interest is one which a member of the public with knowledge of the relevant facts would reasonably regard as so significant that it is likely to prejudice the member's judgement of the public interest.

Councillors Basu & Khan, Chair, declared personal interests because of their membership of the Haringey Council Pension Fund.

         NOTED

At 18:00hrs Councillor Khan advised the meeting that he had to wait for 15 minute to get another Trustee elected member to start the AGM; accordingly he started the meeting when Councillor Basu arrived at 18:04hrs.

The Chair commenced the proceedings by saying that it was his greatest pleasure to mention that he was the first chair, in recent years of this Committee who started the AGM of the Fund six years ago, where each year now the fund members were getting a complete picture of the Funds’ administration, as well as investments by external fund managers, being scrutinised by the trustees, in presence of the internal & external professionals. 

The Chair went on to report that he along with other trustee members had been able to serve the fund prudently, taking all reasonable measures, complying with the available CIPFA Guidance & Myners Principles, being assisted by the council officers, external advisers & independent adviser. He told the fund members present, that they were the best judge to decide about the trustee’s performance. As regards the scrutiny process, where individual fund managers in the four quarterly meetings were scrutinised, being assisted by independent adviser, relating to respective investment portfolios and progress. These measures were in addition to our officers’ scrutiny of the fund managers periodically. He further mentioned that the committee also scrutinising the council officers also as to whether the fund members were getting due information or not.

He further added that the Pensions Committee was now a full Committee, independent of any parent body, with its own terms of reference and reporting only to the Council, consisted of 8 elected members – all reasonably trained and with considerable experience; out of the 8 members , 4 Labour & four Liberal ; two Executive members sitting on the Pensions Committee. The Committee ordinarily arrived at decisions by a consensus view as opposed to a majority vote.  The Committee worked exceptionally hard to ensure that the fund benefited its Members, the fund itself, the tax payers of Haringey.  As at 15 February 2007 the valuation showed a funding level increased to 80% although this figure could vary as at 31 March 2007.

The Chair commented that in one respect he was not able to get an Advisory Committee to scrutinize the Pensions Committee from amongst the admitted bodies & pensioners, which he believed that those present at the meeting should take leading role to form one to scrutinise the performance of the Committee.  The Chair also reported that there was structured good news, as the investment review, reported the previous year was concluded on 20 November 2006, and implemented on 16 March 2007. There were now 4 fund managers – Alliance, Capital, Fidelity, and Ing – with Wellington being sacked due to poor performance.  A further 3 were appointed – Panthean, and 2 currency managers – Investec & Record – to overcome currency risk. Two currency managers were appointed specifically to reduce the overall currency risk within the fund, while adding another diversifying source of  ...  view the full minutes text for item 3.

There being no comments or observations of accuracy the Chair MOVED and it was:

RESOLVED

That the minutes of the Pensions AGM held on 18 July 2006 be agreed as an accurate record of the proceedings and the Chair be authorised to sign them.

The Annual report, which contained informative and useful information was tabled and was approved by the meeting.

With the aid of power point the Acting Director of Finance  - Mr Almeroth gave the AGM a presentation in respect of the Pension Fund Accounts for the year ending 31 March 2007.

In respect of the review of the investment strategy the Authority had just completed its full review of the Fund’s Investment management strategy and the new structure was implemented on 16 March 2007.  During the review process Trustees were advised by Mr Almeroth, acting as the Independent Advisor to the Trustees, and also by the external advisors – Hymans Robertson.  The key changes of the review were

• the reduction of UK equities held from 43 to 30%;
• an increase in overseas equities held from 27 to 35%
• the introduction of a 5% global market cap mandate (incl. in above numbers)
• the introduction of a 5% allocation to private equity
• the introduction of an active currency overlay and passive currency hedging
• an increae in propoerty allocation from 6 to 10%
• a reduction in bonds holdings from 22 to 20%

Mr Almeroth commented that the advice received stated that the changes would further improve the opportunities for growing the fund whilst taking due regard to risk.  Also as advised by the Chair Wellington ceased to be a fund manager.  Mr Almerith commented that it would take time to increase holdings in property and to build holdings in private equity and currency.

Mr Almeroth referred to the the fund structure which was in place for most of the 2006/07 year until the new structure was introduced.  The approx % of fund managed was –

·        Bernstein                              21%

·        Capital International            27%

·        Fidelity                                  26%

·        ING                                        6%

·        Wellington                            20%

The fund value had increased from £573 million as at 31 March 2006 to £620 million as at 31 March 2007, due to increased investment returns. The fund had increased by 6.11% over past year, which was just below the benchmark by 0.77% and below the target by 2.42%.

There had been some difficulty in measuring performance to 31 March 2007 due to the transition to the new structure on 16 March 2007 and it then took a further 10 days before some fund managers could make decisions to buy and sell equities and bonds, and further major changes to benchmarks were also made.  As a result the performance was compared to the end of February 2007 for fund managers whose benchmarks changed, and for the other fund managers and the total fund the performance to the end of March 2007 was shown, but compared against the previous benchmark that was in place for most of that year.

There had been a mixed performance by the Fund Managers in meeting their benchmarks and targets, for investment returns over the past year. Performance targets had been set for each Fund Manager, with three Fund Managers having beaten their benchmark and one beat their target. Individual fund manager performance was rigorously monitored and Officers held quarterly review meetings with Fund Managers and Trustees held similar review meetings,  ...  view the full minutes text for item 6.

·          A New Look Scheme:- It’s in a Different League

                  Ian Benson :  Pensions Manager

·        Pensions Matter:- It’s a Whole New Ball Game

                      Stuart Young :  Assistant Chief Executive ~

People and Organisational Development

The gave a succinct presentation with aid of power point.

With the aid of power point the Assistant Chief Executive – People and Organisational Development – Mr Young, and Mr Benson – Head of Pensions gave the AGM a succinct presentation in respect of the Pensions entitled ‘It’s a presentation of two halves’.

It was commented that for both employers and employees pension issues had changed and for the employee especially their employment lifecycle was changing.  It was a fact that people did not automatically remain in the position they may have originally commenced their employment in and redeployment was now part of the employment cycle.  Mr Young advised that in the past year 17 people had been redeployed in Haringey in the last financial year which was a saving to the Council of £250K.  In tandem with redeployment the Council’s reskilling and retention process had improved and skills assessment, monthly life and career coaching, group support and investment for reskilling were now common in Haringey. This was coupled with better and more flexible retirement options for employees.

Reference was made to the concept of flexible working. Whilst this was not a new venture the Council was looking to further the concept of home working, working compressed hours and varying the flexible working arrangements.  Also there were proposals to introduce desk sharing, and mobile working, and with these additional concepts they attributed to greater organisational credibility through technological advances and HR systems to operate the processes. Already there was evidence of progress and improved work output.  The better office layouts in both River Park House, and Alexandra House enhanced a better working environment.

It was a fact that the current workforce was an ageing one with 15.5% 55 years  or more, and a rise in the past 3 years of 30% in the 45-55 age group.  It was the case that as the Council reviewed its package of employee benefits,  pensions became a more central part of package offer, and with pension schemes receiving much more publicity in recent years people were far more aware of the value of a decent pension scheme. In terms of the pension scheme and who actually qualified – it was in the interest of all members that the fund was not drained and there was a continued need to underpin the pensions policy.  In terms of flexible retirement and the rules surrounding this process it was a fact that there must not be a cost to the fund arising from this .

Mr Benson and Mr Young went on to briefly outline:

·        How the fund was protected when there was early release of benefits

·        How flexible retirement worked and the conditions that applied

Following the presentation a useful question and answer session then followed. 

Following a number of further questions and answers the Chair thanked those present for their attendance.

The Chair thanked the attendance by officers of the Authority.  There being no further questions the Chair thanked all those attending and he reiterated his earlier comments that perhaps the there needed to be a monitoring group formed from the pension contributors to monitor the functions and performance of the Pensions Committee. The Chair also stated that any member of the pensions fund could put any question to him in writing and he would ensure that answer was forthcoming.

There being no further questions the AGM closed at 19.27hrs.

The Chair received a round of applause from those attending.

NOTED