Agenda and minutes

To confirm as a true record the Minutes of the meeting held on 24 November 2021.

An update was sought with regards to the question asked by Cllr Quigley relating to the Fund’s investment in fossil fuels, and whether the draft response had been finalised by the Chief Executive. It was advised that the matter would be addressed within the response to the written public question.

RESOLVED:

THAT the minutes of the meeting held on 24 November 2021 be confirmed, subject to the inclusion of the attendance of Local Pension Board members Cllr Michael Lilley and Trevor Ould.

To invite Members to declare any interest they might have in the matters on the agenda.

Cllr Paul Brading declared an interest as his wife was a member of the local government pension scheme.

Questions may be asked without notice but to guarantee a full reply at the meeting, a question must be put including the name and address of the questioner by delivery in writing or by electronic mail to Democratic Services at democratic.services@iow.gov.uk, no later than two clear working days before the start of the meeting. Therefore the deadline for written questions will be Friday, 11 February 2022.

Ms Sylvia May of Totland submitted a written question in relation to the Fund’s investments. A written response was provided (PQ 03/22).

The Investment Consultant of Hymans Robertson presented the investment performance report for the quarter ended 31 December 2021, which included a summary of market returns, capital market outlook, asset allocation, fund performance, and fund manager analysis. Consideration was given to the valuation of the fund’s investments as at 31 December 2021 and discussion took place regarding emerging markets, CPI inflation, and pooling. It was reported that at 15 February 2022, the fund’s funding level (ratio of assets to liabilities) was 103%, compared to 95% at the 2019 triennial valuation; which equates to a whole fund surplus of £22.9 million.

RESOLVED:

THAT the investment performance and funding level be noted.

To receive a presentation from Majedie Asset Management on the UK Equity portfolio.

The committee received a presentation from Majedie Asset Management on the UK Equity portfolio. This included an overview of Majedie’s acquisition by Liontrust, the funds’ performance and performance attribution, embedding the ESG approach relating to renewable energy and fossil fuels, working with flexible investors, future performance drivers, stocks enabled by technologies, stocks with pricing power, international revenues, and portfolio positioning.

Questions were raised regarding portfolio oversight following the acquisition by  Liontrust and any operational or logistical changes. Comments were made in relation to proactive disinvestments, indirect investments, and the balance between fossil fuels and renewable energies. Discussion took place regarding Shell and it was agreed that Majedie would provide the committee with information detailing the steps being taken to become more sustainable.

RESOLVED:

THAT the fund manager’s presentation be noted.

To note the progress towards completing the recruitment, selection and appointment of pension board members, including the report to Full Council on 19 January 2022.

The Technical Finance Manager presented the report which provided an update on the recruitment, selection and appointment of Local Pension Board members. No questions were raised at this stage. Discussion took place regarding the Fund’s budgeting processes and it was requested that resources be allocated to ensure that future reports to the Committee including a breakdown of the costs to the Fund.

RESOLVED:

THAT the update be noted.

To receive an update on ESG/RI activities and developments since the last meeting.

The Technical Finance Manager presented the report which provided an update on the activities the fund had undertaken since the last meeting in its considerations of environmental, social and governance (ESG) factors and responsible investment (RI) activities. No questions were raised at this stage, and the update was noted.

RESOLVED:

THAT the update be noted.

To confirm the record of training and development activities undertaken by committee members since the last meeting, and to receive a verbal update on committee members’ completion of the Pension Regulator’s online toolkit.

The committee received the record of training and development activities undertaken by committee members since the last meeting, and the Technical Finance Manager provided a verbal update on committee members’ completion of the Pension Regulator’s online toolkit. No questions were raised at this stage, and the update was noted.

RESOLVED:

THAT the update be noted.

To receive a verbal update on current issues including the Levelling Up white paper and future consultations.

The committee noted the items circulated for information since the last meeting. No questions were raised at this stage.

RESOLVED:

THAT the items circulated for attention be noted.

A question may be asked at the meeting without prior notice but in these circumstances there is no guarantee that a full reply will be given at the meeting. To guarantee a reply to a question, a question  must be submitted in writing or by electronic mail to democratic.services@iow.gov.uk no later than 10.00am on Monday 14 February 2022.

No member’s questions were received.

To consider passing a resolution that, under Section 100(A)(4) of the Local Government Act 1972, the public and press be excluded from the meeting for the following item of business, namely agenda items 13 to 17 on the grounds that there is likely to be disclosure of exempt information as defined in paragraphs 3 of Part 1 of Schedule 12A of the Act and in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

RESOLVED:

THAT the public and press be excluded.

To receive a report from the fund’s investment consultants on the completion of the equity investment rebalancing, including costs.

The committee considered a confidential report from the fund’s investment consultants on the completion of the equity investment rebalancing.

RESOLVED:

THAT the report be noted.

To receive an update on activity with the ACCESS pool since the last committee meeting.

The committee considered a confidential report on recent ACCESS pool activities and set out proposals for future engagement with matters to be discussed at future Joint Committee meetings.

RESOLVED:

i.      THAT the report be noted.

ii.     THAT the ACCESS business plan for 2022-23, and the associated budget as recommended by the Joint Committee, be adopted.

iii.    THAT the provision of feedback on the ACCESS ESG/RI guidelines be delegated to the Technical Finance Manager, in consultation with the vice-chairman of the committee.

iv.   THAT the appointment of MJ Hudson as implementation adviser for the Pool’s illiquid asset solutions be noted.

v.     THAT the committee’s response to the proposed solution for the representation of scheme members on the ACCESS Joint Committee be confirmed.

To discuss the progress in creating a risk register for the fund, and to agree the process by which risks will be monitored, updated, and reported at future meetings. 

Consideration was given to the development of a risk register for the Fund, and the process by which risks will be monitored, updated, and reported at future meetings. It was advised that the draft risk register would be available for the Local Pension Board at its meeting on 23 March 2022.

RESOLVED:

THAT the update be noted.

To receive a verbal report on the completion of the draft governance compliance statement for the year ended 31 March 2022.

The committee considered a confidential verbal update on the completion of the draft governance compliance statement for the year ended 31 March 2022. It was advised that the draft would be presented to the Committee at the meeting in May 2022, ahead of its final submission for adoption in July 2022.

RESOLVED:

THAT the update be noted.

To receive an update on contract management activities.

The committee considered a confidential report which summarised the activities undertaken in the review of the existing contracts of the Fund and future planned procurement activity.

RESOLVED:

THAT the report be noted.