Agenda and minutes

RESOLVED:  That Committee Procedure Rule 26.1 be suspended to enable the recording or photographing or broadcasting of any part of the meeting.

To note the attendance at this meeting of any duly appointed Reserve Members.

Reserve Members may attend meetings:-

(i)                 to take the place of an ordinary Member for whom they are a reserve;

(ii)               where the ordinary Member will be absent for the whole of the meeting; and

(iii)             the meeting notes at the start of the meeting at the item ‘Reserves’ that the Reserve Member is or will be attending as a reserve;

(iv)              if a Reserve Member whose intention to attend has been noted arrives after the commencement of the meeting, then that Reserve Member can only act as a Member from the start of the next item of business on the agenda after his/her arrival.

RESOLVED:  To note that there were no Reserve Members in attendance.

To receive declarations of disclosable pecuniary or non pecuniary interests, arising from business to be transacted at this meeting, from:

(a)               all Members of the Panel;

(b)               all other Members present.

RESOLVED:  To note that the following interests were declared:

All Agenda Items

Councillor Barry McLeod-Cullinane declared a non-pecuniary interest in that he was a member of the Local Government Pension Scheme as an employee of London Councils.  He would remain in the room whilst the matter was considered and voted upon.

Agenda Item 14 – Barings Asset Management Ltd and Diversified Growth Funds Mandates

Councillor Bharat Thakker declared a non-pecuniary interest in that he held a Standard Life pension.  He would remain in the room whilst the matter was considered and voted upon.

That the minutes of the meeting held on 29 July 2014 be taken as read and signed as a correct record.

RESOLVED:  That the minutes of the meeting held on 29 July 2014 be taken as read and signed as a correct record.

To receive any public questions received in accordance with Committee Procedure Rule 17 (Part 4B of the Constitution).

Questions will be asked in the order notice of them was received and there be a time limit of 15 minutes.

[The deadline for receipt of public questions is 3.00 pm, 18 September 2014.  Questions should be sent to publicquestions@harrow.gov.uk  

No person may submit more than one question].

RESOLVED:  To note that no public questions were put, or petitions or deputations received at this meeting

Report of the Director of Finance and Assurance

The Committee agreed to receive the urgent report of the Director of Finance and Assurance requesting that the Independent Advisers should not be required to hold professional indemnity insurance as a condition of the contract, as their remit does not render it necessary.

A Member commented that it in this case it would be better that the role profile for Independent Advisers made reference to their ‘knowledge and experience’, rather than their ‘expert knowledge’ and members and officers agreed to the amendment.

RESOLVED:  That there is no requirement for Independent Advisers to hold professional indemnity insurance.

Report of the Director of Finance and Assurance

The Committee received a report and presentation by Karen Thrumble of State Street Global Services which provided a performance review of the London Borough of Harrow Pension Fund.

She described the Fund’s performance over one, three and ten year periods, and as compared with other local authority funds.

Members discussed the factors driving performance and considered how the selection of statistics and arrangement of data could demonstrate a positive or negative result.

RESOLVED:  That the report be noted.

Report of the Director of Finance and Assurance

The Committee received the report of the Director of Finance and Assurance on the establishment of a Pension Board.

Members expressed concern that the purpose, role and functions of the proposed Pension Board were unclear, and they could see no obvious benefit in the creation or workings of such a body.  They also believed it would be difficult to find suitably qualified people to serve on the Pension Board.  They asked that their views and concerns be added to those being put forward by industry groups and interested parties.

RESOLVED:  That the report and the Committee’s comments be noted.

Report of the Director of Finance and Assurance

The Committee received the report of the Director of Finance and Assurance setting out a revised Statement of Investment Principles.

Members requested the following amendments:

paragraph 4.1 (p42 of the agenda)

delete ‘index linked’ and insert ‘corporate’; delete ‘and active currency’.

paragraph 4.1 (p42 of the agenda)

include ‘Developed World’ within ‘Global’.

paragraph 7.5 (p44 of the agenda)

that the status and role of ‘Club Vita’ be clarified.

Paragraph 10.1 (p45 of the agenda)

emphasise that return on investments is the Fund’s priority

RESOLVED:  That, subject to the incorporation of the amendments proposed, the revised Statement of Investment Principles be approved.

Report of the Director of Finance and Assurance

The Committee received the report of the Director of Finance and Assurance which set out the London Borough of Harrow Pension Fund Annual Report and Financial Statements for the year ended 31 March 2014.

A Member expressed concern that terms used in the Auditor’s report, in respect of risk, could be misinterpreted and viewed in a negative light when in fact the report demonstrated that the Fund was in a healthy state with good administration and governance.

RESOLVED:  That the London Borough of Harrow Pension Fund Annual Report and Financial Statements for the year ended 31 March 2014 be noted.

Report of the Director of Finance and Assurance

The Committee received a tabled document and a verbal report on outstanding issues relating to the Pension Fund.

RESOLVED:  That the tabled document and verbal update be noted.

To resolve that the press and public be excluded from the meeting for the following item of business, on the grounds that it involves the likely disclosure of confidential information in breach of an obligation of confidence, or of exempt information as defined in Part I of Schedule 12A to the Local Government Act 1972:

RESOLVED:  That in accordance with Part I of Schedule 12A to the Local Government Act 1972, the press and public be excluded from the meeting for the following items for the reasons set out below:

Report of the Director of Finance and Assurance

The Committee received the report of the Director of Finance and Assurance which detailed the current position on the Diversified Growth Funds mandate managed by Barings Asset Management Ltd.

Tony Baily of Aon Hewitt advised the Committee on recent activity within the fund and the company.

Members discussed the options before them and agreed to terminate the existing contract with Barings and meet with a shortlist of investment managers in order to appoint a new fund manager.

RESOLVED:  That

(1)               the contract with Barings be terminated as soon as is practicable;

(2)               the current weighting in Diversified Growth Funds be maintained;

(3)               four fund managers be invited to present to the Committee in order to select a new fund manager;

(4)               a decision on how to manage the transition of funds be deferred to the next meeting of the Pension Fund Committee on 26 November 2014.

Report of the Director of Finance and Assurance

The Committee received the report of the Director of Finance and Assurance concerning correspondence from Blackrock Investment Management.

Members considered whether it would be beneficial to invite Blackrock Investment Management to a future meeting in order to discuss changes to their mandate, but were ultimately of the view that they would prefer more information from the company in the interim period and were minded to extend an invitation to attend the Pension Fund Committee meeting in March 2015.

RESOLVED:  That Blackrock Investment Management be requested to provide more information on their proposals, and having received this, to consider their proposals at a later date.

Report of the Director of Finance and Assurance

The Committee received a confidential report of the Director of Finance and Assurance which presented Aon Hewitt’s quarterly report on Harrow’s Fund Managers, detailing strengths and weaknesses and overall ratings.  It was noted that there had been one change of rating in the quarter.

RESOLVED:  That the report be noted.

Report of the Director of Finance and Assurance

The Committee received a confidential report of the Director of Finance and Assurance which set out the performance of the investment managers and of the overall fund for the quarter, year and three years ending 30 June 2014.

In response to a suggestion by an Independent adviser, an officer confirmed that a rolling work programme would be produced, to include meetings with Fund Managers, training sessions and relevant issues for consideration.

RESOLVED:  That the report be noted.