Attendance and Apologies / Presenoldeb ac Ymddiheuriadau
1.1 No apologies were received.
1.2 The Chair confirmed that he would be leaving the meeting early
in order to attend a funeral and the Committee agreed that Cllr
Peter Jones would take over as Chair at that point.
1.3 The HoP introduced the PIM, who had
been recently appointed.
Declarations of Interest / Datganiadau o fudd
2.1 Members confirmed the following declarations of personal
interest as read by the CLO:
Receipt of Pension
Self and son-in-law. Wife is a
Self and wife
Partner and daughter
2.2 The CLO left the meeting.
Minutes 9/9/19 / Cofnodion 9/9/19 PDF 445 KB
3.1 The minutes of the meeting held on 9 September 2019 were
confirmed as an accurate record.
For information: draft minutes of the Pension Board meeting of 23/10/19 / Er gwybodaeth: Cofnodion drafft cyfarfod y Bwrdd Pensiynau 23/10/19 PDF 523 KB
4.1 The Committee noted the minutes.
Wales Pension Partnership Pooling Update / Y Diweddaraf ar Gyfuno Partneriaeth Pensiynau Cymru PDF 313 KB
5.1 The HoP highlighted the following
key headlines from the report:
- Regarding Tranche 2 – UK and European Equities, £420
million had been moved into the UK pool on 23 September 2019 and
its value had climbed to £433 million. Performance was ahead
of the benchmark in this area; however the full performance figures
were not yet available.
- Following the above, £33 million had initially remained
with Lazard, who had provided helpful insight in terms of
investment positioning in light of the UK elections.
- Tranche 3 – Fixed Interest – Structure and Manager
Composition was likely to be launched in February 2020.
- Tranche 4 – Emerging Markets and Tranche 5 –
Alternative Investments (Private Markets) were quietly
- Transition costs impacted upon immediate
5.2 The DIIA suggested that it was important to monitor and assess
the role of the Custodian in terms of the timing and techniques
used around moving stocks.
5.3 The Pensions Committee agreed to note the content
of the report.
5.4 Cllr Huw Bevan entered the meeting.
Quarterly Investment Performance Report to 30/9/19 / Adroddiad Perfformiad Buddsoddi Chwarterol 30/9/19 PDF 999 KB
6.1 The HoP highlighted the following
key headlines from the report:
Fund reported a positive investment return of +1.82% for the
quarter, with an increase in assets from £3,058 million at 30
June 2019 to over £3,112 million at 30 September 2019. The
above represented a slight underperformance against the
value of the Fund had reduced to £3,074 million at the end of
October 2019; however it had increased to £3,131 million at
the end of November 2019.
- Markets had been influenced by trade discussions between the US
and China, as well as issues around Brexit, with some concerns
regarding slowing global growth.
- £420 million of investments had been moved from Lazard to
the Wales Pension Partnership (WPP). The amount held by Lazard had
now reduced to £1 million, which was invested in the Stobart
Group and the shares would be relisted in the New Year following a
successful rescue package of the company.
- During the transition of investments it was possible that funds
could suffer from market risks, due to increased transaction costs
and being out of the market for a limited period of
- Investment performance was positive during the last quarter and
the last year; however it was slightly below the
Blackrock European Equity Fund had suffered a particularly negative
quarter, underperforming its benchmark for the second successive
quarter; however the HoP reminded
everyone that these investments would be moved into Alternatives in
majority of investment managers had outperformed their benchmarks
during the quarter; however consideration would need to be given to
the investment strategy attributed to Invesco, who had slightly
underperformed its benchmark.
WPP Global Opportunities Equity Sub Fund had completed its second
full quarter of trading and had finished ahead of the benchmark
with outperformance of +0.53% during this quarter.
The IIA provided the following headlines from Appendix 1 of the
- Markets around the world had experienced a mixed quarter, with
record highs seen in the US, compared to record lows in Europe in
terms of growth and interest rates.
- Following the UK elections, Sterling had rallied and hopefully
the uncertainty around Brexit would become clearer.
US was the fulcrum of global markets, with the US Dollar being the
strongest global currency.
recent changes to the UK Stewardship Code meant that funds would
need to demonstrate their adherence to Environment, Social and
Governance (ESG) issues.
European Central Bank key rate had reported a record low, as shown
in the table at the bottom of page 60 of the agenda.
- News flow impacted the market, with the quarter seeing “a
traffic jam of noise and data”.
6.3 Following questions from the Committee, the HoP, the IIA and the DIIA made the following
IIA was sceptical regarding the level of progress seen between the
US and China, suggesting that President Trump had merely reversed
his decisions around tariffs to their original position before he
IIA expected investment ...
view the full minutes text for item 6.
Pension Fund Investments; Towards Broader Diversification / Buddsoddiadau'r Gronfa Bensiwn; Tuag at Arallgyfeirio Ehangach PDF 281 KB
7.1 The HoP highlighted the following
key headlines from the report:
the meeting held on 9 September 2019 the Pensions Committee agreed
a significant change in their Strategic Asset Allocation for the
- Officers had been requested to produce a more detailed
implementation report of how to action the development of the
increased weighting to Alternative asset categories.
advance of any further report being brought back to Committee, it
was considered sensible to provide members of the Committee with an
early insight into the different asset classes that might form
component parts of a future blended Alternatives strategy. This
would be done by way of a presentation.
7.2 The IIA and the DIIA delivered a presentation, as outlined
7.3 The Chair (Cllr Caron) left the meeting. Cllr Jones took over as
7.4 Following questions from the Committee, the HoP and the DIIA made the following
HoP reminded members of the Committee
that the long-term request from Central Government was for 100% of
the Fund’s investments to be made via the WPP; however he
acknowledged that the investment options available through the WPP
may not always meet the Fund’s requirements, and therefore
investments outside of the WPP may need to be
HoP confirmed that only sensible
investment proposals with sufficiently strong returns would be
tabled for the Committee’s consideration, and the thresholds
identified by the Actuarial Valuation would play an important role
in this process.
HoP explained the importance of cash
management, as cash needed to be available to pay such things as
benefits and investment fees. With this in mind, some money could
be reinvested by investment managers; however some would need to be
returned to the Fund. He added that multi asset funds were quickly
tradeable and would therefore assist with the above.
terms of investments in infrastructure, the DIIA suggested that it
may be sensible to invest in a mixture of local and wider projects.
The HoP added that Central Government
had previously encouraged investments in infrastructure; however
this had recently eased off.
HoP acknowledged that the Fund could
invest in infrastructure individually; however it was a specialist
area that may be best served via opportunities through the
7.5 The Pensions Committee agreed to note the content
of the report and the related presentation.
Actuarial Valuation Summary Results / Canlyniadau Crynodeb Prisio Actiwaraidd PDF 410 KB
8.1 The PM highlighted the following key headlines from the
purpose of the 2019 Valuation was to assess the overall funding
level of the Fund, to ensure that there were sufficient assets in
the Fund to cover the pension benefits accrued and to set the
employer contribution rate for the three year period commencing 1
demographic assumptions, financial assumptions and investment
returns were outlined in paragraphs 5 and 6 of the report
- There had been a significant improvement in the reported funding
level of the Fund from 72% in 2016 to 86% at the 2019 Valuation and
a reduction in the funding deficit from £850m to
Fund had experienced better than expected investment returns since
the 2016 Valuation, with the figures provided in the table in
paragraph 8.2.1 of the report.
areas of membership experience that had the greatest impact on the
surplus / deficit position of the Fund could be seen in the table
in paragraph 8.4.1 of the report.
letter would be sent to each of the participating employers setting
out their position as at the Valuation date, to include an
individual schedule of their results, in the week commencing 16
December 2019. An employer meeting would also be held on 24 January
2020, which the Actuary would be attending.
McCloud case was still ongoing and as a result the Actuary’s
approach would be guided by the advice from the Scheme Advisory
Board on 14 May 2019, outlined in paragraph 11.4 of the
8.2 The Pensions Committee agreed to note the content
of the report.
Voting at Company Meetings on behalf of the Pension Fund / Pleidleisio mewn Cyfarfodydd Cwmnïau ar ran y Gronfa Bensiwn PDF 277 KB
9.1 This agenda item was considered straight after agenda item 4, in
order for the Chair (Cllr Caron) to be part of the discussion
before he left the meeting early.
The HoP highlighted the following key
headlines from the report:
- Within the Fund’s Responsible Investing Policy framework
was the requirement that the Fund would engage with companies that
it invested in to influence behaviours around matters relating to
- Voting at company meetings formed a very important part of the
Governance strand mentioned above, and the Fund did this in large
part through policies of its managers but also via its work with
the Local Authorities Pension Fund Forum (LAPFF), of which the
Chair was a member of its Executive Committee.
report sought to authorise the Chair to vote on behalf of the Fund
when the opportunity arose and in accordance with the overall
policies of the Fund.
9.3 The Chair explained that he had attended company meetings and
asked questions on behalf of the LAPFF; however the LAPFF had
requested that he attended meetings in future on behalf of the
Greater Gwent (Torfaen) Pension Fund, as well as the
9.4 The DIIA stated that it was very valuable for the Fund to
evidence how it was engaging with companies regarding ESG
9.5 The Pensions Committee agreed:
For the Chair of the Committee to attend
such company meetings where required or where requested to in order
to represent the Fund and also on behalf of the LAPFF;
(ii)Where the Chair
does attend such meetings, he is authorised to vote on behalf of
the Fund provided that any such votes are consistent with the
Responsible Investing Policy framework of the Fund and is deemed to
be in the Fund’s best interests.
UK Stewardship Code and the LGPS / Cod Stiwardiaeth y DU a ChPLlL PDF 307 KB
10.1 The HoP highlighted the following
key headlines from the report:
Financial Reporting Council had published the updated UK
Stewardship Code, which would take effect from 1 January 2020. The
Code represented a new best practice standard for both asset owners
and asset managers alike.
key changes in the Code were outlined in paragraph 4.2 of the
Fund was aware that the Code was being changed and decided to wait
for the newer version before consideration was given to signing up
to it. The HoP added that guidance that
funds sign up to the Code was being led on a national
report recommended that this matter be referred to the Responsible
Investor Working Group (RIWG) for them to progress and report back
in due course.
10.2 The IIA left the meeting.
Members fully supported the prospect of the Fund
signing up to the Code and Cllr Bevan added that there were big
issues around climate change that required
10.4 The Pensions Committee agreed to note the content of the report
and refer this matter to the Responsible Investor Working Group for
them to progress and report back in due course.
Wales Pension Partnership; Joint Governance Committee Deputising Arrangements / Partneriaeth Pensiynau Cymru; Trefniadau Dirprwyo'r Cydbwyllgor Rheoli PDF 265 KB
HoP confirmed that Cllr Joanne Gauden
had previously been appointed to deputise for the Chair to attend
meetings of the Wales Pension Partnership Joint Governance
Committee (JGC), in the event that the Chair of Pensions was unable
to attend but considered it necessary for the Fund to be
represented at the JGC at elected member level. However, as Cllr
Gauden had stepped down from the Pensions Committee, due to her
being appointed to the Cabinet, the report recognised the current
11.2 The Pensions Committee agreed to note:
That there was a requirement to seek a
new member of the Pensions Committee as the Fund’s nominated
representative to deputise for the Chair to attend meetings of the
Wales Pension Partnership JGC in the event that the Chair of
Pensions was unable to attend but considers it necessary for the
Fund to be represented at the JGC at elected member
(ii)That the Chair
would consider this issue as required; and
That the Chair would inform the
Committee in due course of the deputising
Elected Members - Continuing Professional Development Update / Diweddariad Parhau Datblygiad Proffesiynol - Aelodau Etholedig PDF 281 KB
The HoP presented the
report and confirmed that it provided an update and drew attention
to forthcoming events.
Cllr Bevan stated that he would like to see more
training available regarding the new investment classes being
explored by the Fund, and officers agreed to consider this
12.3 The Pensions Committee agreed to note the training update
provided within the report.
Date of Next Meeting 9/3/20 / Dyddiad y Cyfarfod Nesaf 9/3/20
13.1 The next meeting is scheduled to take place on 9 March
Exclusion of Press and Public / Gwahardd y Wasg a'r Cyhoedd
To agree the exclusion of the press and public
from the meeting as presentations and meeting papers are not for
publication because in accordance with paragraphs 12 and 14 of part
4 of Schedule 12a of the Local Government Act 1972 (as amended by
the Access to Information Variation Order Wales 2007), it contains
information about a particular individual and information relating
to the financial and business affairs of particular persons
including the Council and in all the circumstances of the case the
public interest in maintaining the exemptions outweighs the public
interest in disclosing the information.
yw cyflwyniadau a phapurau
i'w cyhoeddi oherwyddyn
unol â pharag raffau 12 a 14 o
Ran 4 o Atodlen 12A Deddf Llywodraeth
Leol 1972 (fel y'i diwygiwyd gan
OrchymynMynediad i Wybodaeth
(Amrywiad) Cymru 2007), ei
cynnwys gwybodaeth am unigolyn
penod ol a
gwybodaeth ynymwneud â materion aria nnol a
busnes unigolion penodol
y Cyngor a than holl amgylchiadau'r
achos, maelles y cy hoedd o
ran sicrhau'r eithriadau yn
gorbwyso'r budd i'r cyhoedd yn nhermau datgelu'r
The Committee agreed to the exclusion of the press
and public from the meeting as presentations and meeting papers
were not for publication because in accordance with paragraphs 12
and 14 of part 4 of Schedule 12a of the Local Government Act 1972
(as amended by the Access to Information Variation Order Wales
2007), it contained information about a particular individual and
information relating to the financial and business affairs of
particular persons including the Council and in all the
circumstances of the case the public interest in maintaining the
exemptions outweighs the public interest in disclosing the
Cllr Jones invited the five members of the Pension
Board to remain in the public gallery.
Exempt Minutes 9/9/19 / Cofnodion Eithriedig 9/9/19
The exempt minutes of the meeting held on 9
September 2019 were confirmed as an accurate record.
Exempt Minutes of the Local Pension Board 23/10/19 / Cofnodion wedi eu Heithrio'r Bwrdd Pensiynau 23/10/19
16.1 The Committee noted the exempt minutes.
The HoP confirmed that
he would be retiring in June 2020 and that his post had been
advertised as a result.
16.3 The meeting ended at 12.15pm.