Agenda item

The Committee gave consideration to the report of Debbie Ford and the Draft Investment Strategy Statement (ISS).  This Statement is required by regulations and requires an administering authority, after taking proper advice to formulate an ISS which must be produced in accordance with guidance issued by the Secretary of State.

The ISS at Appendix 1 of the report sets out the London Borough of Havering’s policies, in its capacity as Administering Authority, for the investments of the Borough’s Pension Fund.

The authority will publish the final ISS no later than 1^st April, 2017. This will be the first ISS published under the new regulations.  It sets out how investments will be made and assumes 4% growth.

It was noted that the ISS must include certain information as set out at paragraph 1.7 of the report and in line with regulations the authority must consult on the content of the Investment Strategy.  The draft ISS was distributed to all employers, the actuary, the Local Pension Board and Fund Managers in accordance with these regulations. No comments were received from the consultees.

The Committee noted the statement of compliance which demonstrates the Fund’s performance against the six Myners principles.  The principles were reviewed in accordance with the CIPFA guidance to show that the Fund is compliant but needs to consider further, Principle 5 - Responsible Ownership.

That is “Administering Authorities should recognise and ensure that their partners in the investment chain adopt the FRC’s UK Stewardship Code.”

It was indicated by Ms Ford that most investment decisions are now delegated to the Fund Manager and the authority are encouraged to sign up to the code and be more collaborative in approach.

The Pension Committee will be asked in the future to consider their membership of the Local Authority Pension Fund Forum (LAPFF) and the Pensions and Lifetime Savings Association (PSLA).  The LAPFF have indicated that a representative would be able to attend and deliver a presentation at a future Committee meeting. Members believed that would be helpful and look forward to receiving the report at the next meeting.

The Committee noted that the Fund has joined the London CIV with approximately 40% of the fund involved.  At present the CIV are not able to offer an infrastructure product but members are free to invest as they wish. Further focus is on bonds which will be considered in detail by the Bond Manager.  Any further matters will be brought back to Committee for decision.  The Global Equity Sub Fund has been developed which may become a future option.  Some money is held by managers which allows for investment as and when productive offers and schemes come up.

The Pension Committee:

·       Adopted the proposed Investment Strategy Statement as set out at Appendix A.

·       Agreed the administrative Authority’s position in respect of reporting compliance against the Myners investment principles as set out in Appendix D; and

·       Agreed to receive a further report and consider whether it is interested in becoming members of LAPFF and PLSA.