Issue - meetings

The item was introduced by Chris Norton (Head of Investments, Audit and Risk), who explained the deadline for submissions to the government consultation on the future of the LGPS, with a focus on pooling of investment management, had been the previous week. A report considering Warwickshire’s response to the consultation had been discussed at the Pension Fund Investment Sub-Committee in December. The Sub-Committee had also considered the draft response, which was included in the agenda pack for the Board meeting. The final response had been amended slightly following the Sub-Committee meetings, and had a focus on ensuring minimum standards for pooling across all of the LGPS; the scheme’s governance; and how the government might use the LGPS to support the UK economy by using it to fund investments. Members were reminded the Warwickshire Pension Fund was part of the Border to Coast pool, which was performing well. Chris Norton said many of the proposals in the consultation were things that Border to Coast was doing already through its strategic plan and investment implementation plan. However there were also proposals for pools to manage the strategic asset allocation on behalf of the pension funds that made up the pools, and for them to be the primary investment advisors to the funds. Chris Norton said it was the Warwickshire Fund’s view that the strategic asset allocation should remain the responsibility of the individual funds, and there was the potential risk of conflicts of interest arising if pools also became the primary investment advisors.

Mike Snow said he agreed with the Fund’s response, and said the priority for the Fund should continue to be paying members’ liabilities.

Responding to a question from Beverley Farmery, Chris Norton said the individual LGPS members and fund managers had been responding and there had been joint submissions from the pools. He said it was felt the Warwickshire Fund’s response was pragmatic and had attempted to give helpful feedback.

Councillor Ian Shenton said he had concerns that individual funds might be forced into a position to take a particular investment route, which may not be in the best interests of that fund. He said Warwickshire’s response was balanced and he was in agreement with it.

The Chair said he was in agreement with the Fund’s response, and stated his belief it was better for the Fund to be in less well performing shares in the right market than in better performing shares in the wrong market. He said greater consideration should be given to making local investments, but urged caution based off his personal experience.

Rob Powell (Executive Director for Resources) stated he agreed with the Chair’s summary that the government's direction appeared to be locked in and driven by the Treasury. He said the consultation questions were framed in a way that meant responders had to express if they agreed the government was correct in what it was proposing.He added that the Warwickshire Fund’s response expressed some concerns about how the devolution White Paper and the  ...  view the full minutes text for item 2