Agenda item

Consideration was given to the report of the Corporate Director Resources which provided Members with information on the Local Government Pension Scheme (LGPS): Investment Reform Criteria recently published by the Government, which gave details of how LGPS funds would be expected to pool their investments (for copy see file of Minutes).

In discussing the report Councillor Davinson noted that some Authorities had already made progress towards formalising their arrangements with other authorities in advance of the 15 July 2016 deadline for submissions. Councillor Martin made the point that each scheme had different investment strategies and different risk appetites and at this stage it was difficult to appreciate how these would be managed in a pooled arrangement.  

Philip Williams confirmed that there were a number of uncertainties that the proposals did not address, including how Funds could work with others that had different strategies and profiles. For example it was not clear how this would affect Durham’s Dynamic Asset Allocation. The Fund’s decision to invest in global real estate had been prudent and had performed better than UK real estate. He considered that like-minded Funds should be able to collaborate irrespective of who they were pooled with.

Following a question from Councillor Davinson, Members were advised that it was expected that each Fund would have equal representation on a pool Board.

Reference was made to management costs by Councillor Kellett who was informed that where assets were internally managed, overall investment management costs should be reduced.   

Resolved:

That the Corporate Director Resources, in consultation with the Chairman and Vice-Chairman of the Committee, be authorised to provide an initial response to Government on which pool the Durham Pension Fund may be prepared to join, after taking appropriate advice.