Agenda and minutes

14.1     The Committee agreed that the minutes were a correct record of the meeting held on 17 July 2017.

15.1     Apologies for absence were received from Cllr Stuart Earl.

Disclosures by all Members present of personal interests in matters on the agenda, the nature of any interest and whether the Members regard the interest as prejudicial under the terms of the Code of Conduct.

16.1     Cllr Richard Stogdon declared a personal, non-prejudicial, interest as the trustee of a private Trust fund managed by Ruffer.

Notification of items which the Chair considers to be urgent and proposes to take at the appropriate part of the agenda.

17.1     There were no urgent items.

18.1     The Committee considered the draft minutes of the Pension Board meeting held on 3 August 2017.

18.2     The Committee RESOLVED to note the draft minutes.

19.1     The Committee considered a report regarding a petition proposing that East Sussex Pension Fund (ESPF) disinvest from fossil fuels.

19.2     Julia Hilton attended the meeting on behalf of the lead petitioner and spoke in support of the petition.

19.3     The Committee RESOLVED to note the content of the petition.

20.1     The Committee considered a presentation by the Environment Agency Pension Fund’s Chief Responsible Investment and Risk Officer, titled Addressing Climate Change.

20.2     The Committee RESOLVED to note the presentation.

21.1     The Committee considered a report on Environmental, Social and Governance (ESG) issues based on research by the Fund’s Investment Adviser, Hymans Robertson.

21.2     The Committee RESOLVED to:

1) include within  the Pension Fund Investment Beliefs,  the following statements relating to  ESG investment subject to refinement from Hymans Robertson:

·         Climate change presents a financial risk to the future investment returns from the Fund.

·          Close engagement with - and challenge to - the investment managers will improve understanding of these risks.

·          Individual stock selection decisions will be delegated to active managers but the Fund will retain the right to sell holdings in exceptional circumstances.

·         The Fund will aim to collaborate with other investors where this is expected to have a positive impact

·         The nature of the underlying benchmark is an important consideration, most notably for passive mandates.

2) agree that the East Sussex Pension Fund should sign up to the UK Stewardship Code; and

3) request an analysis of the Fund’s exposure to carbon risk within its equity holdings.

4) request that Hymans Robertson provide a report on whether there is a viable low carbon equity fund that could achieve the same or better rate of return compared to other passively managed equity funds.

22.1     The Committee considered a report by Hymans Robertson on the performance of fund managers during the second quarter of 2017.

22.2     The Committee RESOLVED to agree to rebalance holdings with the transfer of funds from global equity holdings to absolute return holdings within the agreed tolerance range.

23.1     The Committee considered a presentation by Ruffer LLP their fund performance.

24.1     The Committee considered a report on the performance of Business Operations.

24.2     The Committee RESOLVED to:

1) Note the report; and

2) approve the expenditure of £5,000 for the annual use of a monthly mortality screening service.

3) request that a briefing is circulated on the implementation of online Annual Benefit Statements.

25.1     The Committee considered a report on the timetable for procuring a system to deliver administration on behalf of the East Sussex Pension Fund.

25.2     The Committee RESOLVED to request an additional report detailing the procurement process including the options appraisal of services offered by other administration system providers.

26.1     The Committee considered an update on local government pension scheme pooling.

26.2     The Committee RESOLVED to note the report.

27.1     The Committee considered a report on Markets in Financial Instruments Directive (MiFID II).

27.2     The Committee RESOLVED to:

1.    Note the potential impact on investment strategy of becoming a retail client with effect from 3rd January 2018;

2.    agree to the immediate commencement of applications for elected professional client status with all relevant institutions in order to ensure it can continue to implement an effective investment strategy;

3.    acknowledge and agree to forgo the protections available to retail clients attached as Appendix 1; and

4.    agree to approve delegated responsibility to the Chief Finance Officer in consultation with the Chair for the purposes of completing the applications and achieving elective professional status for the Fund with effect from 3 January 2018.

28.1     The Committee considered a general update report.

28.2     The Committee RESOLVED to note the report.

29.1     The Committee considered its forward plan.

29.2     The Committee RESOLVED to note the report.