Agenda and minutes

To receive any apologies for absence.

Cllrs Barnes-Andrews, Dowden, Joy and Taylor sent their apologies

All Members who believe they have a Disclosable Pecuniary Interest in any matter to be considered at the meeting must declare that interest and, having regard to Part 3 Paragraph 1.5 of the County Council's Members’ Code of Conduct, leave the meeting while the matter is discussed, save for exercising any right to speak in accordance with Paragraph 1.6 of the Code.  Furthermore all Members with a Personal Interest in a matter being considered at the meeting should consider, having regard to Part 5, Paragraph 4 of the Code, whether such interest should be declared, and having regard to Part 5, Paragraph 5 of the Code, consider whether it is appropriate to leave the meeting while the matter is discussed, save for exercising any right to speak in accordance with the Code.

Members were mindful that where they believed they had a Disclosable Pecuniary Interest in any matter considered at the meeting they must declare that interest at the time of the relevant debate and, having regard to the circumstances described in Part 3 Paragraph 1.5 of the County Council's Members' Code of Conduct, leave the meeting while the matter was discussed, save for exercising any right to speak in accordance with Paragraph 1.6 of the Code. Furthermore Members were mindful that where they believed they had a Personal interest in a matter being considered at the meeting they considered whether such interest should be declared, and having regard to Part 5, Paragraph 4 of the Code, considered whether it was appropriate to leave the meeting whilst the matter was discussed, save for exercising any right to speak in accordance with the Code.

To confirm the Minutes of the meeting held on 25 September 2020.

The minutes of the Pension Fund Panel and Board held on 25 September 2020 were confirmed.

To receive any deputations notified under Standing Order 12.

The Panel and Board received a deputation from Mr James Miller the group co-ordinator of Winchester Extinction Rebellion and representing the Dirty Money Campaign Group, which includes Hampshire pension scheme members. Mr Miller said he expected the Hampshire Pension Fund to use the power of pension assets to cut the global carbon footprint and secure against stranded assets.

Mr Miller noted that the Pension Fund Annual Report shows that the Hampshire Pension Fund has begun to make progress in moving its global passive equities to a Climate Aware fund, and the subsequent use of a consultant to report on the Fund’s investment managers’ management of Environmental Social and Governance issues; but it is unacceptable that this report has not been made available to pension scheme members or the public. The Pension Fund’s Annual Report should include a clear climate position statement and should develop its reporting in line with the Taskforce for Climate Related Financial Disclosures.

Mr Miller stated that there is no reason to believe that excluding fossil fuel investments damages financial performance. There are numerous examples of pension funds transitioning towards sustainable investments, such as the Net Zero Asset Owners Alliance.

Mr Miller highlighted that in 2019 Mark Carney warned that the global financial system is financing industries that could generate a 4 degree climate increase. This would leave vast reserves of fossil fuels unburnable, therefore disinvestment is not only financially prudent but a moral imperative.

Mr Miller stated that Hampshire Pension has a duty to play its role in the Climate Change crisis. The Dirty Money Campaign calls on the Hampshire Pension Fund to;

Produce a position statement on managing its portfolios in line with the Paris Agreement and a maximum 1.5 degree climate increase.

Create a strategy and timeline to achieve this.

Report in plain English with scheme members, and consult with and be advised by scheme members on the Pension Fund’s Statement of Investment Principles.

Call on all members of the ACCESS pool to become members of the Net Zero Asset Owners Alliance.

Finally Mr Miller warned that in Australia, a pension scheme member had brought a lawsuit against their pension fund for failing to act on climate related financial risks. Hampshire Pension Fund and the wider ACCESS pool would do well to anticipate a similar case.

Cllr Kemp-Gee thanked Mr Miller for his deputation.

To receive any announcements the Chairman may wish to make

The Chairman congratulated the Deputy Chief Executive on the smooth running of the Pension Fund’s first virtual annual employers meeting and reminded the members that they have been sent a link to watch the recording if they wish.

The Chairman reminded members that the Panel and Board’s first virtual internal training session will be held on 9 December 2020. The Chairmen invited the committee members to highlight any virtual training sessions that they had attended. 

Cllr Gibson commented on the quality of SPS’s virtual conferences. 

Cllr Tennent had attended the monthly LGPS Live events.

Cllr Glen had attended a number of virtual events, of which he was particularly impressed with those provided by JP Morgan.

To consider the minutes of the Pension Fund Responsible Investment Sub-Committee held on 20 October 2020.

The minutes of the Responsible Investment Sub-Committee held on 20 October 2020 were noted.

To consider a report from the Director of Corporate Services-Corporate Resources updating the Pension Fund Panel and Board on the impact of the new Restriction of Public Sector Exit Payments Regulations 2020 on administrative processes for Pension Services and Scheme Employers.

The Panel and Board noted a report of the Deputy Chief Executive and Director of Corporate Resources (item 7 in the Minute Book) updating the Pension Fund Panel and Board on the impact of the new Restriction of Public Sector Exit Payments Regulations 2020 on administrative processes for Pension Services and Scheme Employers. The new regulations came into force on 4 November 2020 and limit the total amount payable by the employer for the exit of an employee on redundancy or business efficiency grounds to £95,000. Until such time as the amended LGPS regulations are in force, there is a potential conflict between the exit payment regulations which limit the total amount an employer can pay for an exit and the LGPS regulations which entitle members to an unreduced pension for which the employer must pay a strain charge.

            There has been different advice received from the government minister, Luke Hall, and the Scheme Advisory Board (SAB) about how LGPS funds should administer redundancy and efficiency retirements in this interim period. Therefore Hampshire has joined the other administering authorities in the Access Pool to directly commission advice from Squire Patton Boggs (SPG) as to how to proceed in this interim period. On receipt of the legal advice from SPG, the Director of Corporate Resources will implement the least risk approach for the interim period for the Fund. A further update will be provided to the Panel and Board at their meeting in December 2020.

That in relation to the following items the press and public be excluded from the meeting, as it is likely, in view of the nature of the business to be transacted or the nature of proceedings, that if a member of the public were present during the items there would be disclosure to them of exempt information within Paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972, and further that in all circumstances of the case, the public interest in maintaining the exempt information outweighs the public interest in disclosing the information, for the reasons set out in the report.

RESOLVED:

That the public be excluded from the meeting during the following items of business, as it is likely, in view of the nature of the business to be transacted or the nature of the proceedings, that if members of the public were present during these items there would be disclosure to them of exempt information within Paragraphs 3 and 5 of Part 1 of Schedule 12A to the Local Government Act 1972, and further that in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information, for the reasons set out in the reports. 

Following the resolution the Chairman asked for the broadcasting of the meeting to end.

To confirm the exempt minutes of the meeting held on 25 September 2020.

The exempt minutes of the Pension Fund Panel and Board held on 25 September 2020 were confirmed.

To consider the exempt minutes of the Pension Fund Responsible Investment Sub-Committee held on 20 October 2020.

The exempt minutes of the Responsible Investment Sub-Committee held on 20 October 2020 were noted.

To consider an exempt report from the Director of Corporate Services-Corporate Resources proposing a change to the Pension Fund’s investment in Baillie Gifford’s Global Alpha global equities portfolio, following the recommendation of the Pension Fund’s Responsible Investment Sub-committee.

The Panel and Board received an exempt report from the report of the Deputy Chief Executive and Director of Corporate Resources (Item 11 in the Minute Book) on Baillie Gifford’s Global Alpha portfolio.  [SUMMARY OF A MINUTE WHICH CONTAINS EXEMPT INFORMATION]

To consider the exempt report of the Director of Corporate Resources - Corporate Services updating the Panel and Board on the Pension Fund’s investments since the last meeting of the Pension Fund Panel and Board on 25 September 2020.

The Panel and Board received an exempt report from the report of the Deputy Chief Executive and Director of Corporate Resources (Item 12 in the Minute Book) updating the Panel and Board on the performance of the Pension Fund’s investments.  [SUMMARY OF A MINUTE WHICH CONTAINS EXEMPT INFORMATION]