Agenda item

5.1  Rachel Cowburn introduced the report providing anupdate on the key quarterly performance measures including the funding position, fund governance, investment performance, responsible investment, budget monitoring, administration performance and reporting of breaches.

5.2  The Chair advised that an exercise on the layout of information was being undertaken in the coming weeks and indicated that Members should send their comments to Ms Cowburn. Ms Cowburn explained that officers were reviewing the report to include more useful information and presentation of information.  Councillor Rennison indicated that the information available in the current report was easy to understand and would like this layout to remain unchanged.

5.3  Councillor Rennison enquired about cash gaps. Mr Johnston explained that the Fund’s liabilities were sensitive to interest rates and as gilt yields got lower liabilities would increase.  This was partially driven by concerns around Brexit and other factors.  Members were referred to page 30 of the report detailing the impact of gilts movements and funding levels.

5.4  Councillor Adams enquired about the impact of Brexit on gilts.  Mr Johnston stated that the more likelihood of uncertainty in the UK economy would result in continued lower interest rates and any future investment in gilts would need to be considered as a long term investment. The Committee would be receiving information on gilts as part of the investment strategy at a future meeting. 

5.5  Councillor Desmond referred to LCIV fund’s performance at 13.3% over three months.  Mr Johnston stated that the increase had been occurred over three months and had resulted from its asset allocation, world equity mandate, becoming an asset leader.

5.6  Councillor Rennison queried if there was a set threshold that the Fund’s funding level could not to fall below.  Ms Cowburn stated that if an estimated funding level significantly dropped there was provision for the government to review how the Fund had carried out its valuation including types of assumptions.  Further, a Fund’s deficit recovery plan and contribution rate could be challenged if the plan did not repay the deficit. 

 RESOLVED to note the report.