The full agenda, reports and minutes of today’s Strathclyde Pension Fund Committee meeting provide more information on the topics below.
The Fund’s actuary has produced preliminary 2011 valuation results
The indicative total funding level as at 31 March 2011 was 97.3% (assets as a % of liabilities).
The preliminary results indicate that the common employer contribution rate will be 19.3% (of pensionable payroll) from 1st April 2012 for 3 years.
This is a very good outcome but it should be noted that the funding position has deteriorated since the valuation date. The change from RPI to CPI as the basis of pensions increase made a significant positive contribution to the funding level. The change was judged lawful by the High court but may still be referred to the Court of Appeal.
The Fund has almost completed its review of its unconstrained global equity investment strategy. A mini-competition to select managers from Lazard, Walter Scott (BNY Mellon), Veritas, Oldfield, M & G and Edinburgh Partners will be run in January 2012. Funding of the new mandates should take place in quarter 2 2012.
GES Investment Services have been awarded the contract to provide a responsible investment engagement overlay service.
The Committee received a briefing on the “reference scheme” for public sector pensions.
The Fund’s return for the quarter to 30 September 2011 was -9.4%. The average UK pension fund returned -5.4% for the quarter (as measured by the WM All Funds Universe), and the FTSE World Index returned -14.7%.
The Fund’s value at 30 September 2011 stood at £10,234m. As at 31st October 2011 total asset value for the Fund had risen slightly to £10,695m.