2002.S.F.19
THE FIFE COUNCIL - POLICY AND RESOURCES COMMITTEE - SUPERANNUATION
FUND SUB-COMMITTEE - GLENROTHES.
19th November, 2002
PRESENT:
10.00 a.m. - 12.30 p.m.
Councillors D. Edward (Chair), J.K. Bradie, W. Brand, M.F. Coyne,
E.E. Gunstone, S. Randall, R. Taylor and R. Young.
ATTENDING: Allan Traynor, Revenue Services Manager, Katrina Evans, Team Leader,
Finance & Asset Management Service, Morag Nicol, Benefits Assistant
ALSO
ATTENDING: Mr. John Williams and Mr. Richard Wyatt, Henderson Global Investors (for
Paras. 51 and 52), Ms. Lynn Ruddick and Mr. Nick Roberts, Merrill Lynch
Investment Managers (for Para. 53) and Mr. G. Singleton, Hymans
Robertson, Actuaries and Consultants (for Para. 54 only).
APOLOGIES
FOR ABSENCE: Councillor J. Cook.
Prior to the start of the meeting, the Chair welcomed Councillors S. Randall and R.
Taylor to their first meeting of the Sub-Committee.
46. MINUTE -
(morning only) and Karen Balfour, Treasury Officer (for afternoon only),
Finance & Asset Management Service; and Susan Gilbert, Committee
Administrator, Law and Administration Service.
The Minute of the Meeting of the Superannuation Fund Sub-Committee of 4th
September, 2002 was submitted.
Decision
(a)
(b) the Minute was noted; and with regard to Para. 39(d) - Superannuation Fund - Review Timetable - it was noted that a letter had been received from Hymans Robertson addressing members' concerns regarding the interview process for the appointment of
Custodians and Investment Managers and would be circulated to all members of the Sub-Committee, for information.
47. LOCAL GOVERNMENT (SCOTLAND) ACT 1973 -
Decision
The Sub-Committee resolved that under Section 50(A)(4) of the Local Government
(Scotland) Act 1973, the public be excluded from the meeting for the following items of business on the grounds that they involved the likely disclosure of exempt information as defined in Paragraph 6 of Part 1 of Schedule 7A to the Act.
48./
SUB-COMM/POLICY&RESOURCES SUB-COMM/SUPERANNUATION FUND OF 191102/LL

48.
2002.S.F.20
SUPERANNUATION FUND - UPDATED REVIEW TIMETABLE -
The Sub-Committee considered an updated review timetable for the appointment of
Custodians in 2002 and Investment Managers in 2002/03
Decision
Following considerable discussion, the Sub-Committee agreed:-
(a) to approve the updated review timetable outlining the appointment process for both Custodians and Managers; and
(b) that arrangements be made for members of the Sub-Committee to visit the offices of the newly appointed Custodians and Investment Managers at an appropriate date in 2003.
50.
49.
51./
(b)
SUPERANNUATION FUND - PORTFOLIO SCREENING -
The Committee considered a report dated 11th November, 2002 by the Head of
Finance & Asset Management regarding the manner in which Merrill Lynch
Investment Managers screened portfolios for political donations as part of the implementation of the Council’s policy on socially responsible investment.
Decision
The report was noted.
SUPERANNUATION FUND REVIEW -
(a) Performance Report - The Sub-Committee considered the Performance
Report prepared by the W.M. Company detailing quarterly returns for the period to 30th September, 2002.
Decision
The Sub-Committee noted the report.
Superannuation Fund Quarterly Review - The Sub-Committee considered a report dated 11th November, 2002 by the Head of Finance & Asset
Management summarising the performance of the Superannuation Fund for the period ended 30th September, 2002.
Decision
The Sub-Committee noted the continued significant downturn in markets in the first nine months of the year which were clearly having a detrimental impact on returns, with the result that the Fund continued to fall short of its prime objective of a real return of 5% over a five year rolling period, and that for the Fund as a whole, the returns achieved remained below the W.M. 2000
Universe over the five year rolling period with a return of - 1.1% against the
W.M. 2000 return of - 0.7%. It was noted that, after nine months of the year,
Merrill Lynch had maintained their out-performance over Hendersons, albeit by a minimal amount.

2002.S.F.21
51. INVESTMENT MANAGER'S REPORT AND FIFE EDUCATIONAL TRUST -
The Sub-Committee considered a report giving the valuation as at 30th September,
2002 of that portion of the Superannuation Fund and Fife Educational Trust managed by Henderson Global Investors. The reports were supplemented by a presentation from the Investment Managers.
52.
Decision
The reports were noted.
FIFE COMMON GOOD AND TRUST FUNDS AND ROSS BEQUEST -
The Sub-Committee considered a report prepared by Henderson Global Investors outlining the valuation of the Fund as at 30th September, 2002 for the Common Good and Trust Funds and the Ross Bequest.
53.
Decision
The report was noted.
INVESTMENT MANAGER'S REPORT -
The Sub-Committee considered a report giving the valuation as at 30th September,
2002 of that portion of the Superannuation Fund managed by Merrill Lynch
Investment Managers. The report was supplemented by a presentation from the
Investment Managers.
Decision
The report was noted.
The meeting adjourned at 12.30 p.m.
________________________________________
The meeting reconvened at 1.30 p.m.
PRESENT: Councillors D. Edward (Chair), J.K. Bradie, W. Brand, E.E. Gunstone and
S. Randall.
ATTENDING: Allan Traynor, Revenue Services Manager, Katrina Evans, Team Leader and Karen Balfour, Treasury Officer, Finance and Asset Management
Service; and Susan Gilbert, Committee Administrator, Law and
Administration Service.
ALSO
ATTENDING:
54./
Mr. G. Singleton, Hymans Robertson

54.
2002.S.F.22
MASTER CUSTODY SEARCH - FINAL REPORT -
The Sub-Committee considered a report dated November, 2002 by Mr. G. Singleton,
Hymans Robertson, summarising arrangements which had been made to advertise and interview for Custodians, and of the proposals which had been evaluated by
Hymans Robertson on the basis of service quality together with an estimate of the cost of providing Master Custody Services. Prior to the presentations being made by the two companies short-leeted for interview, he highlighted a number of points which had been taken into account when selecting the final short-leet.
There followed presentations by ABN Amro Mellon and Northern Trust.
Decision
Following discussion, the Sub-Committee agreed to recommend to the Head of
Finance & Asset Management that Northern Trust be appointed as Custodians.
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