Leicestershire County Council Pension Fund

Annual General Meeting

Brian RobertsDirector of Corporate Resources

Scheme Administration

Large increase in number of scheme employers as schools convert to Academies

Significant decrease in active members Importance of accurate and timely data to be

provided by employers Monthly electronic returns been developed

with employers help Increasing reliance as new scheme beckons

Scheme Administration

Improvements and developments Website accredited by the plain english

campaign Member on line services to be introduced this

year Improved reporting features to be developed

to help data quality

Pension Reform – LGPS 2014

Consultation document issued 21 December. Closes 8th February 2013 This covers membership, contributions and

benefits. Further consultation to follow on the

remaining items of new scheme, plus cost control, governance and councillors’ pensions etc.

Investments

Considerable efforts have been made to diversify types of asset held over recent years, without impacting on long-term returns

Appointments since the end of 2011/12 year end have ‘completed’ the work in progress

A period of relative stability in terms of investment portfolios is now expected

But manager underperformance will still have to be dealt with!

Asset types held by the Fund

UK equities Overseas equities Property Targeted return Global index-linked bonds Private equity Commodities Global Credit Managed Futures Infrastructure Timberland Currency

Strategic Asset Allocation

Developed Market Equities 35-46%

Emerging Market Equities 6-10%

Private Equity 4%

Alternative Assets 20-30%(including targeted return, global credit and special opportunities)

Inflation-Linked 5-10%(including global index-linked bonds, infrastructure and timberland)

Property 12.5%

Commodities 2.5-5%

Investment returns 2011/12

Fund return +0.7% Market returns variable, for example;- UK equities +1.4%- European equities -11.4%- UK Property +6.6%- UK Index-Linked +18.1%- UK Government Bonds +14.5%

LOW RISK ASSETS GENERALLY PERFORMED BEST

Medium-term investment returns

Over 5 years, the Fund’s return has been +0.4% p.a. 0.8% below benchmark, due mainly to manager

underperformance within markets Manager underperformance has brought a number

of dismissals Return is well below that anticipated by the actuarial

valuation (mainly because equity markets have performed poorly over this period)

This puts upward pressure onto employer’s contribution rates

Returns since year end

Equity markets were sharply down until mid-June, mainly on fears about Europe

Significant recovery since the low point Returns from low point to end-of-December

have been good But still the return for the 9 months is only

around 5%

Outlook for actuarial valuation

Still likely to be upward pressure on employer’s contribution rates

New slightly cheaper 2014 scheme is unlikely to change this

But there has been a big improvement since the position at the end of June

Still almost 3 months to go before valuation date, and things can change significantly over this timescale

Annual General Meeting

Any questions ?