Issue - meetings

Purpose:  To update Committee Members on the progress of the funding position and liability hedging undertaken as part of the Flight Path strategy for managing liability risks.

(a)  The Committee noted the updated funding position (on assumptions consistent with the 2016 valuation) and hedging position for the Fund and the progress being made on the various elements of the Risk Management Framework.

(b)  The Committee noted that Insight have implemented the collateral waterfall process previously agreed with the Officers and their advisors. It has also been agreed that c. £30m will be removed from the Insight QIAIF to be invested in infrastructure as directed in due course.

(c)  The Committee noted that any currency risk associated with the market value of the synthetic equity portfolio with the Flightpath strategy has now been hedged.

This item of the agenda also went straight to questions and Mr Hibbert referred to Mercer’s document on equity protection, specifically collateral risk monitoring. He thought that a lot of the information was new, with reference to topics that he was not aware of. Mr Middleman confirmed that this is the more detailed quarterly report which has a lot more monitoring information in it than the usual monthly report. The information includes some areas that have been highlighted for future Committee training e.g. the detail on the collateral waterfall as it will take some time to get the committee fully up to speed with this.   Mr Middleman confirmed this will be picked up in a future training session.

RESOLVED:

(a)  The Committee noted the updated funding position (on assumptions consistent with the 2016 valuation) and hedging position for the Fund and the progress being made on the various elements of the Risk Management Framework.

(b)  The Committee noted that Insight have implemented the collateral waterfall process previously agreed with the Officers and their advisors. It has also been agreed that c. £30m will be removed from the Insight QIAIF to be invested in infrastructure as directed in due course.

(c)  The Committee noted that any currency risk associated with the market value of the synthetic equity portfolio with the Flightpath strategy has now been hedged.