Investments
Statement of Investment Principles
Pension funds are required to prepare and maintain a written Statement of Investment Principles (a SIP) that sets out the decisions that have been taken on a fund's investment policies.
The SIP is intended to provide evidence that administering authorities have considered the suitability of their fund's investment policy and the approach to implementing the policy.
The Regulations that govern the Local Government Pension Scheme require our SIP to cover the policy on the following areas:
- Types of investments to be held
- Balance between different types of investments
- Risk, including the ways in which risks are to be measured and managed
- Expected returns on investments
- Realisation of investments
- Extent (if at all) to which social, environmental or ethical considerations are taken into account in the selection, retention and realisation of investments
- Exercise of the rights (including voting rights) attaching to investments, if there is such a policy
- Stock lending
- Extent to which the administering authority complies with guidance given by CLG (in relation to the Investment Principles), and, to the extent the authority does not comply, the reasons for not complying
- Exercise of any discretion by the administering authority to increase the limits on various types of investment.
The Investment Principles referred to in the penultimate bullet point cover:
- Effective decision making
- Clear objectives
- Risks and liabilities
- Performance Assessment
- Responsible ownership
- Transparency and reporting.
The latest version of the SIP was approved from 2 June 2011.
View the Pension Fund's Statement of Investment Principles[pdf - 81kb]
Corporate Governance Policy
The Pension Fund's Statement of Investment Principles covers the extent to which social, environmental or ethical considerations are taken into account in the selection, retention and realisation of investments. Further details of the Fund's approach to these areas is covered in the Corporate Governance Policy.
The Corporate Governance Policy requires that each manager must:
- develop and co-ordinate policies on corporate governance and voting
- when buying and selling investments, take into account how social, environmental and ethical factors might affect their value
- for each company in which they invest, review that company's approach to social, environmental, and ethical actors and where necessary, approach company management to seek improvements.
The Pension Fund's policy on Corporate Governance is formally reviewed and approved on an annual basis. The current policy was adopted by Pensions Committee on 2 June 2011.
View the Corporate Governance Policy[pdf - 28kb]
Corporate Governance is an important issue and the Pensions Committee takes its responsibility in this area very seriously. Investment managers are required to report on the implementation of this policy on a quarterly basis and it is on the agenda for meetings with investment managers.
The Pension Fund's policy takes into account the UK Stewardship Code that has been prepared by the Financial Reporting Council. Investors are encouraged to report their compliance with the Code. The Pension Fund has set out its position in a statement.
View the UK Stewardship Code Compliance Statement[pdf - 29kb]
