1. Annual General Meeting Chris Tambini Assistant Director, Ian Howe Pensions Manager, Colin Pratt Investment Manager

2.  The career average revalued earnings (CARE) scheme implemented from 1 April 2014  On-line system implemented  New pension administration system implemented

3.  New 2014 career average revalued earnings “CARE” scheme implemented – aggregation rules still outstanding  Members feedback – satisfaction score of 96% who rated service as good or excellent  Benchmarking  LCC cost £18.24 per member  Local Authority average £26.62 per member

4.  Auto enrolment completed for the larger fund employers and well underway for the smaller employers  Employer numbers continue to rise (now over 200 employers with active contributors)  New on line service fully implemented with our partner Hymans delivering savings in printing and postage

5.  On line service is instrumental in scheme communications to scheme members  Members are able to see personalised impact of different variables under the new scheme e.g. retirement age, bigger lump sum and their annual benefit statement at March 2014  New pension administration system implemented  Benefits are now more complex, final salary link to pre April 2014 benefits and CARE benefits from April 2014

6.  Communication exercise with employers has started and will continue  Additional requirements introduced by new scheme  Co-operation is needed with monthly and year end reporting

7.  Consultation launched in June 2013  Public Sector Pensions Act 2013 (which covers all Public Sector Schemes, not just LGPS) includes greater emphasis on governance arrangements  Local Pension Board to be in place from April 2015 (to assist the Scheme Manager)  Pension Board to include 50% staff representation  Members have to have a certain levels of knowledge and competence

8.  Regulations not yet finalised, although consultation exercises mean that their content is clear  Consultation and draft regulations have been issued incredibly late, given the immovable date of 1 st April 2015 to have a Local Pension Board in place  Leicestershire Board will have three member representatives and three employer representatives  Elections of member representatives will take place at today’s meeting

9.  One currency mandate terminated during year, but one remains in place  Asset allocation mandate terminated during year  January 2014 Annual Strategy Meeting agreed to ask Investment Subcommittee to consider the merits of investing in direct lending and emerging market debt  Portfolios for these assets implemented during 2014/15 and currently partially funded

10.  Fund’s sources of return are relatively well diversified, but equities remain the dominant asset class  Underperformance of benchmark by 1.5% in 2013/14 (3.9% vs. 5.4%), due to the underperformance of a number of individual managers  So far, returns (relative to benchmark) have been much better in 2014/15. Some of last year’s underperformers have produced very good returns this year  Annual returns over 5 years are in-line with benchmark and well above long-term assumptions

11.  Aspect Capital have produced a return of c.40% in the nine months  Millennium have earned £15m from currency management  Differentiation within markets – UK equities +2%, NA equities +18%, European equities – 3%, Emerging Market equities – 2%  Currency does matter – US$ + 7%, Euro – 6%, Yen – 8% (all relative to sterling). Fund has hedged euro and yen exposure, but remains fully exposed to US$.  Despite recent wobbles, Fund size up c.£150m in 9 months, despite £50m payment out in respect of Probation

12.  Launched in late June 2013, responses required by late September  Initial response from the Government is to encourage collaboration between funds, rather than go ahead with forced mergers  Possibility of the formation of Collective Investment Vehicles into which individual funds could invest. Particular prominence given to encouragement of more use of the passive (indexed) management for listed assets

13.  Leicestershire’s response was anti-forced merger but in favour of greater levels of collaboration between Funds, which is capable of producing savings  Current Government thinking appears muddled and there are a number of practical issues that might make Collective Investment Vehicles unworkable, or at least less-than-optimal  Mergers are NOT off the agenda, but appear to have slipped down the list of priorities for Central Government

14.  Aggregation rules to be clarified  Future governance structure has to be in place by April 2015 to satisfy Public Sector Pensions Act  Member training ahead of new governance structure will be a priority  Investment management arrangements will be kept under review, with the Investment Subcommittee remaining pro-active  Expectation that investment markets will be volatile

15. Any Questions?