1. WELCOME TO: HERTFORDSHIRE LGPS EMPLOYERS MEETING Hertfordshire County Council www.hertsdirect.org

2. OVERVIEW OF PENSION FUND ACTIVITY Chris Sweeney Director of Finance, Information & Commercial Services Hertfordshire County Council www.hertsdirect.org

3. Agenda  Review of the Year Membership Statistics Accounts Investments AVCs  Looking to the Future Investments Cost Sharing Administration Scrutiny

4. Review of the Year Membership Statistics – Employees Active members28,042 Deferred Members22,096 Pensioners21,003 71,141

5. Review of the Year Membership Statistics – Employers County / District Councils 11 Parish / Town Councils 37 Scheduled Bodies 9 Foundation Schools 40 Contractors 31 Other Bodies 66 Total194

6. Review of the Year Accounts 2007/082008/09 to 31/12/08 Contributions in£138m£103m Benefits Paid & Expenses£103m£80m Net Investment Income£78m£55m Value of the Fund£2,066m£1,728m

7. Review of the Year Investments – Allocation at 31 st December 2008

8. Review of the Year Economic Headlines  Interest rates all time low  Technical recession  Unemployment 6.3%  Taxpayers underwriting banks bad debts  FTSE All share down 29.9% in 2008

9. Review of the Year Impact on Investments 2008: minus 23.9% Held: Lehman Brothers, AIG, RBS Avoided: Hedge Funds, Madoff

10. Review of the Year Standard Life AVCs  Reduction in value of Pension Sterling Fund  Subsequent reversal of decision Clear information on investment decisions needed plus recommend financial advice

11. Looking to the Future Investments - Long Term View  Not the time to sell  Fund Managers being cautious  Restructured fund management in May  5 year average performance still positive: + 4.0% per annum

12. Looking to the Future Investments – Impact on Contributions  Funding level: 200785% now55%  Next valuation 2010  Contributions fixed until 31 st March 2012

13. Looking to the Future Cost Sharing  Set out in new 2008 scheme  To be implemented – 2010 valuation  Aim is for employees and employers to share future cost increases Employee contribution or benefits  Use national model fund – Data Quality Letter

14. Looking to the Future Administration HCC and Serco working together  Scheme Booklets  Newsletters / Bulletins  Improvement Agenda

15. Looking to the Future Scrutiny of Public Sector Schemes  Loss of private sector final salary schemes  Pressure from taxpayers  Other public sector schemes unfunded

16. Management Changes Director of Finance to be replaced by Director of Resources and Performance