Treasury and Resources
Ministerial Decision Report
PRESENTATION OF REVISED STATES INVESTMENT STRATEGIES
1. Purpose of Report
For the Minister of Treasury and Resources to consider proposed amendments to the existing Investment Strategies for States Funds as well as adopting some new Investment Strategies..
2. Background
Based upon a recommendation from the Treasury Investment Sub-Committee in its advisory capacity, the Minister is requested to consider the amending the existing Investment Strategies published on 7th July 2009 (MD-TR-2009-0117). In addition a number of new Investment Strategies have been prepared for some of the Special and Trust & Bequest Funds.
This report also provides Investment Strategies for the States of Jersey – Common Investment Fund which the States agreed in 2010 (P.35/2010).
The States Investment Strategies are presented in accordance with the terms of the Public Finances (Jersey) Law 2005 (Article 6) (the Finance Law) and Public Finances (Transitional Provisions) (no.2) Jersey Regulations 2005 (Regulation 4), which require the Minister for Treasury and Resources to present his investment strategies for States funds.
3. Proposed Investment Strategies
The reason for the change in Investment Strategies for States funds is based upon a recommendation from the Treasury Investment Sub-Committee, in its advisory capacity. This is as a result of the Annual Strategy review meeting held on 29th March 2010 coupled with a decision to implement the States of Jersey – Common Investment Fund (Legislation approved by the States under proposition P35/2010 on 11 May 2010.)
The main changes from the current Investment Strategies are as follows:- (See Appendix A for the revised Investment Strategy)
· Creation of an Investment Strategy for the States of Jersey – Common Investment Fund and its Investment Pools.
· Amendments to States major Funds Investment Strategies:-
Ø Strategic Reserve Fund, Stabilisation Fund and Consolidated Funds – Inclusion of a new section under Investment Structure stating that the Funds intend to invest in the States of Jersey – Common Investment Fund once it is operational. This section further provides details of the investment pools they intend to acquire units in.
Ø Social Security (Reserve) Fund – incorporation of the revised Investment Strategy published under Ministerial Decision MD-TR-2009-0194 dated 9 December 2009. The Investment Strategy also includes a note on the Fund’s intention to invest half of its equity assets in the States of Jersey Common Investment Fund equity pools.
Ø Health Insurance Fund – creation of a new Investment Strategy for the Fund. The Strategy also includes the Fund’s intention to invest in the States of Jersey – Common Investment Fund and details the investment pools the Fund intends to acquire units in.
Ø Currency Notes and Coins Fund – Investment Strategy is amended with the intention that it will invest in the States of Jersey – Common Investment Fund. This Strategy also includes details of the investment pools the Fund intends to acquire units in.
· Amendments to Pension Funds Investment Strategies are as follows:-
Ø Public Employees Contributory Retirement Scheme (PECRS) – incorporation of the revised Investment Strategy published under Ministerial Decision MD-TR-2010-0052 dated 22 March 2010. The Strategy also includes the introduction of strategic ranges against the long term asset allocation strategy for the Fund.
Ø Jersey Teachers’ Superannuation Fund (JTSF) – this includes the introduction of strategic ranges against the long term asset allocation strategy for the Fund. Further, reference is made to the fact that the Strategy does not take account of the future contributions which will be received from the States to cover increases to pensions in payments which have been recently added to the Scheme liabilities.
· Creation of new Investment Strategies for Trust and Bequest Funds: Estate of AA Rayner Fund; The Rivington Travelling Scholarship; Estate of H E Les Seelleur; Estate of E J Bailhache; Le Don de Faye Trust Fund; Greville Bathe Fund and Estate of A H Ferguson Bequest. These have been designed with the intention of these Funds investing in the States of Jersey – Common Investment Fund.
· Creation of new Investment Strategies for Special Funds: Tourism Development Fund; Channel Islands Lottery (Jersey) Fund and Dwelling-Houses Loan Fund. These have been designed with the intention of these Funds investing in the States of Jersey – Common Investment Fund.
The Treasury and Resources Minister has consulted with the Minister for Social Security concerning the Investment Strategies for the Social Security (Reserve) Fund and the Health Insurance Fund.
The decision has been made based upon the Treasury and Resources Minister taking appropriate investment advice from the Investment Sub-Committee and the States Investment Advisor.
4. Recommendation
For the Minister for Treasury and Resources to approve the revised Investment Strategies (Appendix A) and request the Greffier of the States to present the Investment Strategies to the States.
5. Reason for Decision
For the Minister for Treasury and Resources to approve the revised Investment Strategies and present these to the States for information.
6. Resource Implications
Resource implications are as detailed in the Individual Investment Strategies.