Agenda and draft minutes

1.1     RESOLVED that the minutes of the meeting of the Pensions Board held on 24 September 2024 be agreed.

2.1     No interest was declared.

3.1     The Head of Payroll and Pensions advised the Board there were no breaches to report since the last meeting.

3.2     RESOLVED that the report be noted.

4.1     The Treasury and Investment Manager presented the Action Log report to the Board and provided the below updates:

·     Action No.1: Administration Strategy – update to be provided under agenda item 6 – General Update Part One.

·   Action No.2: Data Improvement Plan – update to be provided under agenda item 6 – General Update Part One.

·     Action No.3: Officers to report on the new regulations with any proposed actions, with a focus on the functions of the Board, and from the Pension Regulator’s point of view – To be discussed quarterly at each Pension Board meeting.

·   Actions No.4, 5, 6 and 7: All resolved.

4.2     With reference to Action No.3 the Chair asked if the 'regulations' referred to were the Codes issued by TPR. The Treasury and Investment Manager confirmed this was the case and will update accordingly.

4.3     RESOLVED that the report be noted and the rolling actions since the last report be noted.

5.1     The Treasury and Investment Manager presented the report and advised it itemised the training for each Board member.

5.2     The Chair referred to the single code from the Pension Regulator and further understanding and training requirements for Pension Board members and noted it would be useful to include this on the agenda for the next meeting. The Board members agreed.

          Action: Treasury and Investment Manager to add The General Code from the Pension Regulator and further understanding and training requirements for Pension Board members arising from it to the agenda for the next meeting.

5.3     RESOLVED that the report be noted.

The Employee Representative (Gary Cummins) joined the meeting therefore making the meeting quorate.

6.1     The Treasury and Investment Manager presented the report on behalf of the Director of Finance and provided the below updates:

Draft Pension Fund Annual Report

·     The auditors had not yet completed their audit. Part of the statutory deadline was to publish the report by 1 December 2024; the draft Pension Fund Annual Report had been published on the website.

·     The auditors expect to complete their audit by end January 2025. The final report would then be published and brought to the Pension Board meeting in March 2025.

·     The Chair asked if confirmation had been received from the auditors that they would meet their statutory deadline of 25 February 2025. The Treasury and Investment Manager confirmed the auditors expect to meet their deadline.

Procurement of Pension Actuarial, Governance and Advisory Services

·     The procurement process used the National LGPS Framework and the contract for the services was awarded to Hymans Robertson.

Administration Team Update

6.2     The Head of Payroll and Pensions provided the below updates:

·     The pension audit carried out by KPMG was comprehensive and now completed.

·     The Pension Saving Statements for 2023/24 were due to be sent out by 6 October 2024 and were sent in advance of that date.

·     The Heywood ISP had been purchased in preparation for the Pensions Dashboard. Due to some technical issues to be resolved, work on the first phase would move to early March 2025.

·     Approval to recruit to the five outstanding vacancies in the Pension team had been received. Resourcing remained an ongoing issue.

·     Work on the Data Improvement Plan had been delayed. An update on this to be presented to the Pension Board meeting in March 2025.

6.3     The Chair stated he was pleased to see the data cleansing tool had gone live and the team were exploring the capabilities of it.

6.4     The Chair commented the resourcing issue was a concern and recommended priority was given to get resources up to full complement. The Pension Board agreed the Chair’s recommendation.

Pension Fund Administration Strategy

6.5     The Head of Payroll and Pensions advised the Pension Administration Strategy had been completed and would be presented to the Pension Investment Committee (PIC) in February 2025 for approval.

6.6     RESOLVED that the report be noted.

7.1       The Treasury and Investment Manager presented the Work Programme report as of December 2024.

7.2     The Chair suggested an ongoing item on the General Code should be added to the Work Programme.

7.3     The Chair queried whether the Board need to ensure an update was provided on the Mansion House consensus and the implication of the scheme on the authority. The Treasury and Investment Manager confirmed this should be added to the Work Programme.

7.4     The Board agreed to the additions to the Work Programme as outlined in paragraphs 7.2 and 7.3.

          Action: Treasury and Investment Manager to add General Code and Mansion House consensus to the Work Programme.

7.5     RESOLVED that the report be noted.

8.1     The Board noted the future meeting dates as below. Board Members to alert the Treasury and Investment Manager or the Governance Officer as soon as possible if they are unable to attend.

·       10 March 2025

·       16 June 2025

8.2      RESOLVED that the future meeting dates be noted.

9.1     Having reviewed the meeting papers, the Chair advised that the Mansion House Speech and Consultation section within the private General Update Part Two could be discussed without the exclusion of the press and public.

9.2     The Treasury and Investment Manager noted the item was not private or confidential because it was in the press and on the Government website.

9.3     In her Mansion House speech the Chancellor of the Exchequer raised the topic of pooling LGPS investments. A consultation on LGPS was released with a deadline of 16 January 2025 to respond. The Government’s plan was to have all the funds under pooled management by March 2026, to strengthen governance of the pools and have more input into holding CIF to account.

9.4     The Employee Representative queried, as it was a consultation, were the authorities able to say no to the proposal. The Treasury and Investment Manager advised there were a lot of questions being asked in the consultation; if it was the view of Lewisham to say no, they could do so noting it would not be likely that the consultation would take this into account. The Employee Representative commented it appeared to be moving further away from local control.

9.5     The Chair stated the role of the Pension Board related to good governance of the scheme and did not extend to matters of policy. The Chair asked if a response to the consultation was planned by the council. The Treasury and Investment Manager advised a response had been prepared and, because of the amount of questions, consultation with other local authorities, the council’s advisors, London CIF and HM Treasury was being held. The response to the consultation would be presented to senior officers and PIC.

9.6     The Employee Representative commented that people who pay into the pensions had not been consulted. The Treasury and Investment Manager advised the main duty of PIC was a fiduciary duty to get the best return for employees.

9.7     The Chair noted it was a public consultation and therefore open to authorities, including Unions, to give their responses.

9.8     The Employee Representative asked if there was any indication in the consultation what percentage of pension funds would be included. The Treasury and Investment Manager advised it would be 100%.

9.9     The Chair requested the Treasury and Investment Manager to qualify what the consultation process would be for the council and report back to members of the Pension Board.

          Action: Treasury and Investment Manager to provide Board members with details of the consultation process by the council.

9.10    RESOLVED that the ‘Mansion House Speech and Consultation’ section of the General Update Part Two report be noted.

10.1    It was moved, seconded and RESOLVED that under Section 100(A)(4) of the Local Government Act 1972, the press and public were excluded from the meeting for the following items of business on the grounds that they would involve the likely disclosure of exempt information as defined in paragraphs 3, 4 and 5 of Part 1 of Schedule 12(A) of the Act, as amended by the Local Authorities (Executive Arrangements) (Access to Information) (Amendments) (England) Regulations 2006:

·         Item 11. General Update – Part Two (with the exception of The Mansion House Speech and Consultation – see paragraphs 9.1 to 9.10).

11.1    The Treasury and Investment Manager advised the recommendations outlined in the report were for the Board to note.

Quarter 3 Investment Performance Report

11.2    The Treasury and Investment Manager highlighted the below:

·         The Hymans Robertson quarterly performance report was presented to PIC in November.

·         Members of the Pension Investment Committee had raised questions regarding performance in the last quarter. The advisors had stated funds tend to fluctuate and it would be necessary to look longer term on investments.

·         The Chair referred to paragraph 4.8 and asked if any decision had been taken on rebalancing the liquid assets. The Treasury and Investment Manager advised at the November meeting PIC had agreed to rebalance.

Pension Regulator’s General Code of Practice

11.3    The Treasury and Investment Manager highlighted the below:

·         The Pension Regulator’s General Code of Practice sets out a lot of areas that the council should be operating to or have policies in certain areas.

·         Hymans Robertson’s report detailed areas where the Council were lacking information or should provide evidence.

11.4    The Chair commented the exercise undertaken was useful and, with reference to the Scorecard Summary (Board Structure and Activities), noted it would be helpful on those items marked ‘green’ to have an explanation why they had a green rating. For those items not green rated, the Chair suggested the Scorecard Summary could include specific actions to reach a green rating, including a specific officer responsible and target date.

11.5    The Chair suggested the Scorecard Summary (Knowledge and Understanding) in relation to Pension Board members should be taken as a separate item. This would help the Pension Board to administer the robustness of the Code and the agreed actions stemming from that.

          Action: The Treasury and Investment Manager to update the Scorecard Summary as outlined in paragraphs11.4 and 11.5.

11.6    The Board members agreed to the suggestions noted in paragraphs 11.4 and 11.5.

          Transition to Net Zero

11.7    The Treasury and Investment Manager highlighted the below:

·         Hymans Robertson presented an updated to the Transition to Net Zero policy to the Pension Investment Committee.

·         Hymans Robertson provided their proposed recommendations to move towards net zero.

11.8    The Chair commented there was volatility in the carbon metrics that had been reported by managers and sought clarification on what was being done to obtain assurance about carbon metrics. The Treasury and Investment Manager advised the MSCI index was used.

11.9    The Chair referred to paragraph 11 on page 168 and asked what the purpose was for the inclusion of this paragraph. The Treasury and Investment Manager advised he would refer to the consultants and report back to the Board.

          Action: The Treasury and Investment Manager to provide reasoning for the inclusion of paragraph 11 on page 168

11.10  RESOLVED that the report be noted.

There being no other business, the meeting ended at 15:23.