Agenda item

Report to follow.

The Principal Account gave the following summary of the report:

There is not yet a policy in place to ensure compliancy to the breaches of the law log. This is to be addressed next quarter.

There had been several changes over the last 12 months in regards to the London CIV. Their engagement with London boroughs had improved substantially. They had set up monthly business updates to update shareholders on the progress they made on setting up new funds, performance of the funds and those in development. They had also set up investor groups where there potential mandates investors may be interested in.

The Value of Assets under management now has increased up to £9.5bn. Lewisham does not have anything invested in the CIV currently, but that is likely to change within the next year, he stated.

The latest internal audit concluded in July 2020. Just two medium recommendations were given- one was to update the risk register and the other was regarding the reconciliations undertaken be done in a more timely manner.

From the Scheme Advisory report, it was question whether some large structural reforming should take place on how the LGPS functions in conjunction with the local authority and what the methods of best practice would be. Two working groups were commissioned to take forward two phases of the project- one to look forward at the outcomes they would wish to see improvements for and the other to look at establish a new compliance regime to establish how the standards would be set out. The project was paused due to COVID.

A Supreme Court judgement was made about the governments wording in their statutory guidance of how funds should or should not pursue investment strategies which are contrary to UK foreign policy. The phrasing from the government was the Funds should not be making such investments. The ruling was that the government do not have the power to make that legally binding. Funds have always had this ability divest from sensitive countries or companies on financial grounds. It has now been made clear that non-financial factors can be considered in making investment decisions. As a result, there have been requests from certain pressure groups and freedom of information requests about certain investments the Fund might hold. It was confirmed that the Fund does have small exposure to some of the companies on a UN list, roughly £230,000. But it has been stressed in our responses that the Fund’s new investment policy will divest in our current equities into our current carbon equivalents, so will divest away from those companies.

The Pension Fund Annual report summarised summarises the performance of the Fund over the year as well as the statement of accounts. There was a recommendation that Members delegate the Chair the writing of the Pension report which goes into the full report.

It was also recommended that the Board undergoes training of interest. Members agreed to notify officers of attended training to ensure the training log is kept up to date.

Action: The Chair asked if members would agree that before committing funds to the CIV the administering authority should be satisfied about the mechanisms to obtain the assurance about both the design and the ongoing operation of the controls of the CIV. The board agreed.

RESOLVED it was agreed that the Chair will write the Pension report for the full annual report.