Agenda and draft minutes

The Chair took the opportunity to welcome Councillor Tazi Smith as a new member (Brent Council employer representative) of the Board along with Amanda Healy, following her appointment as Brent Council’s Deputy Director Investment & Infrastructure).

No apologies of absence were received.

Members are invited to declare at this stage of the meeting, the nature and existence of any relevant disclosable pecuniary or personal interests in the items on this agenda and to specify the item(s) to which they relate.

David Ewart (as Independent Chair) declared a personal interest as a member of CIPFA.

No further declarations were made during the meeting.

To approve the minutes of the previous meeting held on Monday 25 March 2024 as a correct record.

The minutes of the previous meeting held on Monday 25 March 2024 were AGREED as an accurate record.

None.

This report updates the Pension Board on various pensions administration matters as part of its remit to oversee the administration of the Brent Pension Fund.

Sawan Shah (Head of Finance) introduced the report, which updated the Pension Board on various pension administration matters as part of its remit to oversee the administration of the Brent Pension Fund.  The Board was advised that the update included a review of performance against agreed Service Level Agreements (SLAs) for Q4 (Jan – March 24) as well as Q1 (April – June 24), with the Q4 update having been delayed as a result of the Board needing to be rescheduled due to the General Election.

Members noted the Q4 update, and in focussing on overall performance during Q1 2024-25 the Board was advised that performance was high overall, with 98.7% of all case types being processed, meeting contractual SLA targets as detailed in Figure 2 of the cover report.   In terms of ongoing casework performance, whilst this also remained good, the Board was advised of an underlying backlog in cases identified as an area that needed to be addressed.  Helpdesk call performance had remained good, with average call wait times in June being 2 minutes and 4 seconds, and over two-thirds of help desk callers (67%) surveyed as being satisfied. Similarly, LPPA's performance in relation to complaints had remained steady.  Since the last update to the Board, 38 new complaint cases have been received at a rate of 7.6 per month, with an analysis of case type provided in section 3.5 of the cover report.  Whilst the overall level of complaints was recognised as high compared to historical averages, these were noted to be gradually falling.  The Board was also pleased to note the increase in scheme members who had now registered for the online pension portal, which was higher than the migrat of the pension administration and workflow system to UPM.

Following introduction of the report, the Chair welcomed Emma Hebblethwaite from LPPA, the Council’s administration service provider, who provided a verbal update regarding recent pensions administration performance, with the update summarised below:

• Members were informed that overall operational casework performance remained positive for the first quarter, with a performance average of 98.7% against SLAs and the trend having continued during July.  This success was attributed to upskilling, training and recruitment of new staff.

• In noting the performance update in relation to ongoing casework, the Board was advised of the current focus on outstanding cases relating to retirements and bereavements, both of which remained above the 95% SLA.  Members were advised that the overall number of outstanding cases reflected the work also being undertaken during Q1 to process and complete Annual Benefit Statements with a further trigger identified as the recent overseas member life benefit certificate process.

• In terms of LPPA contact centre calls performance, the average wait time had consistently been under the target of 4 minutes, with a peak in calls (625) and wait times having been identified within April, which was traditionally one of the busy months given the end of the financial year. Despite this extra pressure, the call wait time in April remained  ...  view the full minutes text for item 5.

To receive the Chair’s Annual Report to the Pension Board for 2023/24, providing an update on the work carried out by the Board during the year.

David Ewart (as Chair) introduced his Annual Report to the Pension Board, providing an update on the Board's work during 2023-24.

In introducing the report, the Chair highlighted the work of the Board as it related firstly to the review of investment activity and secondly to the performance of the pension administration function with additional roles in relation to risk management and the use of other discretionary powers.  In terms of the review of investment activities, it was recognised whilst this had taken up a relatively small part of the Board’s work, given the remit of the Pension Fund Sub Committee in this respect, members had continued to receive regular investment updates and been in general agreement with the action being taken by the Sub Committee both in regard to the move to revised asset allocations and also de-carbonisation with members mindful of their duty to effectively scrutinise the investment activity of the fund.

In terms of Pension Administration, the Board had taken the lead in scrutinising the performance of the Fund’s pensions administration partner Local Pensions Partnership Administration (LPPA), with the Board continuing to monitor those areas identified as not meeting SLA targets as well as general levels of performance.

Whilst aware of the areas for improvement highlighted and the need to maintain continuous improvement 2023-24 was felt to have been an encouraging year for the Fund, despite the increasing risks and pressures identified, with the funding level continuing to improve and investment returns remaining strong on an absolute basis although slightly underperforming relative to the Fund’s benchmark. The Fund had also continued progress against its net zero road map with further improvements in terms of the level of service to Fund members and the quality of data held, although the need to maintain ongoing and continuous improvements had been recognised.

In concluding the presentation of the Annual Report, the Chair also took the opportunity to thank all the Board members and supporting officers for their efforts and ongoing support, with members also taking the opportunity to formally thank the Chair for this role in conducting and managing the Board meetings

Having thanked the Chair and officers for their work, the Board RESOLVED to note the Annual Report.

This report presents the revised Risk Strategy and updated Risk Register for the Brent Pension Fund Pensions Administration Service.

Sawan Shah (Head of Finance, Brent Council) introduced a report, presenting the revised Risk Strategy and updated Risk Register for the Brent Pension Fund Administration Service.  In considering the report, members noted the changes made following a review of the Risk Strategy (attached as Appendix 2 to the report) which had been designed to reflect changes in the Local Government Pension Scheme and the broader environment, with the main changes including:

• An update section 7 of the strategy to develop key principles of risk management; and
• An update of the risk analysis (Section 10) to adjust the scoring of impact and likelihood to a five-point scale and ensure the descriptions matched those within the Council’s risk strategy.

Members were advised that the changes within the revised risk strategy had been designed to assess and score impact across financial impact, service impact and reputational impact with all three elements of each risk being combined and weighed to arrive at a composite score for impact based on the criteria set out within section 3.2.5 of the report.

Following an update of the Strategy, members were advised that key changes had been made to the Risk Register (attached as Appendix 1 to the report). These changes included:

·       All risks having been re-scored in line with the updating scoring descriptions in the risk strategy.

·       The risk register having been refreshed with similar risks being consolidated to avoid unnecessary duplication.

·       The inclusion of a new risk, Item 3.5, to cover the transfer of Brent's pensions payroll to LPPA.

In thanking Sawan Shah for the overview, the Chair welcomed comments from Board members. Contributions, questions, and responses were as follows:

• Further updates were sought on the risks that had been RAG rated as red within the refreshed Risk Register relating to cyber security and the geographic and economic risks impacting investments.  In terms of cyber risk, the Board was advised that whilst Brent had an established cyber strategy in place and LPPA had also implemented several controls in relation to cyber security, the high risk identified had been designed to reflect the increased threat posed given recent attacks on other public sector organisations and Councils targeting backup systems and third-party suppliers.  Whilst mitigations and controls were subject to regular and ongoing review and felt to provide a high level of protection, the risk was still considered to be high given the need to safeguard the integrity, confidentiality and availability of the pension scheme member data stored across both organisations.  In response to a further query regarding the Council’s ability to withstand and recover from a cyber-attack, the Board was advised that an update would need to be sought from the Council’s Shared Technology Service (STS) regarding the specific measures and controls in place although the significant investment made to protect against risk was noted and recognised.

On the topic of geographic and economic risk, whilst recognising the more uncertain nature and volatility created as a result of current geopolitical events and the impact on economic markets,  ...  view the full minutes text for item 7.

The purpose of this report is to update the Board on recent developments within the Local Government Pension Scheme (LGPS) regulatory environment and any recent consultations issued which would have a significant impact on the Fund.

George Patsalides (Finance Analyst, Brent Council) introduced a report that updated the Board on recent developments within the Local Government Pension Scheme (LGPS) regulatory environment and any recent consultations issued which would have a significant impact on the Fund.  In terms of key updates, the following issues were highlighted:

• The recent pension review announced by the government as part of its mission to ‘boost growth and make every part of Britain better off’.  The Board were advised that the review would look at how to ‘unlock the investment potential of the £360 billion LGPS’ with the Government to also consider legislating to mandate pooling if insufficient progress was made by March 2025.

• The parallel exercise run by the Scheme Advisory Board (SAB) to the scheme cost assessment which had been undertaken by the Government Actuary’s Department (GAD).  This had resulted in the SAB having assessed costs as being 20.5% of pensionable pay, which was 1% above the 19.5% target.  Although this had been within the range where the SAB could recommend changes in the benefit structure, members were advised that they had decided against doing so.

• Finally, the Board were advised of a case (Farley v Paymaster) which had highlighted the importance in maintaining data quality and accuracy in terms of communication between scheme administrators.  This had involved members taking legal action against their scheme administrator due to confidential information being sent to the wrong addresses and seen by a third party.

The Chair thanked George Patsalides for the comprehensive update provided and then welcomed contributions from members, with the resultant discussion summarised below:

• Whilst commenting on the level of detail and complex nature of many of the issues included in LGPS bulletins, the Board recognised the balance needing to be achieved in terms of the different audiences being targeted through the bulletins and good practice in providing Board Members with a general overview of the key issues and recent developments impacting the LGPS provided within them.

With no additional issues or comments raised, the Board welcomed the update provided and RESOLVED to note the overall report.

The purpose of this report is to inform members of the Pension Board and provide an update on the provision of the LGPS Online Learning Facility.

George Patsalides (Finance Analyst, Brent Council) introduced the report, which provided an update on the provision of the Local Government Pensions Scheme (LGPS) online pensions learning facility.  As context, members were reminded that as part of the Fund’s Training Strategy, all those involved in the governance of the Fund were expected to be able to evidence they had the knowledge, skills and commitment to carry out their role effectively.  In order to support members in meeting this requirement, the Fund had subscribed to the LGPS Online Learning Academy (LOLA), which included eight modules designed specifically for Sub Committee and Board Members, with progress by members in terms of the completion of each module set out within section 3.7 of the report.

In welcoming the progress being made, the Board was advised that the original plan for completion of the training programme had been refreshed to recognise the newer members who had joined the Board with the updated plan and timescales detailed within Appendix 3 of the report.  Members were encouraged to ensure they completed the required modules in line with the updated plan with officers advising members to contact them in the case of any issues.

In response to a request from Board members, George Patsalides advised that he would arrange for the updated Training Plan and content scheduled to be circulated to each member following the meeting as a further reminder.

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Having welcomed and thanked George Patsalides for the update, the Board RESOLVED to note the report and support the continued learning programme as outlined within the training timetable.

Before moving on to the remaining items on the agenda the Chair reminded Board members that agenda items 10, 11, 12, 13, and 18 were reports referred to the Pension Board for information following their consideration at the Brent Pension Fund Sub Committee.

To receive the Brent Pension Fund Q1 2024 Investment Monitoring Report.

Sawan Shah (Head of Finance, Brent Council) introduced the Brent Pension Fund Investment Q1 Investment Monitoring Update which covered the first quarter of 2024 from January to March.  Whilst noting the update covered Q1 (with Q2 due to be provided in October) the Board were advised that highlights included the fund having posted positive returns over the quarter, with fund assets at £1.26billion. The main driver in terms of returns had been the Fund's growth assets, which had delivered a return of 4.1% overall.  The Monitoring Update also included details on the Fund’s Asset Allocation, which it was noted remained broadly in line with the overall Investment Strategy. Estimated funding was noted to have significantly improved since Q1 2022 (97%), now at 119%. This was driven by liabilities remaining broadly stable whilst assets had grown over the same period.  Members also noted the update provided in relation to each Fund Manager's performance, with the most significant contribution to performance having been achieved through LGIMs Global Equity Fund as well as the LGIM UK Equity and BlackRock World Low Carbon Funds. In terms of those Funds identified as underperforming, these (which included the Capital Dynamics Infrastructure Fund and UBS and Fidelity Property Funds) members were advised that given the relatively small allocations of each within the total Fund, they had not materially detracted from the Funds overall performance.

Having thanked Sawan Shah for the update, the Chair invited comments from the Board, with the consequent discussion summarised below:

• Regarding the Fund’s ongoing involvement with underperforming investments such as Capital Dynamics and the Property Funds highlighted. Members were advised that, in most cases, the private equity investments were mature investments now coming towards the end of their life cycle.  The Pension Fund Sub Committee was already looking to derisk away from these investments as and when the relevant opportunity was identified to exit the holding, recognising the individual nature of each holding and need to ensure best value was obtained.

• In response to clarification being sought on the role of the Board in relation to Investment Fund monitoring, the Chair advised members that whilst the Pension Fund Sub Committee had responsibility for managing the Fund’s investment process and strategy, the Board also had a remit in terms of scrutinising the role of the Sub Committee in this respect.  Members welcomed the high level of support and co-operation between the Sub Committee and Board in terms of this role and in ensuring effective governance, management and oversight of the Fund’s investment activity and also administration of the scheme.

In noting that the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 1 August 2024 the Board RESOLVED to note the Q1 Investment Monitoring Update.

To receive the draft Pension Fund Annual Accounts for the year ended 31 March 2024.

The Board received a report that detailed the draft Pension Fund Annual Accounts for the year ended 31 March 2024.  Members were advised that the draft accounts had been published a month earlier than last year to reflect the earlier statutory deadline for publication of 31 May 2024, although publication had been slightly delayed beyond the statutory deadline due to additional general fund valuations needing to be undertaken for the 2023-24 Statement of Accounts compared to recent years.  It was, however, noted that this had not resulted in delay to the external audit work, which had commenced in June 2024 and was currently in progress with no significant issues having been identified to date.  At this stage and subject to the outcome of the audit process it was anticipated that final sign-off of the accounts would be completed by October.

Officers were commended for their work to complete the draft accounts and in noting that the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 1 August 2024 the Board RESOLVED to note the Draft Pension Find Statement of Accounts and Audit Plan 2023-24.

To present an update on the Fund’s net zero road map and updated London CIV responsible investment policy.

The Board received a report providing an update on the Fund’s Net Zero Road Map and updated London CIV Responsible Investment Policy, which it was noted provided an overview of the risks and opportunities around net zero and the achievements made so far.

In noting that the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 1 August 2024 the Board RESOLVED to note the updated provided within the report and progress being made in relation to the roadmap.

To present members with an update on engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund.

The Board received a report providing an update on the engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund, as detailed with the Q1 LAPFF Engagement Report included as Appendix 1 to the cover report. 

In noting that the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 1 August 2024 the Board RESOLVED to note the report and update on LAPFF engagement activity.

To receive an update on the provision of the LGPS online learning facility.

The Board was advised that consideration of this item had been withdrawn from the agenda on the basis it duplicated the separate update which had been dealt with under Item 9 above.

To note the dates of the remaining Pension Board meetings for the 2024-25 Municipal Year, as follows:

·        Thursday 7 November 2024 at 6:00pm

·        Monday 24 March 2025 at 6:00pm

The Committee NOTED the dates of the remaining Pension Board meetings for the 2024-25 Municipal Year, as follows:

• Thursday 7 November 2024 at 6:00pm
• Monday 24 March 2025 at 6:00pm

Notice of items to be raised under this heading must be given in writing to the Head of Executive and Member Services or his representative before the meeting in accordance with Standing Order 60.

The Chair advised members that as Sunil Ghandi no longer represented an employer member (Non-Brent Council) in the scheme his position as Board Member had become vacant. Officers were now in the process of seeking to fill the vacancy with the Board placing on record their formal thanks for his service and support whilst serving as a member of the Board.

To consider the exclusion of the press and public from the remainder of the meeting as the remaining reports to be considered contain the following category of exempt information as specified in Paragraph 3, Part 1 Schedule 12A of the Local Government Act 1972, namely:

“Information relating to the financial or business affairs of any particular person (including the authority holding that information)"

At this stage in the proceedings, the Pension Board was asked to consider whether they wished to exclude the press and public for consideration in the final report on the agenda. Given that the following item had been submitted for information and could be considered without the need to disclose any information classified as exempt, it was RESOLVED not to exclude the press and public from the remainder of the meeting.

The meeting then continued in open session.

To receive a report updating on recent developments regarding Brent Pension Fund investments held within the London CIV (CIV).

The Board received and RESOLVED to note, without further comment, a report that provided an update on recent developments regarding Brent Pension Fund investments held within the London CIV.