Agenda and minutes

An apology for absence was received from Robert Wheeler (Member representative - GMB).

Members are invited to declare at this stage of the meeting, any relevant discloseable pecuniary or personal interests in any matter to be considered at this meeting.

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 Tuesday 3 September 2024 as a correct record.

The minutes of the previous meeting held on Tuesday 3 September 2024 were AGREED as an accurate record.

None.

To updates the Pension Board on pensions administration performance and related matters as part of its remit to oversee the administration of the Brent Pension Fund.

(Agenda republished to include this item on 31 October 24)

John Smith (Pensions Manager) 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 Q2 (July – September 24) with a brief overview provided on Fund membership, which as of 30 September 24 comprised 6,452 active members, 10,158 deferred members and 7,528 pensioner and dependant members.  The Board’s attention was drawn to the high number of deferred members recorded, which members were advised had been subject to review and it was noted had been impacted by figures including refunds and benefits.

In focussing on overall performance during Q2 the Board was advised that this remained high overall with 98.4% (July), 98.1% (August) and 98.2% (September) of all case types being processed, meeting contractual SLA targets as detailed in section 3.4.7 of the cover report.  The Fund’s perception was that the service was continuing to improve, with it noted that only transfers-out (93.4%), which were identified as less critical, had fallen below SLA (95%) and Figure 2 in the cover report providing detail on the number of cases that had been processed grouped by category.  Performance in relation to complaints and Helpdesk call performance had also remained strong.

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

·             Members were informed that overall operational casework performance remained positive for Q2, with a performance average of 98.2% against SLAs.  It was noted that nine cases relating to Transfers Out had missed the target SLA with the issues identified as a result having now been resolved.

·             In noting the performance update in relation to ongoing casework, the Board received an update on the work being undertaken in relation to Active to Retirement processes including the number of retirement notifications received on time v those notifications received late, number of on time notifications processed within target and performance in relation to late notifications processed.  In terms of issues impacting on performance members were advised of the additional requirements in relation to members with Additional Voluntary Contributions (AVC) and ongoing work with employers to promote the need for the submission of information on a timely basis to support the processing of cases.

·             In terms of LPPA contact centre calls performance, the average wait time had consistently been under the target of 4 minutes, with an average wait time over Q2 of 2 minutes 16 seconds.

·             In terms of Customer Satisfaction scores, members were reminded that Contact Centre satisfaction now included overall satisfaction scores as well as for the individual call handlers, which was typically higher than the overall score, with scores for Q2 at 92.2% and 75% respectively and customer feedback subject to ongoing monitoring to support staff development and training.  It was noted that an increase in call  ...  view the full minutes text for item 5.

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

Sawan Shah (Head of Finance, Brent Council) introduced a report, presenting the updated Risk Register for the Brent Pension Fund Administration Service.  In considering the report, members noted the changes previously agreed in relation to the updated Risk Strategy (attached as Appendix 2 to the report) and key changes made to the Risk Register (attached as Appendix 1 to the report) since the previous update which included:

·             Item 1.1 Business Continuity – the update of supporting commentary

·             Item 3.1 Scheme Data – an expansion of controls listed

·             Item 3.2 Record Keeping – the update of a supporting comment to reflect recent data cleanse activity

·             Item 3.5 Pensions Payroll Migration – the update of a supporting comment to reflect recent activity

·             Item 3.6 Re-enrolment – the update of a supporting comment to reflect the Re-enrolment exercise currently taking place

·             Item 4.2 Annual Benefit Statements – the risk of likelihood being lowered and an updated comment following the 2024 exercise

·             Item 4.4 Monthly contribution returns – the update of a supporting comment

·             Item 5.4 Governance – the update of controls listed

·             Item 5.5 Discretions – an update of the risk outline and supporting comments

·             Item 6.5 Annual Audit – the update of a supporting  comment to reflect progress on the audit of the financial statements

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

·             Further details were sought on the potential impact arising from the outcome of the US Presidential election in relation to the geographical and economic risk in relation to investments (Risk 6.2) included on the register.  In response, assurance was provided of the work being undertaken by officers in conjunction with the Fund Investment Advisors to actively monitor these impacts and adjust the Fund investment strategy as required.  Members were also reminded that the Fund held a well-diversified investment portfolio, which included a mixture of growth, income, and protection assets based on professional advice and was therefore able to take a longer term view in relation to investments avoiding over exposure in any one specific market or to shorter term market volatility with quarterly updates on investment performance also provided for the Pension Fund Sub Committee and Board subject to regular monitoring.

·             Further clarification was sought on the integration between the Risk Strategy and Risk Register as a means in supporting the scheme manager in identifying and managing scheme risks and how this was incorporated within the Register presented to the Board including the details provided on the strategy (in terms of controls and mitigations) in place to control those issues identified with the highest risk ratings on an ongoing basis such as cyber security.  In response, members were advised that the Strategy had been subject to a detailed review and update with the outcome and changes made as a result presented to the Board at their previous meeting in September 2024,.  In providing further clarification on the way in which risks included within  ...  view the full minutes text for item 6.

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.

John Smith (Pension Manager, 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 call for evidence published as part of the first phase of the recent pension review announced by the government, which had included consideration of measures to accelerate asset pooling and increasing Local Government Pension Scheme (LGPS) funds investment in ‘productive finance’.  The response submitted by the LGPS on behalf of the Local Government Association (LGA) had been attached as Appendix 3 to the report supplemented by a response from the Scheme Advisory Board (SAB) attached as Appendix 4 of the report.  The second stage of the review was expected to include consideration of pension adequacy, fairness and the consequences of the gender pensions gap.

Guidance had also been published regarding the LGPS fund account return with the information used to provide a benchmark on administration and fund management, compiling the national accounts and illustrate the role of the LGPS in the economy.

·             Publication of a report by the Government Actuary's Department (GAD) to the Ministry of Housing, Communities and Local Government (MHCLG) on the 2022 fund valuations, which had examined how fund valuations had delivered against the aims of compliance, consistency, solvency and long-term cost efficiency.  The analysis had found the LGPS to be in a strong financial position with many funds in surplus with GAD making recommendations for the Scheme Advisory Board to consider including whether greater consistency could be achieved to allow easier comparison between funds and to refine the climate change principles in advance of the future valuations.

·             In terms of more general updates, the Board were advised that the Government was considering extending the Fair Deal to local government including pension provision for councillors.  MHCLG had also signalled their intention to address discrimination by removing the age 75 limit on death grants and giving widower’s pensions parity with widow’s/same sex partners following the Goodwin ruling in the Teachers’ Pensions Scheme.  Moving on the Pension Dashboard the Pensions Regulator had now published its Pensions dashboards compliance and enforcement policy, in response to a consultation, and updated breach of law guidance. As a result, Brent would be reviewing its own policy with schemes expected to connect to the dashboard eco-system in line with the Department for Work & Pensions staged timetable designed to reduce delivery risk to industries and test software to ensure a successful launch.

The Chair thanked John Smith for the comprehensive update provided and then welcomed contributions from members, with comments raised summarised below:

·             Referring to reference within the August 2024 LGPC Bulletin (attached as Appendix 1 of the report) to the recent Government focus seeking to encourage UK pension schemes to invest more in the UK economy, further clarification was sought on the Canadian model cited as an example  ...  view the full minutes text for item 7.

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.

Sawan Shah (Head of Finance, 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 the Pension Fund 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 made, the Board noted the training plan had been adapted to accommodate new members of the Board with the updated plan and timescales for completion of the required modules 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 requiring support to contact them for assistance

Having thanked officers 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 9, 10, 11, 15, 16, and 17 were reports referred to the Pension Board for information following their consideration at the Brent Pension Fund Sub Committee on 8 October 2024.

To receive the Brent Pension Fund Q2 2024 Investment Monitoring Report.

Sawan Shah (Head of Finance, Brent Council) introduced the Brent Pension Fund Investment Q2 Investment Monitoring Update.  In terms of key highlights in terms of performance during Q2 the Board was advised that the Fund had posted a positive return with a valuation of £1,279.2m up from £1,259.7m at the end of Q1 with the assets combined to return 1.4% over the monitoring period.  The main driver of the positive return had been the Fund’s passive global equity exposure on an absolute basis, along with its exposure to UK and emerging market equities. Within the income assets, the Fund’s private debt, property and multi-asset exposure contributed to performance on an absolute basis. The main detractor from performance had the Fund’s government bond exposure, which fell in value as gilt yields rose over the quarter.  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 Whilst it was noted the Fund, on a relative basis, had underperformed its benchmark by 0.5% and was behind its composite benchmark over the past 12 months and over 3 years the funding level, had been estimated (as at 30 June 2024) to be 123%.  This represented an increase from 111% in Q3 2022 with the funding level having remained relatively consistent over the previous 12 month period and in advance of the next scheduled valuation in 2025.

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

·             In response to further 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 8 October 2024 the Board RESOLVED to note the Q2 Investment Monitoring Update.

This report provides an update on the Pension Fund Annual Report and Accounts for the year ended 31 March 2024.

Sawan Shah introduced the report, presenting the Pension Fund Annual Report and Accounts ending 31 March 2024.  The Board was advised that work to complete the audit on the Statement of Accounts was now substantially complete, with an update on progress having been presented to the Audit & Standards Advisory Committee on 31 October 2024.  Whilst it had not been possible to achieve the initial deadline, work to complete the outstanding audit fieldwork was ongoing with no significant or material issues in terms of the Pension Fund Statement of Account having been identified to date.  It would not, however, be possible to sign off the Pension Fund Accounts until work on the Council’s Statement of Accounts had also been completed, which had been subject to additional delay due to a number of outstanding requests for information that had needed to be addressed.  The Board was assured that regular meetings with the auditors continued to be held with David Ewart (in his capacity as Independent Chair of the Audit and Standards Advisory Committee) also confirming the efforts being made to complete the audit process as soon as was possible.

In terms of the draft Pension Fund Annual Report (which it was noted included the Fund’s Investment Strategy Statement; Pensions Administration Strategy and Funding Strategy Statement) members were advised this had been sent to Grant Thornton (External Auditor) for review.  Given the ongoing work to complete the audit on the Council’s Statement of Accounts, the Board was advised that this would mean the Annual Report would need to be published without the inclusion of the final Audit Opinion, to meet the required timescale which the Board advised was accepted practice in these instances.

Officers were commended for their work on the Annual Report and in noting they had been subject to detailed review at the Brent Pension Fund Sub Committee on 8 October 2024 the Board RESOLVED to note the Brent Pension Fund Annual Report 2023-24 and update on the Pension Find Statement of Accounts.

To present 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 Q2 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 8 October 2024 the Board RESOLVED to note the report and update on LAPFF engagement activity.

Notice of items to be raised under this heading must be given in writing to the Deputy Director Democratic Services or their 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 which was hoped to complete in advance of the next Board meeting in March 2025.  The Board placed on record their thanks to Sunil for his service.

No other issues were raised for consideration under this item at the meeting.

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

·             Monday 24 March 2025 at 6:00pm

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

·             Monday 24 March 2025 at 6:00pm

The following items are not for publication as they relate to the category of exempt information set out below, as specified under Part 1, Schedule 12A of the Local Government Act 1972:

Agenda Item 9:       Q2 2024-25 Investment Monitoring Report – Fund Manager performance ratings.

This appendix has been classified as exempt under Paragraph 3 of Part 1 Schedule 12A of the Local Government Act 1972, namely: “Information relating to the financial or business affairs of and particular person (including the authority holding that information).”

To consider the exclusion of the press and public from the remainder of the meeting as the report(s) to be considered contain the following category of exempt information as specified in Paragraph 3, 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 meeting, the Chair advised that the Board would need to move into closed session to consider the final items on the agenda.

It was therefore RESOLVED to exclude the press and public from the remainder of the meeting as the reports and appendices to be considered contained the following category of exempt information as specified in Paragraph 3, Schedule 12A of the Local Government Access to Information Act 1972, namely:

“Information relating to the financial or business affairs of any particular person (including the Authority holding that information)”.

The meeting then continued in closed session with the webcast ended.

As part of the Brent Pension Fund Sub Committee Investment Strategy review, the Sub-Committee agreed to a market review of the passive global equities mandate to have a greater focus on responsible investment. This report provides an analysis of investment options presented to the Sub-Committee.

Sawan Shah (Head of Finance, Pensions) introduced a report detailing the outcome of a market review (as part of the Funds Investment Strategy) of the Funds passive global equities mandate and outlining recommended investment options for consideration based on the analysis provided.

In considering the update provided further clarification was provided for the Board in relation to the nature of the proposed investments and their risk exposure compared to those already held by the Fund and commitment the recommended approach would deliver in relation to the fund's ongoing net-zero ambitions.

In noting that the approach identified had been subject to detailed review at the Brent Pension Fund Sub Committee on 8 October 2024 the Board RESOLVED to note and endorse the decision made by the Sub Committee to approve the recommendations as detailed in section 2.of the report.

To update members on recent developments regarding Brent Pension Fund investments.

Sawan Shah (Head of Finance, Pensions) introduced a report updating the Sub Committee in relation to specific investments held by the Fund with individual providers.

In considering the report, members noted and commended the proactive approach taken by the officers and the Fund’s Investment Advisors, which it was recognised had been undertaken in order to safeguard the best interests of the Fund.  With the approach identified having been subject to detailed review at the Brent Pension Fund Sub Committee on 8 October 2024 the Board RESOLVED to note and endorse the update provided and action which the Sub Committee had agreed to take as detailed in the report.

To provide an update 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.