Agenda and minutes

None.

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

None.

To approve the minutes of the previous meeting held on Monday 25 July 2022 as a correct record.

The minutes of the previous meeting held on Monday 25 July 2022 were agreed as an accurate record.

None.

To update the Pension Board on various pension administration matters as part of its remit to oversee the administration of the Brent Pension Fund.

Sawan Shah (Head of Pensions, Brent Council) introduced the report, which updated the Pension Board on various pensions administration matters as part of its remit to oversee the administration of the Brent Pension Fund.

The first part of the update concerned Pensions Administration Performance, covering the period from April to June 2022.  In considering the report the Board noted:

·            The Pensions Administration performance update for the Q1 2022-23 monitoring period, as detailed within Appendix 1 of the report.

·            The quarterly average percentage of cases processed on time was 94.7%, which whilst below the contractual Service Level Agreement (SLA) target of 95% was within revised targets agreed during the Universal Pensions Management (UPM) migration period.

·            In terms of Helpdesk call performance there had been a significant reduction in average call wait times with performance in June at 5 minutes 21 seconds and the average calls answered having increased from 84.6% in April to 94.7% in June.

·            Phase 1 of the migration to Universal Pensions Management (UPM) had been completed with 9 LPPA clients now live and Brent scheduled to go live in November as part of the Phase 2 migration.

·            The number of complaint cases remained low with 8 new cases received since the previous update and action being taken to ensure these were resolved as swiftly as possible. Following the completion of each case, a process was undertaken to ensure any lessons learned were reviewed and consequently, if necessary, processes and procedures updated.

·            The Pension Regulator scores achieved in relation to the accuracy of common and conditional data had improved further since the previous quarter.

Jo Darbyshire (Managing Director, LPPA as the Pension Administration Service for the Fund) then provided the Board with a more in-depth overview of pension administration performance as detailed within the LPPA Q1 Pension Fund Administration Report.  Key issues highlighted were as follows:

·            Referring firstly to progress with the introduction of the new pension administration system and migration to Universal Pensions Management (UPM) the Board was advised that Phase 1 of the process had been successfully completed with nine out of 18 LPPA clients having ‘gone live’.  Phase 2 migrations were now underway, which included Brent, who were due to go live in November 2022.  The Board were advised of the checks and measures in place to ensure a smooth transition to UPM with regular updates and a detailed technical sign off procedure in place to support the transition to the new system.

·            Whilst anticipated and short-term in nature, it was recognised that the operational impacts arising from the phased “go lives” of the UPM migration programme had adversely affected performance against SLA which had been reflected in the Q1 performance data.  Whilst overall performance against SLAs was improving it remained below target with the key areas impacting on performance including – increased volumes and spikes of work post go-live, system downtime with a 2 day Altair outage at the end of June and ongoing work and reallocation of resources in support of the Phase 2  ...  view the full minutes text for item 5.

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

Rubia Jalil (Finance Analyst, Brent Council) presented a report, updating the Board on the Risk Register for the Brent Pension Fund Pensions Administration Service.

In considering the report, the Board noted the following:

·            No new risks have been added to the Risk Register since the previous update in July 2022.

·            The changes made to the Risk Register, as detailed within section 3.6 and Appendix 1 of the report. The key changes identified included:

Ø   Item 5.3 (Employer Data – Failure to provide data accurately and on time) being updated to reflect the controls in place including Employer Engagement and Forum and training.

Ø   Item 5.7 (Data Migration) the likelihood of the risk materialising had been changed from 3 to 2 with the overall score for the risk having changed from 24 to 16 due to the experience gained from early data cuts.

Ø   Item 6.12 (Pension Plan Events Planning) being updated following completion of GMP reconciliation.

Ø   Item 9.12 (The Fund’s Assets Insufficient to Meet Long Term Liabilities) being updated to reflect the 2022 Fund valuation.

The Board also received and noted the Risk Strategy for the Fund, attached at Appendix 2 of the report.

The Board welcomed the report and as no further issues were raised it was RESOLVED to note the report including the key changes set out in section 3.6 of the report.

The purpose of this report is to update the committee 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.

Rubia Jalil (Finance Analyst Brent Council) introduced the report providing an update 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 considering the report the Board noted the following updates:

·            The publication of a factsheet by the Pensions Ombudsman (TPO) in July 2022 on the McCloud judgement setting out the Ombudsman’s views on what affected members and schemes could do in response to the original judgement and their present approach to dealing with complaints relating to the impact of the judgement.

·            The TPO had recognised the steps being taken by the Government to address the age discrimination issues in relation to public sector schemes as a result of the judgement, with retrospective effect and had therefore advised they would need to carefully look at the facts of any related case before deciding whether or not to investigate, with the factsheet providing examples of where they may decide to do so.

·            The launch of a consultation by HM Treasury in August 2022 on public sector exit payments. The consultation covered the proposal and guidance to introduce an expanded approvals process for employee exits and special severance payments, along with additional reporting requirements which whilst not applying to local authorities would apply to academies.

·            The publication of a press release by The Pensions Regulator (TPR) warning employers to ensure they were complying with their automatic enrolment duties.  This followed a number of in-depth compliance inspections earlier in the year where the Regulator had found several common errors in respect of calculating pension contributions and communications to staff and encouraged employers to also check their systems and processes were up to date and running smoothly as part of the standard re-enrolment process.

·            The inclusion of details on the Local Government Association website relating to the cost of living crisis, which included advice on support in relation to living costs, reducing or stopping pension contributions, pension scams and help for pensioners on lower incomes.

The Board welcomed the report and as no further issues were raised it was RESOLVED to note the recent developments in the LGPS, as detailed within the report.

To receive the Brent Pension Fund Q2 2022 Investment Monitoring Report.

The Board received an update on the Brent Pension Fund Q2 2022 Investment Monitoring Report, which it was noted had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.

In considering the report, the Board noted the impact on the Fund’s investment performance as a result of the ongoing challenging economic context and market volatility, with a majority of the Funds asset classes having struggled as a result.  The Sub-Committee had been assured, however, that despite the current challenges the Fund remained broadly in line with the interim and longer-term target allocations for growth and cash with relative performance over the three-year period remaining positive.

The Chair thanked officers for the update with the following issues raised in response by the Board:

·            In response to concerns regarding the impact that any recession would have on the Fund, the Board were advised that due to the risk profile, longer-term scope and global nature of investments, public sector schemes were not likely to be as adversely impacted by a recession or the recent market volatility than private sector schemes.  Whilst recognising that investment performance would be negatively impacted over the short term as asset values were depressed the Board were advised that the Fund was still forecast to remain cash-flow positive with the ability to meet its obligations based on a robust Investment Strategy designed to minimise risk.

·            Confirmation was also provided that initial modelling for future cash-flow remained positive.

Members welcomed the report and with no further issues raised, it was RESOLVED to note the Q2 Investment Monitoring Update.

This report presents an update on progress against the Fund’s net zero transition roadmap.

The Board received a report providing an update on progress against the Fund’s net zero transition roadmap, Responsible Investment Policy and the LGPS Consultation on Governance and reporting of climate change risks, which it was noted had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.

Members welcomed the report and with no further issues raised, it was RESOLVED to note the update to the net zero roadmap, updated Responsible Investment Policy and LGPS Consultation on Governance and reporting of climate change risks, on which members were advised they would be welcome to submit comments for inclusion by officers as part of the final response to be provided on behalf of the Fund.

To receive the draft Pension Fund Annual Report and audited Annual Accounts for the year ended 31 March 2022.

The Board received a report providing an update on the Pension Fund Annual Accounts for the year ended 31 March 2022, which it was noted had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.

In considering the report the Board were advised that the latest Statement of Accounts and Annual Report (attached as Appendix 1 to the report) contained minor presentational and disclosure changes from those previously presented in July 2022 with the main audit fieldwork now also substantially complete and the anticipated results of the final Pension Fund audit which Grant Thornton (as the Council’s External Auditors) were undertaking being an unqualified opinion, as detailed within the draft Brent Pension Fund Audit Findings Report 2021/22 (attached as Appendix 2 to the report).

Whilst recognising that final sign-off of the Pension Fund accounts and audit findings had been delayed, the Chair felt it important to recognise this had not been linked to any issue with the Pension Fund accounts but a wider national accounting issue with officers thanked for the work undertaken to ensure the accounts had been completed and submitted within the necessary deadline.

Members welcomed the report and as no further issues were raised it was RESOLVED to note the report along with the Statement of Accounts included within the Annual Report and Brent Pension Fund Audit Findings Report 2021-22.

This report provides an update from the Fund Actuary to highlight the key changes being considered for the 2022 Funding Strategy Statement (FSS) review.

The Board received a report providing an update from the Fund Actuary that highlighted the key changes being considered for the 2022 Funding Strategy Statement (FSS) review being undertaken in compliance with the requirement for a formal valuation of the whole Fund to be undertaken every three years, under Regulation 62 (1) of LGPS Regulations, which it was noted had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.

Members welcomed the update and as no further issues were raised it was RESOLVED to note the report and key changes for the 2022 Funding Strategy Statement (FSS) along with the fact that the draft FSS would be subject to consultation with employers, as required by LGPS Regulations in advance of it being presented to the Brent Pension Sub-Committee for formal ratification at its next meeting in February 2023.

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

Prior to moving into the closed session of the meeting, the Chair took the opportunity to thank Rubia Jahlil (Finance Analyst Brent Council) for her support to the Board given this would be her final meeting as she moved on to take up a new role.  In addition, Andrew Phillips (Governance Team) was also thanked for his work to support the Board as he also moved on to take up a new role elsewhere within the Council.

The Board was also reminded of the requirement for all members to have completed their Pension Regulator Member Toolkit, if they have not done so during the past two years.

The press and public will be excluded from the remainder of the meeting as the reports 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 proceedings the Board RESOLVED that the press and public should be excluded 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).”

Having passed the above resolution the live webcast was ended at this stage of the meeting.

To receive an update on the 2022 valuation – whole fund results.

The Board received a report providing an update on the initial 2022 whole fund valuation results as at 31 March 2022, which it was noted had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.

In considering the report the Board were advised of the high level funding results, as detailed in section 3.4 of the report, which showed how (compared to the formal valuation in 2019) the funding position had improved based on liabilities having increased by £193m and asset values by £278m, meaning a reduction in deficit by £85m.  Members were also advised that the overall funding level had improved to 87% compared to 78% at the previous valuation and 55% at the 2016 valuation, with the increase reflecting the progress made in the overall financial health of the pension fund, higher than expected investment returns and improved data quality.

In recognising the progress being made in terms of the Funds overall financial health, the Board commended officers for their efforts, particularly in relation to the data cleansing exercise that had been undertaken to improve data quality and prudent approach towards manging the Fund’s long term Investment Strategy.

As no further issues were raised it was RESOLVED to formally note and welcome the progress made with the Fund valuation, Whole Fund results and improved funding position since the 2019 valuation.

This report presents analysis from the Fund’s actuary regarding the contribution rate strategy for the Council for the 3 years from 1 April 2023.

The Board received a report presenting an analysis from the Funds Actuary (Hymans Robertson) regarding the contribution rate strategy for the Council for the three years from 1 April 2023, which it was noted had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.

In considering the report the Board were advised of approach taken in relation to the review of the Contribution Rate Strategy which had been based on a modelling exercise for the stabilised employers within the Fund, including Brent Council, local authority schools and most academy schools in Brent.  Members were advised of the factors needing to be considered when setting contribution rates along with the need to take a balanced approach between the Fund’s need to maintain prudent funding levels and the employers’ need to maintain reasonably stable employer contribution rates as a means of managing any downside risk and avoiding any permanent fall in asset values.

The Board were advised that the process had led to a number of different contribution rate scenarios being modelled and reviewed with the recommendations made as a result in relation to the employer contribution rates over each of the next three years from 2023-24 to 2025-26, having been approved by the Pension Fund Sub Committee, as detailed within section 3.15 of the report.

In response to comments raised by the Board on the update, members were assured of the process undertaken to model the different contribution rate scenarios based around a range of future market and economic conditions and in terms of their impact on contributions and asset values, with the detailed results having been set out in the analysis provided by Hymans Robertson (within Appendix 1 of the report).

In recognising and welcoming the carefully designed nature of the approach recommended, the Board RESOLVED to note the report and to endorse the decision made by the Brent Pension Fund Sub Committee to approve the employer contribution rate for the next three financial years, as detailed within section 3.15 and Appendix 1 of the report.

To receive a report from the Director of Finance providing an update on recent developments regarding the Brent Pension Fund Investments held within the London CIV (LCIV).

The Board received a report, which provided the latest update on recent developments regarding the Brent Pension Fund Investments held within the London CIV (LCIV).  It was reported that the report had been considered in detail by the Brent Pension Fund Sub Committee on 5 October 2022.  The update included (as detailed in Appendix 1) the quarterly investment performance review of the following investments held by Brent, namely within London CIV Emerging Market Fund; London CIV Diversified Growth Fund, London CIV Absolute Return Fund and LCIV MAC Fund along with a summary of London CIV environmental, social and governance (ESG) activity.  Also included (as detailed in Appendix 2 of the report) was the LCIV quarterly investment review for private markets which included Brent’s investments in the following funds: LCIV Infrastructure Fund and LCIV Private Debt Fund along with valuation and performance data for the underlying portfolio.  As a final update members’ attention was drawn to the general updates provided by the London CIV (as set out in Appendix 3) in relation to investment, fund launches and fund monitoring and operational controls.

Having considered the update provided, the Sub Committee RESOLVED to note the reports and updates provided by London CIV.