Agenda and minutes

No apologies 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.

The Chair, David Ewart, declared a personal interest as a member of the Chartered Institute of Public Finance and Accountancy (CIPFA) and as a member of another local authority pension fund.

To approve the minutes of the previous meeting held on Wednesday 22 March 2023 as a correct record.

The minutes of the previous meeting held on Wednesday 22 March 2023 were agreed as an accurate record.

To consider any matters arising from the minutes of the previous meeting.

A correction regarding the previous minutes was raised, in which members were advised that the dates for future meetings were 8 November 2023 and 25 March 2024, a meeting was not being held on 25 February 2024

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 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 Board were informed that the report was divided into three sections, ‘Pension Administration Performance Update’, ‘Annual Benefit Statements’, and ‘Regulatory Projects’, which would be addressed in turn. It was explained that the data covered January to March 2023 and therefore was slightly out of date at the time of the meeting.  In addition to the Pension Board meetings, members noted that officers and LPP held monthly meetings to review performance and address any issues.

The Board were advised that performance during the quarter, as stated in the previous Pension Board meeting in March, was challenging due to the UPM migration. However, performance was highlighted as improving and members were reminded of the temporary SLA’s agreed due to the UPM migration. In concluding their introduction, Sawan Shah detailed the increase in complaints spanning February to May 2023, with 33 new complaints received since the last Pension Board meeting. Out of the 33 cases, 17 related to delays, 15 related to general service and 1 related to payment. It was acknowledged that the number of complaints were high compared to the historical average, which were mainly due to the challenges in performance following the system migration.

Following the introduction of the report, the Chair welcomed John Crowhurst from Local Pensions Partnership Administration (LPPA), the Council’s administration service provider, who provided a verbal update regarding recent pensions administration performance, with the update summarised below:

• The average percentage of cases processed on time was 97% during May, 97% during June and 96% during July. The performance for May to July was above the contractual SLA target of 95% and was largely attributed to clearing historical spikes in workload arising from the UPM migration, with performance now expected to stay around the 95% target.

• The Board were informed that the percentage of retirements active cases currently being processed on time was 90%. LPPA recognised that further improvements could be made in this area, but it was highlighted that the number of retirements active cases were comparatively low meaning that a small drop in performance greatly impacted performance percentages.

• 80% of bereavement cases were currently being processed on time, with cases that included a beneficiary being prioritised.

• The Fund had a significant increase in its Helpdesk wait times with performance of 10 minutes 29 seconds in January, 10 minutes 4 seconds in February and 6 minutes 19 seconds in March, all of which were above the target time of 4 minutes. However, since implementing a new call handling system in March which improved call routing and providing additional training to staff, call times had decreased in recent months assisted by a reduction in call volumes compared to earlier in the year.

• Regarding The Pension Regulator (TPR) data scores, as at 31 March 2023, common data had a total accuracy rate of  ...  view the full minutes text for item 5.

The Chair’s Annual Report to the Pension Board for 2022/23 provides an update on the work carried out by the Board during the year.

The Chair presented a report that reviewed the work carried out by the Board throughout the last year. To begin, the Chair thanked members and officers for their work and commended the following achievements of the Board during 2022/23:

• The excellent response of officers and partners to the demands of the Triennial Valuation, including the encouraging results.

• The level of service provided, and quality of the data maintained on the funds membership, despite the disruption caused by upgrading the administration system.

• The issuing of annual benefit statements to all members before the statutory deadline of 31st August 2022.

The Chair advised that the above achievements had been repeated in error within section 3.3 of the report, covering issues that required focus looking forward.  As a result, the Board was advised that whilst 2022/23 had been recognised as a good year, there were a number of issues identified as needing to be addressed looking forward, which were recognised as follows:

• The level of service being provided to the members of the fund which, although generally within target, still had some areas that required improvement.

• The quality of the data held which, although greatly improved, still required additional work.

• Although the level of funding for the 2022 Fund Valuation showed an improved level of funding, standing at 87% which was up from 78% in 2019 and 55% in 2016, this was still considered low.

In thanking the Chair and officers for their work during a challenging year, the Board RESOLVED to note the report.

This report presents the revised Communications Policy for the Brent Pension Fund. 

George Patsalides (Finance Analyst, Brent Council) presented the report, which provided the Board with the revised Communications Policy for the Brent Pension Fund. It was explained that the Communications Policy was designed to ensure that all key stakeholders were kept informed of developments within the Pension Fund and through the appropriate medium. As the Policy was last updated in 2019, it was deemed an opportune time to update the statement, with officers considering any relevant changes within the LGPS in addition to providing further clarification on employer responsibilities. The Board noted that the full Policy was attached in Appendix 1 of the report, with the following changes to the document:

• Updates had been made throughout the document to account for the move from Altair to Civica’s UPM and LPPA’s PensionPoint self-service.

• An update had been made to include Section 7, which listed relevant staff contact details for members to direct queries and receive support.

The Chair then welcomed contributions from members, with the subsequent questions and comments raised:

• In response to a question regarding the responsibility for implementing the Communications Policy, the Board were advised that the main responsibility fell within the Finance team.

• Members highlighted that some sections of the document still referenced the old Altair system, with officers reassuring the Board that required corrections would be made.

With no additional comments from members, the Board RESOLVED to note the updated Communications Policy outlined in Appendix 1 of the report.

This report presents the revised Pensions Administration Strategy for the Brent Pension Fund. 

George Patsalides (Finance Analyst, Brent Council) introduced a report that detailed the revised Pensions Administration Strategy for the Brent Pension Fund. The aim of the strategy was to ensure that both the Fund and its employers were fully aware of their responsibilities under the Scheme and to set acceptable levels of performance. The Strategy was last updated in 2021 and thus it was necessary to review the document to ensure it was best placed to achieve its aims. As the delivery of the administration service relied on joint working between a number of stakeholders, the Board heard that it was imperative that the Fund consulted with stakeholders to promote good working relationships, improve efficiency and ensure agreed standards. Consequently, consultation would commence following the Board meeting, in which a draft strategy would be sent to employers and presented at the employer forum in November 2023 for feedback. In concluding their introduction, George Patsalides outlined the key changes to the Strategy:

• An update had been made to Section 3.3, Administering Authority Functions, which outlined the new KPIs and timescales to which tasks must be completed.

• Updates had been made throughout the document to account for the move from Altair to Civica’s UPM and LPPA’s PensionPoint self-service.

• An update had been made to Section 4, Staff Charging Schedule, to reflect inflation as well as updated costing measures.

Following the introduction of the report, the Chair opened the discussion to Board members, with questions and responses summarised below:

• In providing the context as to why the Fund had not levied charges against employers for non-compliance, the Board were advised, as explained within the report, that the preferred approach was to work with and support employers through additional training and engagement and the levying of fees therefore regraded as a last resort.  It was, however, retained as a measures that could be used within the Strategy and formed part of The Pension Regulator’s best practice guidance.

• Regarding consultation on the Strategy, the Board noted that the main stakeholders were employers, who were being consulted through a number of methods, with the other stakeholders largely being members of the Pension Board.

With no further contributions from members, the Board RESOLVED to note the revised Pension Administration Strategy and planned consultation with employers.

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

Carlito Rendora (Finance Analyst, Brent Council) presented the report, which updated the Board on the Risk Register, attached as Appendix 1 of the report, for the Brent Pension Fund Pensions Administration Service. The Board were advised that no new key risks were added to the Register and updates to the document were detailed in paragraph 3.6 of the report, which included renaming the impact of covid-19 to the impact of future pandemics and updating review dates.

In thanking Carlito Rendora for the overview, the Chair welcomed questions and contributions from Board members. Contributions, questions, and responses were as follows:

• The Board commented that the risks to the Fund were comparatively lower than corporate risks to the Council, with the highest risk relating to annual benefit statements.

• Regarding the impact that strikes would have on the Fund, the Board were advised that cash flow may be impacted in the short term, however, the long-term impact would be minimal. Furthermore, it was explained that strike action would not count towards an individual’s pension contributions unless it was bought back, which was optional. Potential impacts on an individual’s pension could be explored using LPPA’s online pension calculator.

• In response to a query concerning how employers managed data security, members were informed that employers had their own risk registers regarding data security. However, the Fund could consider asking employers to evidence their data security requirements.

• Regarding potential risks arising from Artificial Intelligence (AI), the Board heard that the private sector often led on technological innovations such as AI, although the Fund and LPPA were planning on implementing further automation to assist with common queries from Scheme members and to direct customers to self-help guidance.

• In response to a question on the impact that pension opt-outs had on the Fund, it was explained that officers regularly undertook cashflow modelling to review the impact of changes within the membership. Officers had noticed that since the cost-of-living crisis there had been an increase in opt-outs, however, the number of opt-outs were relatively small and the impact was not considered as significant.

• Officers noted the comments by the Board regarding references to the old Altair system.

• In response to a query concerning the necessity of including the risk relating to future pandemics and the suggestion of including risks relating to climate change, members were advised that the impacts of covid-19 were still ongoing and thus it was recommended to include the risk relating to pandemics. Officers also noted the suggestion on including risks relating to climate change.

The Board welcomed the report and as no further issues were raised it was RESOLVED to note the update including the key changes set out in section 3.5 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.

Sawan Shah introduced a report that provided 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:

• On 30 March 2023, the Department of Work and Pensions (DWP) published its 2023 review of the State Pension age. The State Pension age was currently age 66 and was planned to rise to age 67 between 2026 and 2028, before rising again to age 68 between 2044 and 2046.

• On 29 March 2023, the Scheme Advisory Board (SAB) published a report on the gender pensions gap in the LGPS from the Government’s Actuary department. The report provided an initial overview of the gender pensions gap in the LGPS, based on data from the 2020 scheme valuation. The report showed that the difference between men and women as to their accrued benefits in the Local Government Pension Scheme was 34.7% for benefits in the reformed CARE scheme and 46.4% for benefits in the legacy final salary scheme (in favour of men). However, the Board noted that the findings needed to be interpreted with caution and further work would be undertaken to understand the data and investigate causes, in addition to considering possible next steps.

• The Department for Levelling Up, Housing and Communities (DLUHC) published its consultation on proposals relating to the investments of the LGPS on 11 July 2023. This consultation sought views on the areas of asset pooling, levelling up, opportunities in private equity, investment consultancy services and the definition of investments. The Board were informed that a summary of the proposals was included in Appendix 1 of the report and the consultation would close on 2 October 2023.

Following the update, members were invited to raise any comments or questions, with questions and responses summarised below:

• The Board requested that a report regarding the consultation on the proposals relating to investments be presented at the next Board meeting on 8 November.

• Regarding the impact that the increase of the state pension age would have on the Fund, members were informed that the Pension Scheme was linked to the state pension age, meaning that an increase in the state pension age increased the date on which members were entitled to an unreduced pension.

• In response to a request to annually update the Board on the gender pension gap, the Board were informed that officers could explore the obtainability of the data and if accessible then updates could be provided. If the data could not be obtained, members would be updated when possible, using data from the Scheme Advisory Board.

• In light of the Government proposal to require a 10% allocation in UK private equity, the Board heard that the Fund were currently running down their allocations in private equity and no new allocations had been made in recent years. If the proposals were to be enacted, the Fund would have to re-evaluate its investment  ...  view the full minutes text for item 10.

To receive the Brent Pension Fund Q1 2023 Investment Monitoring Report.

Before moving on to remaining items on the agenda the Chair reminded Board members that agenda items 11, 12, 13, 14, and 17 were reports referred to the Pension Board for information following their consideration at the Brent Pension Fund Sub-Committee.

The Board received an update on the Brent Pension Fund Quarter 1 Investment Monitoring Report, which reviewed the Fund’s performance over the first quarter of 2023. Members noted that the key headline was that the value of the Fund increased by 2.7% over the quarter, largely due to the strong performance in global equities. Performance over a 3 year period was also said to be positive, outperforming the benchmark and growing 8.7%.

In noting that the report had been subject to detailed review at the Brent Pension Fund Sub Committee on 27 June 2023 and covered monitoring performance up to 31 March 2023, the Board RESOLVED to note the Quarter 1 Investment Monitoring Report without any further detailed comment.

This report provides the Board with an update on the steps taken to transition to the investment strategy agreed at the 20 February 2023 Brent Pension Fund Sub-Committee meeting.

The Board received a report which provided an update on the steps taken to transition to the investment strategy agreed at the Brent Pension Fund Sub-Committee meeting on 20 February 2023 In response to a query regarding targets to reduce carbon emissions, the Board were advised that the Fund was undertaking a market review of its main global equity holding to determine whether the Fund could continue to access global equity markets whilst also achieving a reduction in its carbon emissions. A workshop with Sub-Committee members was planned to develop a framework with the view of selecting one or two funds to replace the current LGIM global equity mandate.

With no further issues raised it was RESOLVED to note the update as presented to the Brent Pension Fund Sub Committee on 27 June 2023.

This report presents to the Board the draft Pension Fund Annual Accounts for the year ended 31 March 2023.

The Board received a report that presented the draft Pension Fund Annual Accounts for the year ended 31 March 2023. The Board were informed that total contributions received from employers and employees was £68m for the year, an increase on the previous year’s £64m. Moreover, total benefits paid to scheme beneficiaries, in the form of pensions or other benefits, was £48m, an increase on the previous year’s £47m. Overall, the pension fund was in a positive cash-flow position because its contributions exceed its outgoings to members. To conclude the update, members were advised that the accounts had not been formally published, with auditors currently undertaking fieldwork. Although no issues had arisen at the time of meeting from the fieldwork, the Board would be informed once the audit had been completed, with the approval of the accounts resting with the Council’s Audit and Standards Committee.

Following the update, members were given the opportunity to raise any comments or concerns, with questions and responses summarised below:

• In response to a question concerning whether there had been an increase in requests for early drawdown and what impact this had on the Fund, members heard that an increase in early retirements occurred at the start of the pandemic, but the cost-of-living crisis was now likely delaying retirement for many. The Board also noted that upon early retirement yearly payments were reduced to reflect the payments occurring over a longer period of time. Whilst recognising that a large increase in early retirements would negatively impact the Fund’s cashflow position, officers regularly monitored cashflow and the likely impacts of numerous scenarios. Thus, the current impact of early drawdowns was not significant.

In thanking the efforts of the Finance team for ensuring that the Fund’s accounts were successfully submitted for audit on time, the Board RESOLVED to note the report.

This report updates the Board on engagement activity undertaken by LAPFF (the Local Authority Pension Fund Forum) on behalf of the Brent Pension Fund.

The Board received an update on engagement activity undertaken by the Local Authority Pension Fund Forum (LAPFF) on behalf of the Fund. It was explained that the Fund’s commitment with LAPFF and its work demonstrated commitment to Responsible Investment and engagement as way to achieve its objectives.

The Board RESOLVED to note the update provided without any further comment

To note that the dates of the Pension Board meetings for the 2023/24 municipal year are as follows:

·       Wednesday 8 November 2023 at 6:00pm

·       Monday 25 March 2024 at 6:00pm

The Board noted that the provisional dates for the next meetings were as follows, with meetings (at this stage) scheduled to continue online:

• Wednesday 8 November 2023 at 6pm
• Monday 25 March 2024 at 6pm

The press and public will be excluded 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 and particular person (including the authority holding that information).”

At this stage in proceedings the Pension Board was asked to consider whether they wished to exclude the press and public for consideration of the final report on the agenda. Given the following item had been submitted for information and it was felt that it 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.

This report updates the Board on recent developments regarding Brent Pension Fund investments held within the London CIV (LCIV).

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

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

Before closing the meeting, the Chair requested that officers explore whether future dates of meetings could be planned around the monitoring periods of quarterly updates to ensure that the data was more recent and therefore relevant.