Agenda item

The purpose of this report is to outline the business plan for the Fund for the next 12-18 months prepared by the Fund’s investment advisors, Hymans Robertson.

Sawan Shah (Senior Finance Analyst) introduced the report, outlining the business plan for the Fund for the next 12-18 months prepared by the Fund’s investment advisors, Hymans Robertson LLP. It was explained that the Fund’s principle long-term objective was to provide retirement benefits to its members and the Fund invested its assets in order to meet this objective. The overarching investment strategy remained to establish a stable and affordable contribution rate alongside maximising return from investments at appropriate risk levels.

The key priorities within the Fund’s Business Plan over the next 12-18 months were noted below:

·                Strategy and Implementation

·                Monitoring and Reporting

·                Pooling – including progress and timetable

·                Responsible Investment

·                Governance

·                Training

·                Other – cross-practise carried out in financial quarters. 

Kenneth Taylor (Hymans Robertson LLP Investment Consultant), then provided further detail on the Pension Fund Business Plan to the Committee, with the key issues noted below:

·                It was updated that an actuarial valuation was being carried out this year, and when this was completed the investment strategy would be evaluated. This would involve analysis of how the Fund’s investments were allocated. Once this had been completed, there would be a more detailed review of the current investment strategy including the equity allocations towards property and Carbon/ESG tilted Funds.

·                The strategy review also sought to build the Fund’s property allocation over the next period, which had already begun recently. Additionally, the London CIV was launching a UK Property Fund, specifically within the residential housing sector. This was an opportunity that was being explored, with a view to investment in the future.

·                It was stressed that the Plan was a live document, and that progress reports would be provided to the Committee to analyse how the investments within the Fund were balanced.

·                Responsible investment (RI) was highlighted as a key issue for the Fund going forward. It was expected that reporting would have to be in line with TCFD (Task Force on Climate-Related Financial Disclosures) regulations, and reporting the carbon metrics of the Fund’s investments, in line with the London CIV approach.

·                The Committee were updated on the Fund’s Net-Zero target, and the prospective dates to reach this. The UK Government had set a target of becoming Net-Zero by 2050, whilst Brent Council had set a target of 2030. The Committee would be required to engage in further consideration and discussion regarding the Fund’s Net-Zero date at a future meeting.

The Chair thanked Kenneth Taylor (Hymans Robertson LLP) for their presentation and members were then invited to ask questions, with the responses summarised below:

·                It was confirmed that the Committee would have the opportunity to further consider and review the outcome of the Strategic Investment review to be completed once the actuarial valuation had been finalised with implementation to be undertaken on a transitional basis.

·                In terms of future targets to be included as part of the Investment Strategy review, including those relating to the climate metrics and net zero, assurance was provided that these would be matters for review and consideration in order for an informed choice to be made by the Committee prior to them being agreed, with the previous targets having been set in February 2020.

As no further issues were raised the Sub Committee again welcomed the update provided and RESOLVED to note and endorse the Business Plan.