Agenda and draft minutes

Apologies for absence were received from Councillor Colleen Sullivan and Councillor Kaushik Banerjee.

None.

RESOLVED: It was agreed that the minutes of the meeting on 3 June 2025 be confirmed as an accurate record.

It was confirmed that agenda items 5 – 9 would be considered in Part I and agenda items 10 – 13 would be considered in Part II.

The Director of Pensions, Treasury & Statutory Accounts introduced the Pensions Administration & Performance report.

It was reported that membership had increased by 17.8%, and all administration cases had met their SLA targets. Portal registration had risen to 53.56%, although 47% of members remained unregistered. Deferred and active benefit statements were delivered on time and the backlog of over 4000 government leave cases was reduced to just 42. Communications were high, with over 3000 calls and 200 digital messages handled. Issues with Capita’s new dashboard were expected to cause delays of up to six weeks for all customers however HPS monitored the situation weekly. The team had received six compliments and one complaint, which related to a rejected £30,000 fund transfer due to the absence of the required professional financial advice.

RESOLVED: That the Pensions Committee noted the administration update.

The Director of Pensions, Treasury & Statutory Accounts introduced the Investments Strategy and Fund Manager Performance report and highlighted the dashboard produced collaboratively by officers.

It was reported that the funding level rose from 128% to 136%, resulting in a £380 million surplus, though this assumed 20 years of continued funding. Liabilities decreased by £20 million, and assets increased to £1.46 billion, a 3.96% rise in market value. Despite strong returns, the fund remained near the bottom of league tables. One year and five year returns were slightly below benchmark, while long-term performance aligned with expectations.

Members queried why the fund had only just met its benchmark following years of underperformance and asked what changes had been made or were planned to improve and stabilise returns for long-term sustainability. It was explained that the fund’s performance was mostly in line with benchmarks due to a large portion being invested passively and options to improve returns were being considered based on risk appetite.  Active managers had struggled because the market was unstable and the benchmarks they used were outdated, especially for fixed income and equity investments. It was also difficult to review certain assets every quarter. The need to spread investments across different areas and improving future performance was emphasised.

RESOLVED: That the Pensions Committee noted the funding and performance update.

The Finance Manager - Pensions & Governance introduced the item on the Responsible Investments Update.

The report provided information on how managers entrusted with the investing Pension Fund assets were implementing their Environmental, Social and Governance (ESG) policies and demonstrated their commitment to ensuring it was a cogent part of their investment process.

Members heard about two managers who were active in voting and engaging with companies. The London CIV working through a partner, voted on 3929 issues, supporting 84%, voting against 10.4%, and choosing not to vote on 5.5%. The other manager, Legal and General Investment Management, took part in over 8000 meetings and voted on almost 89,000 issues, supporting 75%, opposing 24.8%, and abstaining just 0.1% of the time. Examples of their work with companies like BP and Hershey were noted and the importance of responsible investment practices across environmental, social, and governance areas was emphasised.

Two main points were raised by members. First, it was requested that future reports include reasons for votes against resolutions such as environmental, social, governance, or pay-related concerns so that clearer insight could be given to the Committee. Second, a post-meeting update was asked for regarding the pension fund’s position on investments linked to Palestine, Gaza, Israel, and illegal settlements, due to concerns from the public and pensioners and guidance from the UN.

It was confirmed that advice on the matter was being sought and would be shared with Members once available. It was noted that a summary of fund managers’ voting patterns would be included in the next paper.

RESOLVED: That that the Pensions Committee:

1.    Note the fund managers’ ESG activities and compliance efforts.

2.    Note LCIV & LAPFF activities.

The Finance Manager - Pensions & Governance introduced the item on the Risk Register Report.

The Committee heard how pension fund risks were categorised and managed, with 14 risks split into six “closed” risks that were under control and eight “active” risks being monitored. There had been no changes in classification since the last meeting. The most significant active risk was liquidity for member payments, which was being managed daily through cash flow forecasting, and the fund was currently in a stable position.

RESOLVED: That the Pensions Committee:

1.    Consider and agree the Risk Register in terms of the approach, the specific risks identified, and the measures being taken to mitigate those current risks.

2.    Note the revised format and agreed the retired risks and those which remained open.

The Committee considered the Governance report which included the work plan and governance updates. The workplan outlined future discussion items and included an updated appendix and rescheduled policy review dates. 

It was noted that most Members were on track, while new Members on the Committee were still in the early stages of getting up to speed. Key policy reviews and statements were scheduled for future meetings and the timeline for compliance with the General Code of Practice was moved to March 2026 due to changes in the cyber and EDI policies.

Officers were thanked for their ongoing work and advance notice of upcoming training sessions was requested to help members plan and meet their required hours. It was confirmed that training opportunities would continue to be communicated and the next session on the investment strategy was expected before the next committee meeting.  It was noted that the London CIV would be providing member training as part of its updated service offering from 2026/27.

RESOLVED:  That the Committee:

1.    Note the dates for Pensions Committee meetings.

2.    Made suggestions for future agenda items, working practices and / or reviews.

3.    Note Committee’s Continuous Professional Development update

4.    Note GCoP Update

RESOLVED: That the Committee agreed the Part II minutes from the meeting on 3 June 2025 as an accurate record.

This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985.  This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act).

RESOLVED: That the Committee noted the recommendation as detailed in the confidential report

This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985.  This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act).

RESOLVED: That the Committee noted the recommendation as detailed in the confidential report.

This item was discussed as a Part II item without the press or public present as the information under discussion contained confidential or exempt information as defined by law in the Local Government (Access to Information) Act 1985.  This was because it discussed ‘information relating to the financial or business affairs of any particular person (including the authority holding that information)’ (paragraph 3 of the schedule to the Act).

RESOLVED: That the Committee noted the recommendation as detailed in the confidential report.