Agenda and minutes

There were no apologies, all Members of the Board were present.

Councillor Olszewski declared, that in the interest of transparency he was a London Pension Fund Authority (LPFA) Board member and that it was not connected to the work of this Board.

Vinothan Sangarapillai declared that he was an active member of the Camden pension scheme. 

Broadcast of the meeting

The Chair announced that,  

“In addition to the rights by law that the public and press have to record this meeting, I would like to remind everyone that this meeting is being broadcast live by the Council to the Internet and can be viewed on our website for twelve months after the meeting. After that time, webcasts are archived and can be made available upon request. 

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If you are seated in the Committee Room or participating via Teams, you are deemed to be consenting to having your contributions recorded and broadcast, and to the use of those sound recordings and images for webcasting and/or training purposes.”

There was no urgent business.

To approve and sign the minutes of the meeting held on 28^th March 2023.

RESOLVED –

THAT the minutes of the meeting held on 28^th March 2023 be agreed and signed as an accurate record. 

To note the Pension Board Terms of Reference.

RESOLVED  

THAT the terms of reference for the Pension Board be noted. 

Report of the Executive Director Corporate Services

The Pension Board has responsibility for assisting the Pension Committee in ensuring compliance with the Scheme Regulations, other legislation relating to governance and administration, and the requirements of the Pension Regulator. The Pension Board must also ensure the effective and efficient governance and administration of the scheme. This report summarises the items presented and decisions made at the Pension Committee meetings on 24 July 2023 and 20 September 2023.

Consideration was given to a report of the Executive Director Corporate Services that provided a summary of the reports and decisions made at the preceding Pension Committee meetings. The individual reports had been published on the Council website and links had been included in the update report.  

The Pension Board commented on the following reports that had been considered by the Penson Committee: the Quarterly Engagement Report; Investment Strategy Review and the Performance Report.

Comments from the Board during considerations of the reports included:  

·       What were the implications for the performance of funds given the  financial turbulence of the last eighteen months? Would the Pension Committee continue to closely monitor and have oversight of the underperformance of the fund?  

·       What consultation had there been on the pooling of assets in the investment pools? 

·       The monitoring of the London Sub Fund/Equity Fund, the scoring criteria and framework and whether there was a need for enhanced monitoring.  

·       Had Pension Committee members continued to participate in the  training opportunities for their roles on the committee?

·       The unusual timing of the Government consultation on investment pooling.   

In response to points raised:

·       Assurance was given that investment managers would continue to  look at market trends in detail and would advise the Pension Committee of any concerns about the market or fund performance. There had been due diligence of the decision making of the London CIV, which would continue to be monitored. It was also explained that in instances where the pooling of investments had not been mandated there was an option for the authority to make investments elsewhere, outside of the pool and that this would provide flexibility for the authority in the investments it wanted to make.        

·       The Government had published a consultation document on pooling in July that had included asset pooling, levelling up, opportunities in private equity, investment consultancy and investment definitions. It was commented on that it would be interesting to assess these proposals in the next eighteen months.

·       Attendance at training of Pension Committee Members was an area of interest for the pensions regulators and that it was possible to determine which training modules had been completed.   

RESOLVED –

THAT the report be noted.

Report of the Executive Director Corporate Services

This report presents an update to the risk register for the Pension Fund, with an action plan stating how risks will be managed.

The Pension Committee, at its meeting on 24th July 2023, noted the contents of the report.

Consideration was given to a report of the Executive Director Corporate Services that provided an update to the Pension Fund risk register. The report had included an action plan setting out how risks would be managed, that there had been a reduction in fund risks and how consideration of these risks had helped to enhance and evaluate decision making.    

RESOLVED  

THAT the report be noted.

Report of the Executive Director Corporate Services

This report presents the results of an investment strategy review by our Investment Consultant, Isio, on the Fund’s strategic asset allocation.

Consideration was given to a report of the Executive Director Corporate Services that provided the results of an investment strategy review by our Investment Consultant, Isio, on the Fund’s strategic asset allocation. The summary of the review to the Board included:

·       An analysis of the risk of inflation,

·       An analysis of equity risks,

·       The identification of alternative investment strategies and revised investment beliefs as set out in table 3 of the report and as agreed by  the Pension Committee.

The Board discussed the recommended approach for rebalancing risks and protecting the security of assets, how the investment beliefs would map across to the Council’s priorities, the balance of cash in the investment portfolios and reducing equity allocations.   

RESOLVED

THAT the following recommendations agreed by the Pension Committee be noted:

1.    The revised Investment Beliefs (Table 3 of the report)

2.    To change the target asset allocation to that recommended in the High Impact strategy (Appendix A) by (all percentages are proportions of overall Fund assets):

a)    reducing the equity allocation by 10% by decreasing assets with the active equity managers, Baillie Gifford and Harris,

b)    increasing investment in multi-asset credit by 3%

c)    increasing investment in index-linked gilts by 4%

d)    reducing investment in commercial property by 4%

e)    increasing investment in infrastructure by 5%

f)      adding a new asset allocation in affordable housing of 5%

3.    To delegate all matters connected with the implementation of the above changes to the Executive Director Corporate Services, in consultation with the Chair of the Pension Committee.

Report of the Borough Solicitor

This report sets out proposed minor changes to the wording of the Terms of Reference of the Pension Committee to reflect the Committee’s commitment to environmental, social and governance (ESG) issues.

Consideration was given to a report of the Executive Director Corporate Services that set out the proposed minor changes to the wording of the terms of reference to reflect the committee’s commitment to environmental, social and governance issues.

RESOLVED

THAT the report and minor changes to the Pension Committee terms of reference be noted.

Report of the Executive Director Corporate Services

This report brings Members up to date with engagement activity undertaken by the Fund and on its behalf by LAPFF (the Local Authority Pension Fund Forum) since the last Committee meeting. This work is important to the Fund’s ambition to be a fully engaged investor and demonstrates its commitment to Responsible Investment and engagement in Environmental, Social and Governance (ESG) issues as the Fund works to maximise returns on investment.

The Pension Committee, at its meeting on 24 July 2023, noted the contents of the report.

Consideration was given to a report of the Executive Director Corporate Services that provided an update on the engagement activity undertaken by the Fund and on its behalf by LAPFF (the Local Authority Pension Fund Forum) since the last Pension Committee meeting. The Pension Board was provided with an explanation of the split voting and how this had been a significantly positive development, after many years of lobbying, that would allow the authority to apply its voting intentions on specific investments instead of voting as part of a pool. 

RESOLVED 

THAT the report be noted.

There was no such business.

To note that the next meeting of the Board will take place at 3pm on Tuesday 16^th April 2024.  

It was noted that the next meeting of the Board was scheduled to take place at 3pm on Tuesday 16^th April 2024. The Chair commented and it was noted that an alternative date may need to be considered.