Agenda and minutes

To note the attendance at this meeting of any duly appointed Reserve Members.

RESOLVED:  To note that there were no Reserve Members in attendance at this meeting.  

To receive declarations of disclosable pecuniary or non pecuniary interests, arising from business to be transacted at this meeting, from all Members present.

RESOLVED:  To note that Councillor Norman Stevenson declared a non-pecuniary interest in that he was a Director of Cathedral Independent Financial Planning Limited and had clients who were past and present members of the Harrow Pension Scheme.  Furthermore, he declared that his wife was a member of Harrow Council’s Pension Scheme.  He would remain in the room whilst the matters were considered and voted upon.

To consider the appointment of a Vice-Chair to the Pension Fund Committee for the Municipal Year 2024-2025.

RESOLVED:  That Councillor Nitin Parekh be appointed as Vice-Chair of the Pension Fund Committee for the 2024/2025 Municipal Year.

That the minutes of the meeting held on 4 April 2024 be taken as read and signed as a correct record.

RESOLVED:  That the minutes of the meeting held on 4 April 2024, be taken as read and signed as a correct record.

To note any public questions received.

Questions will be asked in the order in which they were received.  There will be a time limit of 15 minutes for the asking and answering of public questions.

[The deadline for receipt of public questions is 3.00 pm, 4 September 2024.  Questions should be sent to publicquestions@harrow.gov.uk  

No person may submit more than one question].

RESOLVED:  To note that no public questions were received at the meeting.

To receive petitions (if any) submitted by members of the public/Councillors.

RESOLVED:  To note that no petitions were received at the meeting.

To receive deputations (if any).

RESOLVED:  To note that no deputations were received at the meeting.

Report of the Strategic Director of Finance and Assurance

The Committee received a presentation on the preparation and planning timeline for the 2025 Valuation.

The Committee were informed that the outlook for 2025 showed an improving trend, with funding levels generally improving as compared to 2022.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received the Quarterly Actuarial Funding Position Update.

The report and appendix set out the interim funding level update of the London Borough of Harrow Pension Fund as at 30 June 2024 and showed how it had changed since the 2022 triennial valuation.  The last formal valuation was 31 March 2022. 

RESOLVED:  That the 30 June 2024 estimated improved funding position of 128% (March 2022 96%) be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received the Review of Pension Fund Governance Compliance Statement, which had been last reviewed in July 2023.

Whilst the Fund was largely compliant, the Committee expressed concern that the Fund was not fully compliant with Principle A.  The reasons were that the Council’s constitution did not provide for employers, other than the Council, to be represented on the Committee.  In addition, there was still an unfilled vacancy on the Pension Board.  However, the minor vacancies did not affect governance compliance.

RESOLVED:  That the updated Governance Compliance Statement be approved for adoption.

Report of the Strategic Director of Finance and Assurance

The Committee received the Review of Investment Managers’ Internal Control Reports, which contained some exempt appendices.

These provided a summary of the latest internal controls reports for the Fund’s investment managers.  The reports had been reviewed and showed that controls were operating effectively, and that, where exceptions had been identified, there had been a satisfactory management response.

The Committee asked whether and updated report from La Salle had been received, and were advised that this had been sought, and a response from La Salle was awaited.

RESOLVED:  That the reports be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received the Review of Pension Fund Risk Register.

The report set out the updated Pension Fund Risk Register as at 30 June 2024.  The following were identified:

·                 Amber risk (1): the description had been modified to reflect the date for Pension Dashboards for the LGPS having been set at September 2025);

·                 New amber risk (14): was added in respect of the potential risk of a cyber security attack on the Council’s or the Fund’s data systems;

·                 New Amber Risk 15: data protection breach (previously green risk 23), the risk had been escalated because of the risk of human error in bulk mailing processes;

·                 One green risk (G2): related to the Public Sector Exit Cap was removed as the exit cap legislation has been suspended; and

·                 The wording of a number of “green” risks had been updated to reflect the latest developments, including review dates following the 2025 triennial valuation.  The scoring of these risks was unchanged.

RESOLVED:  That the changes to the Risk Register, as summarised above, be agreed.

Which cannot otherwise be dealt with.

RESOLVED:  That the following three urgent items be considered for the reasons set out on the supplemental agenda:

a)              Update on London CIV and Investment Pooling Arrangements;

b)              Investment and Managers Performance Review; and

c)              Investment Management Consultant Objectives.

Report of the Strategic Director of Finance

The Committee received the Update on the London CIV and Pooling Arrangements, which contained an exempt appendix.

The report updated the Committee on the current position of the Fund’s investments in the context of the Government’s requirements for pooling and on current developments within the London CIV.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

The Committee received the Investments and Managers Performance Review, which contained exempt appendices.

The report updated the Committee on the investment and managers performance for the quarter ending 30 June 2024.  The Fund returned 1.3% net of fees over the quarter to 30 June 2024, underperforming the benchmark by 0.8%.  The market value of investments increased by £7.40m to £1.063bn.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

The Committee received the Investment Management Consultant Objectives. These were similar to those of the previous consultant.  An exempt appendix set out the precise terms.

RESOLVED:  That the report be approved.

To resolve that the press and public be excluded from the meeting for the following item of business, on the grounds that it involves the likely disclosure of confidential information in breach of an obligation of confidence, or of exempt information as defined in Part I of Schedule 12A to the Local Government Act 1972:

RESOLVED:  That in accordance with Part I of Schedule 12A to the Local Government Act 1972, the press and public be excluded from the meeting for the following item(s) for the reasons set out below:

Report of the Strategic Director of Finance and Assurance

The Committee received confidential appendices 1 and 2 of the Review of Investment Manager’s Internal Control Reports.  The main report had been considered elsewhere on the agenda.

RESOLVED:  That the appendices be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received the confidential Investment Strategy Statement Update.

RESOLVED:  That the statement be noted.

Report of the Strategic Director of Finance and Assurance

Dean Bowden, the Chief Executive of London CIV, gave a presentation to the Committee on a number of matters, including its arrangements for monitoring and reviewing the underlying investment managers’ performance and recent and pending staffing changes at the London CIV.

The Committee asked questions of Mr Bowden and received a confidential appendix to the London CIV and Pooling Arrangement Update, whose main report had been considered elsewhere on the agenda.

RESOLVED:  That the appendix be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received the confidential Quarterly Performance Investment Monitoring Report and discussed this in detail.

In particular it considered the issue of rebalancing.  Officers indicated that this would be reviewed.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received the Introduction to Investment Adviser Report and considered its priorities in regard to the Fund’s investments.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance and Assurance

The Committee received a confidential appendix to the Investment Management Consultant Objectives, whose main report had been considered elsewhere on the agenda.

It was agreed that the Investment Consultant should monitor the London CIV as well as the underlying sub-managers.

RESOLVED:  That the appendix be approved and sent to the new Consultants, Mercer, for their comments.

Report of the Strategic Director of Finance and Assurance

The Chair requested officers to draft a letter of appreciation to the previous investment consultants, Aon, for their professional advice during their time advising the London Borough of Harrow Pension Fund.

Separately, the Committee thanked the Interim Pension Fund Manager, Miriam Adams, for her professional work and dedication during her time managing the fund, as this would be her last meeting before she joined another London Borough Council.