Agenda and minutes

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 there were none.

That the minutes of the meeting held on 30 July 2024 be taken as read and signed as a correct record.

RESOLVED:  That the minutes of the meeting held on 30 July 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, Monday 9 December 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 put or petitions or deputations received.

Report of the Strategic Director of Finance

This report provided the Board with information that related to the administration performance of the Fund over the quarter ending 30 September 2024.  The presenting officer highlighted the following:

·                 Performance had dipped to 58% from 79% in the last quarter, this was due to a number of vacancies.  However, this had recently changed with the addition of new team members.  Performance was expected to improve with better stability.

·                 A new payroll system was successfully implemented; however, a few pensions officers were designated to this project which impacted the team’s performance.

·                 There had been an issue of late benefit statements.  However, this issue was not repeated and were issued by the deadline of 31 august 2024, there were no breaches nor any new complaints.

During the discussion, the following key points were highlighted:

·                 It was noted that the performance of the pension team had been decreasing for some time and that the Board would like to see the performance increase.

·                 The Board asked whether there were still vacancies within the pension team.  To which an officer explained that two vacancies remained and offered to provide the board a structure chart to the board.  It was further explained that there was a shortage of pension administrators at a national level.

·                 Asked how life certificates were be checked, an officer explained that they would need to gather this information and circulate it to the Board. 

·                 Asked how many people were in the pension team at Harrow |Council, the officer explained that he would find this information out for the Board and report back.  Concern was raised over the size of the pension team and wondered if the team was big enough as the Board was not happy with the level of performance.

·                 It was raised that Pensioners should be able to use the payroll system to access payslips/p60s.

·                 Congratulations were given on meeting the deadline for the benefit statements.

·                 The dashboard being pushed back to October 2026 was of concern.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

This report updated the Board on the new Pensions Regulator (TPR) Code of Practice (“the Code”) issued on 10 January, which came into effect from 28 March 2024.  This set out in detail what The Pensions Regulator expected of a scheme that was required to maintain an effective system of governance and internal controls.

The officer highlighted that a gap analysis would need to be produced and subsequently an action plan made to address these.  With a report expected to be presented to the Board in March 2025.

During the discussion it was asked when Harrow Council’s Compliance Progress Review would be completed.  The officer explained that this would be presented to the Pension Fund Committee in March 2025.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

This report set out the updated Pension Fund Risk Register as at 30 June 2024 for the Board to review.  Two risks were added, cyber security and the conflict of interest.  Both apply the council’s approach.  A policy would need to be produced for these new risks.

During the discussion, the following key points were highlighted:

·                 There was surprise that cyber risk wasn’t marked as a higher risk.

·                 A mechanism for checking Harrow Council’s resilience to see how well they could recover was requested, to which an officer confirmed that this could be added to a future report.

·                 Asked how serious the cashflow risk was for Harrow Council, the officer explained that an analysis concluded that investment returns needed to be 0.7% and so the risk was not substantial.  In 2025 an updated cashflow analysis would be commissioned.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

This report summarised the matters the Pension Fund Committee considered at its meeting of 1 November 2024 and invites the Board to review, agree and add comments they might wish to forward to the Pension Fund Committee.

The officer highlighted that the Pension Fund Committee were presented with the following:

·                 the audited accounts for 31 March 2023 as well as the draft accounts for 2024. The officer raised that the audit for 2023/24 had commenced.

·                 An update on the funding position, with an update on ‘pooling’. 

·                 The consultation ‘fit for the future’ was also discussed by the Pension Fund Committee.

·                 A decision was made on a new set of contribution rates.

·                 A quarterly investment monitoring report and an update on a plan for the pension portfolio to be reviewed.

During the discussion, the following key points were highlighted:

·                 The 2022/23 pension fund accounts had been concluded, with the 2023/24 pension accounts to be audited by February 2025.  The audit would be undertaken by Nezzars (Auditors).  The officer explained the audit report would be presented to the Governance, Audit, Risk Management and Standards Committee in February 2025.

·                 The Board raised the Pension Fund Committee’s disappointment over the Pension Fund’s longer-term performance.  The officer explained that the long-term performance had been particularly challenging and that the Pension Fund Committee were presented a roadmap that had intentions for certain fund managers to be reviewed in 2025.

The officer also explained that  the fixed income of the pension fund portfolio was also to be reviewed in 2025.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

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

The officer highlighted that:

·                 The actuaries reported a funding level of 128% this related to the benefits within the fund that had been accrued to date. and the required rate of return is 4.9%, therefore, the return was higher than expected.  The Board noted that 128% was a respectable return.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

This report reviewed the Pension Board’s work to date and listed the forthcoming meeting dates. The Board were invited to comment on a suggested work programme for the remainder of the 2024-25 Municipal Year.

The following was discussed:

·                 The vacancies on the Board were raised with it highlighted that it was a strain on the three remaining Members.  The officer outlined that work was underway to correct this.

·                 The Board noted that there was a need for a succession plan to be put into place.  As well as this, it was suggested that a remuneration needs to be considered, for the employee representative, to which the Officer would need to confirm if this was possible.

·                 It was raised that there was no trade union representative as an observer.

·                 The Board would like the above points to be reviewed by S151 Officer as there was a need for the Board to remain viable.

·                 The Board wanted a training log to be kept, to ensure that there was a record of Board Members meeting the training requirements.  As well as this, it was noted that ongoing training should be encouraged for Board Members and that new Members should receive basic training.

·                 It was requested that Conflicts of Interest Policy be added to the work programme.

RESOLVED:  That the report be noted.

Report of the Strategic Director of Finance

This report informed the Board of the outcome of asset/liability modelling to assess a funding and contribution strategy for the Fund’s largest employer, Harrow Council for the forthcoming 2025 Triennial Valuation.

The officer highlighted that:

·                 The Pension Fund Committee had decided to go with option 2 for the Triennial valuation, which had a more staggered approach for the funding and contribution strategy.

The Board discussed with the following raised:

·                 It was asked whether the contribution levels were in line with other authorities, to which the Officer explained that the London Borough of Harrow met the Government’s expectations for their funding level.

·                 The importance for the surplus to be maintained was raised, but this future liabilities were not taken into account and that this statistic should be used lightly.

RESOLVED:  That the report be noted.