This meeting of the Pension Board included a training session on topical issues for the Local Government Pension Scheme.¹ The meeting also included a discussion of the Government Actuary's Department (GAD) report on the 2022 valuations of Local Government Pension Schemes across England and Wales, and a review of the Pension Administration Service.

The GAD Section 13 Report

The most significant item included for discussion was a review of the GAD Section 13 Report. This report reviewed the 2022 valuations of the Local Government Pension Schemes (LGPS) across England and Wales, highlighting several issues with the Waltham Forest Pension Fund.

The GAD report rated the funds against four key criteria: compliance, consistency, solvency and long term efficiency. The report did not find any issues with Waltham Forest Pension Fund's compliance with regulations, but did note an overall lack of consistency between funds across England and Wales, making it difficult to draw useful comparisons.

On solvency, no red or amber flags were raised by the report, though it noted an ongoing risk to the LGPS because:

the nature of open but maturing funds. If a shock were to occur, that shock would be more significant now and in the future, as funds have grown relative to the size of the local authority.

The report added a white for information flag against five funds, including the Waltham Forest Pension Fund, in relation to this risk.

On long term efficiency, Waltham Forest Pension Fund received an amber flag because:

although the London Borough of Waltham Forest Pension Fund is ranked second lowest on funding level, around 7 funds, all of which have higher funding levels on the common SAB basis, are receiving greater contributions.

The report also suggested that the Waltham Forest Pension Fund's amber flag was justified because:

Employer contributions are 26.6% of pensionable pay. This has increased from 25.9% of pay in 2019. However, this increase is driven by an increase in primary rates (up 1.6% to 17.2% of pay). Average secondary rates have decreased as a percentage of pay.

This is partly because:

The secondary contribution rate for one major employer in the fund incorporates a deduction to reflect the assumed value placed on the residual property investments currently held as a contingent asset transfer that will be transferred to the Fund in 36 years’ time, if it is in deficit at that time. The value of the contingent asset is not allowed for in the asset values or used in our metric calculations.

The report recommended that the Pension Board note these concerns and continue to raise them with the London CIV. The report also recommended that the Council review its own investment strategy to take account of ethical investment.

Pension Administration Service

The report pack also included a report on the activities of the Pension Administration Service.

The report noted that service performance remained strong, despite the majority of staff continuing to work from home for most of the working week. It included the following key achievements since the last meeting:

• Full staffing levels had been reached in August 2024.
• End of year contribution and pay reconciliation information had been produced.
• Annual life certificates had been sent to all overseas pensioners.
• The yearly pensions increase had been applied to all records.
• Section 13 data had been sent to the GAD and FRS17/IAS19 data sent to actuaries.
• Deferred and active Annual Benefit Statements had been published on time.
• A joint internal audit with the highest level of assurance, substantial assurance had been published. This included a minor recommendation to review some policy documents on the website.
• The McCloud remedy had been implemented on the pensions administration system.

Risk Strategy

The meeting report pack included a draft risk register.

Training Report

The report pack also included a Training Summary Report, providing an update on the training needs of the Pension Board members and how those training needs were being met. The report noted some gaps in training and encouraged members to complete their training needs assessments.