Transcript

I'm going to start the mic, which Nicholas remains a extender in the cover, but I think we'll start again today, end on day, over hide, I think we'll start again, and that Leigh the Chef Rett audio of, I think, to work with lots of things. agenda but it's always good practice i think i've got some new people um so i'm i'm john graham westland council and chair of this particular committee i'm gonna go left and right uh thank you chair um my name is john morris i am the council of the platform at st canata nice and i am a substitute member of this committee um i've been involved with the state south ward representative and i'm just a substitute member of the committee councillor rohita's good back and in town south pete smith from barnett wadingham investment advisor hey cursor stephen from barnett wadingham investment amas sorry uh andrew wards deputy director of finance london borough of newham stephen wild head of pensions and treasuries jackie andres pensions contract manager for newham uh james cox ad for transactional people's services montez fathom pedophon mania hall finance financial trials yeah i'll just go and come back through james roger future self yeah yeah james grafton pensions officer for london barnum the only officer do you want alone isn't it okay when you rise give you some help like to introduce yourself please i'm sorry jennifer bayley manor parkour oh thank you apologies for absence we have apologies welcome i'm thankful for the collective short short notice uh agenda item two is there's any questions of interest oh we kind of like yeah i can introduce yourself as well introduce yourselves oh sorry oh god deputy cabinet for community world building business enterprise and future world of works rear doc works thank you nobody's in the case there's any conflict with this so we'll move on to and i can three minutes of the last meeting on the 16th of october pages 9 to 14 and i'll take matters horizons uh but aren't on the agenda and accuracy at the same time page 9 page 10 page 11 page 12 page 13 and i'll just be looking at the minutes perhaps i should declare and i always get a little bit confused but i'm i'm actually a trade union member of the sieve stakeholder committee um i see no objections or massive items those minutes are approved we'll move on through general item 4 pension funds business updates pages 15 to 26 and i believe that um uh steven is presenting on behalf of that thank you chair um business plan update uh standing reports um yeah members uh there to note the content of the report i'll just briefly go through the content if i may uh london collective investment vehicle update uh there's a monthly business update meeting was held the last one was held on the 28th of november uh you'll find that in the members pensions area some of the uh high points headlines i'd like to uh mention from that report is that the uh lc global equity focus fund the strategy mandate uh remains on enhanced monitoring and the next review is scheduled for

1. um the new changes to sub funds launches new and changes to sub fund launches uh i want to point out is the lc private debt 2 uh which was launched on the 28th of uh june 24 um and this is of interest in newham fund and is covered in the investment strategy update um the property fund um offices are engaging with cbre uh members may recall that cbre was successful in um uh being chosen for the lc property fund update which is hugely convenient for for ourselves because in terms of pooling we can then move our property mandates over into the pool and therefore increase the amount of assets that are under pooling and the lc private equity fund um that's the last uh fund uh uh this civ um that was a missing uh product on the civ platform of course we have a private equity mandate with harbourvest and we would seek to move that across in the fullness of time and the lc global equity value fund you may recall from the last committee meeting uh a decision was made to uh uh invest in that particular product um uh if you recall the equity uh the strategic asset allocation for equities is around 16 percentage points and we split that down middle between the value fund and the else of uh global equity focus fund and uh efforts will be made to invest in that uh fund in january next year uh by moving out of assets within our uh passive equity assets in in in the lc passive fund elgium passive should say um moving over to staff updates various changes appointments within the lc i won't go into detail there uh the biggest item is of course the chancellor rachel reeves mansion our speech was then followed by a consultation that was sent out and there is a link to that consultation in the document i think i also sent it out separately after the speech and members will have had an opportunity to read that consultation in full but let me just go through the key proposals of that um all lgps assets to move to pools by march 26th that seems to be a tablet of stone which we must meet um there is what another deadline of getting listed assets across to the pool by march 25 and that's uh it you have to provide a compliant explain if you're not able to achieve that deadline we've already moved all our listed assets across the only one perhaps that sits outside but my that is the protection asset we've got with schroders but that is minuscule and i think we can uh explain that um administrative authority of authorities either council will need to set high level investment objectives that delegate decisions to the asset pools the administrative authority must make take primary investment advice from pools either london sieve but with the ability to test that advice all asset pools must include an fca regulated management company by 2026 the lsiv as an asset pool already meets that requirement there are two other pools in the uk which don't meet that requirement at the moment funds working with combined authorities and mayors that's the gla in newham's case we'll have to specify a strategy and a target for local investments by the pools pools will do due diligence on all opportunities and have the final say on investment and overall of lgps fund governance we'll see the good governance recommendations implement enacted in full and in there is a biennial fit for purpose review with the addition of a requirement for an independent committee member or advisor on the committee and pension boards have the appropriate knowledge and skills the lgps officer is appointed at each fund pool boards lsiv board must include a shareholder representative opinions are sought on our scheme members views can be heard uh officers are collaborating with um stakeholders including the society of london treasurers and the scheme advisory board to draft a response by the deadline date of the 16th of january we do have a section in the exempt part of this paper where we can discuss these proposals in more detail um moving on to the next item the pension fund monitor those are set out in appendix one and two that's a cash flow update and a budget update and um the key message here there are no concerns regarding liquidity of funding at this stage uh recent and upcoming seminars um we had the longview partners conference uh which is very engaging and went into detail about their investment process and they had some very big luminaries at that conference talking about geopolitics and so forth i sent a video or rather rakish sent the video to members on that um the uh quarterly strategy review meeting we held on the 13th of november uh the fathom meeting was held on the 27th of november again i've sent rakish has sent you all uh copies of the slide deck and the video of that meeting for those you couldn't attend um the last annual conference was held on the 4th and 6th of december john may want to make a few comments on that because i think you attended that meeting um yeah no and i always recommend that committee um i'm a bit of a conference junkie uh so i'll go to his conferences but certainly other committee members and uh and officers in fact we have two free tickets and um the fund will pay for uh transport accommodation and it's i will declare i'm actually an executive of the local authority pension fund also known as that so i may may have a conflict but no it's a good conference um just note for future meetings we've got the court of quarterly strategy review meeting on the 29th of january that's uh an opportunity to road test the papers we're proposing to put up to the next committee meeting um which is in on the 4th of march um last item procurement uh just to alert members to the fact that we have a custodian services contract currently with northern trust expires on the 18th of september an actuarial services contract that expires on the 31st of october uh officers will be liaising with procurement uh with report and details for the next pc meeting that's that's a great question so we'll discuss the um the possible consequences of the chancellor's uh remarks and survey in the in the exempt non-controversy non-controversy no no so that that that was my question that given the 16th of january is when it needs the the uh consultation response is adopted so whether we will get a chance to actually see it because the next qsr is on the 29th of january yeah um the idea i mean the response is still being built up um discussions are still going on with the the stakeholders we hope to have a um um a draft consultation uh response ready by the early part of january um where we'll circulate to members that draft the final form of that will be agreed by the section 151 officer in consultation with chair of this committee and if members want us to have like uh uh briefing um okay could that be done by email or is it um uh sensitive that it cannot be shared with other members the yeah no no i expect us to have the full draft i mean this is it's a seriously quite 30 questions um and of course we'll have our advisors input as well right okay okay yes yeah thank you chair and so harbour vest private equity uh has highlighted performance issues on page four to supplementary agenda item uh and it mentions um one of the reasons for its uh variability is through data gaps can you elaborate more on what type of data caps it has uh sorry what page is that on because i don't remember the agenda page four i think it's not technically wrong we haven't got the supplementary agenda in front of us in hard copy it's online but that's i think agenda item four so good well we'll take that okay is there anything on the the business plan on um from 15 to 26 i don't see anybody indicating so we'll move into agenda item four and then stephen will present on investment strategy of page pages 27 92 and also there's a new appendix for them in the supper and if christine when we come to it okay thank you chair um yeah appendix two three and four um i'm going to pass you over to uh uh to to to the investment advisor pete smith uh after i've introduced it to people um the key things i wanted to pull out was the funding level um we do update this report on a quarterly basis uh barnet waddingham's or is attached in appendix one that shows that the uh funding level had um food to 97 percent slightly up from where it was um from the previous quarter um in monetary terms that's a deficit figure of 59 million 68 million um at the end of court uh at the end of the last quarter um so nine nine million pound contraction in the deficit from where it was uh the key influences on the funding level was the fact that um inflation was a lot higher um significantly higher um having risen to 10.1 percent in april 23 six point seven percent in april 24 uh members will know that pensions are uh linked to the consumer price index so those were quite large increases compared to what they actually had planned for in the short term having said that uh they do um that was partly uh mitigated by the fact that uh those um the inflation uh over the long term is around three and a half percent the investment performance returns uh exceeded expectations but they were offset by the reduced discount i should say that this funding update is a rollover of the assumptions from the previous valuation and therefore i wouldn't uh i'd urge members not to put too much store on that report in terms of what the outcome will be the actuaries valuation that is coming up on the 31st of march 25. um fund investment performance um that that stands at 1.915 billion at end of the 30th uh end of the last quarter that's a 20 million pound increase from the previous quarter um the funds against the plan benchmark which is a composite composite of underlying fund benchmarks is set out in the table one um i should point out yeah it does this trail the index but the index um is is due for an overall um as it um reflects the um the yield environment for the benchmark is is is is higher than it was when these uh when this benchmark was put together when um inflation was running much the yield levels were running much lower um in simpler terms yeah yeah i might just bring in pete to just give the explanation on that possible on the top of page 30. yeah it's 3.3 paragraph 3.3 so just just clarification so are you saying that because it's trailing the index but there is but that formula is going to be changed the index like is that the point yeah i mean it's it's it's it's we've been running with that composite index for for some time now and it's it's due for for a refresh and um uh one of the reasons given for that is um of the iron uh yield we've got on assets on on what we're expecting from fund managers due to to to that surge inflation we had and that needs to be reviewed and the the the number of the asset classes that were invested in like equities there is a market index that we can easily track on a um day-to-day basis over quarters and so the comparison with them is straightforward there are other assets in the private markets that are accessed where you're investing over you're buying something and effectively the the fund runs for a seven plus a couple year period and and there you go in the the benchmark for those assets is set at a a nominal amount so yeah a lot of them are typically in the six to eight percent range um now the actual underlying asset and the reason those numbers are chosen because over the you know typically over a period of that that return is is what's been deliverable from the underlying asset class um and but during the the the during the period and particularly when we look at short-term periods we will not get two percent positive return on every quarter there is a variation because underlying some of the private markets are either um private equity or private debt for example um indeed property and for that reason the movement and the benchmark in shorter period of time can be out of line with the asset performance itself particularly when we've got things like currency impacting like that as well but is there a reason why say it it seems to be that the you know when you say trailing like it's quite a lot for the three month period whereas say you know as it kind of goes on it tapers off much more like the reason why it says it's that difference between something a part of the part of what's down there is the index the benchmark is always positive regardless of what's happening and the actual markets that sit below it and so when we look at short-term periods that's one of the reasons that can be that greater distortion right and then there's the the impact of times like steven mentioned where inflation is higher as well it's a bit probably good yeah thank you that makes sense yeah we're looking at changing the format of the underlying reporting to try and make that um make that better for for the coming year okay okay yeah yeah thank you thank you um okay um the investment advisors performance report which is in appendix two um sets out um uh any changes during that quarter i don't think there are any material changes that if you wanted to highlight over the quarter so as a performance no um as steven mentioned with regard to the london civ um the the global equity focus fund that you're invested in is is under enhanced monitoring now we attended the the long view conference and some of that under performance is down to their particular investment style the fact that they don't hold some of the stocks have been performing particularly well a lot of the growth in the market in recent periods has been from seven stocks all of which are associated with artificial intelligence and they haven't had the full weight of those so some of their under performance is is due to what they haven't been invested in rather than what they have been invested in not performing well um on other other aspects of the report um the um the property i think it's worth pointing out that the uk element of the property is something that in recent periods has been um underperforming it's finally started to turn around and we're getting some some out performance coming through there so the um a recovery and the the property evaluations is useful um aside from that um i think the other point to note as as steven mentioned on the private debt side of things these are funds that um monies are drawn into the fund invested and then distributed back to the to the fund um as the as the the loans mature and we are starting to see significant returns to the fund returns to the fund and we're looking at the the private debt fund within the london civ uh to to make the new investments into one of the things that we have to do is to tell the london civ how much we want to invest um but because there's some uncertainty about the exact timing of the paths of the distributions coming from the investment managers what we're wanting to do is to not put you in a situation where we've made a commitment that we then have to go and sell other assets to to fund we want to make sure that we've got the liquidity coming through with a reasonably high degree of certainty before we before we commit but we fully expect that to be something that we bring to the committee meeting for the next one in march okay thank you before i take um councilmore i think this is the section where we could talk about um arbor vest please yeah i think the question in relation to the data for harbor best i think maybe in the next report on the um uh on page fifth the one that starts on page 55 on the sustainability report well i mean the report mentions um and now to put a delay of reporting from private equity managers so all of us and that could cause um delays in different assessments and so i guess what i'm saying is how how common is it for private equity investors uh so private equity funds not to report uh investments within a specific time so when we are looking at um private markets generally there tends to be a lag between when we get the valuations for them and when they're reported in and then these quarterly reports so we tend to be working a quarter out of sync um so it's not a it's not a huge delay but there is there is some delay associated with that um but we we do report on a consistent quarter to quarter basis as far as that goes um and in relation to how is it something specific for harbor best no it's typical for the asset class as a whole thank you um another thing the report mentions is um uh lgim charis aligned fund um lacks uh flexibility to quickly adapt to market shifts impacting short-term performance um considering how uh unpredictable the world is becoming should we be investing in more flexible funds as opposed to ones that lack flexibility the both of the lgim funds track an index um and that their primary role is to simply track that index so they'll do funds themselves are liquid the flexibility aspect of things is that there there is no one taking an active decision around what should be done at any point in time any change in the in the stock market index will be reflected in what lgim do um so to the extent that and and one of the benefits of that is that it's a very low-cost way of getting exposure to the the index though stephen mentioned the fact that we're moving an element of what we've currently got with lgim to an active manager through the london cib that's run by wellington when that moves to there wellington do take an active approach and so are more flexible so it's around the strategy it's quite deliberately got a mix of index tracking passive where you're not taking a risk on an investment manager making the decision around any active stock picking getting that wrong with a core that's based around simply tracking the index that helps yeah thanks so much chair um 3.5 on page 30 um the second bullet point fund manager investment reports including the london civ investment my question basically who make up the london civ and and do other like say private investors are part of so the london civ is um um body an investment body set up by the the london councils um newham and the others are shareholders of the london civ and it's it's set up um exclusively to manage assets on behalf of the london council pension funds this is all of london council's yes yeah there's no there's no um private sector investment in it nor is there any um retail individual investment in it it's it's a only it's a vehicle that's regulated by the financial uh the fca but is entirely owned by the the london council funds that are participants in it so i think the ownership is by the councils rather than the funds yeah and the the representation from from newham in relation to that is on as he mentioned as a member on the share or a representative from the shareholder committee well on behalf of the committee i'm going to attend the london civ atm and vote on any motions as a shareholder together with 32 colleagues or 31 uh councils including the city of london so yeah sorry but money used to be part of this committee there also was lap fee as well which looked after all the london what's happened to that actually still about so it's like a trade body for local authority pension funds and pools and it tends to concentrate on um esg responsible investment issues rather than investment or internal things but spent in the past very very simply i mean simplistic all 33 london pension funds including you used to appoint interview research due diligence on fund managers uh but the move in recent years has been instead of us all having uh our smaller funds we merge funds so we're into bigger super funds and where it's believed you get better economies of scale and better returns and better control of risks uh and again we'll talk about later on a new set proposal to make those funds those super funds probably a little bigger and again make them for the main vehicle um it's hard that was pretty controversial and certainly knew whom we weren't particularly happy with the london safe that's because of of um various reasons but um just a summary assurance is the current chief executive of the london pool states he believes that the london pool is the external arm of council finance departments which deals with pension investment he sees himself as uh as that part of the local authority family in london and some people won't disagree but um that's what um the uh publicly states and um uh i think there's some truth in that but also i think newham has been very cautious you know in our approach to they couldn't retain senior staff people were leaving splits and also a previous management didn't seem to understand local government and just considered themselves an external fund manager even though they're a wholly owned public body they're not wanted to be better in source um um uh based off of you know that you make things for beneficiaries and obviously stakeholders such as council employers to me what you said there seemed to be um some type of um that's what i'm looking for there is every chance that there's not everything's not all right within the organization itself and there seems to be some likelihood as though you can probably have disagreements and so that's the point i'm getting at the moment so how secure would you say is the london's in terms of the members or contributions i think insecure it was a threat of a split a year or two ago by some local authorities who didn't want to remain part of the london sieve however i think they realize a nobody else wanted them it had to be in the sieve and um in their best interest actually to address concerns they had about the sieve some of which were pretty valid internally rather than uh go off and join another if i can maybe add to that in terms of the actual investments themselves the um the investments are all held by custodian separate to the the the the sieve itself um and then the management of the assets are actually managed by investment managers that are third parties appointed by the sieve so the sieve themselves are not out buying and selling particular stocks they are picking investment managers but like this committee has done in the past they are picking investment managers to invest the money on on behalf of the participating the partner funds um and so from that point of view there is a comfort that the assets fundamentally are held in a secure format okay thanks very much could be more questions as well it's very interesting but um i'll hold them as a board as a former chair this committee so i'm very sure lucky and yeah as a friend of knowledge yeah yeah thank you for your contributions thank you castle morris um how much has um invested in london council's investment vehicle i think it's about 68 percent of assets say around about seven yeah that works one point so one and a half billion it's about a billion i would have said roughly around a billion of our assets are invested within when the when the property is moved across from memory i believe the numbers is going you're going to have 72 percent of the assets invested and then when a commitment is made in relation to the private credit and then subsequent to that that number will increase to over 75. which is a magic figure yeah and and as we'll discuss in the exempt part you know there's an expectation that that will increase further when the pools were set up the eight pools for the uk excluding scotland and northern ireland uh they talked about all pension funds like convention be 25 billion was it minimum and that's now moved on exact um optimum size so the idea is um the scale cut costs and and creative performance but of course big does not always mean better okay so before the civ got its act together um this this committee took some time before it had the confidence in the london sieve to start investing in or moving its assets across to to to the london sieve so we were lagging at the time so we ran about in the bottom quartile authorities in london that had moved their assets across last time we looked at that league table we were around about the middle um upper half of london authorities that pulled their assets i'm just thinking one other piece of comfort if you look at page 42 of the the meeting pack which is our quarterly report under the the london civ you know we've got that voted as a a green and i think that you know green being that uh we have a fairly positive view and things and that's a reflection of the fact that since the initial uh challenges that the the the cif have we have seen progress made and particularly progress around the level of transparency and the willingness to work with the underlying funds and that's that's we're in a much much better position than we were historically yep okay continue chair yeah um so that summary um our report that's provided by pete on manager monitoring uh is supported by detailed analysis is a uh pete uses the information from northern trust from their risk analytics report and you can see the last quarterly report on that handle link in the member sports to go in and delve into the detail it's very granular and i'm worth looking at but so ideally you should be looking at some report alongside that detailed report um so item for carbon emissions data so um we are now under um uh uh tcfd um as force climate change financial discord closures um that hasn't yet come out as far as nlp yet in terms of local authority guidance we know it's coming uh we know what's involved in terms of that reporting and um we've we've this this committee has done a great job in terms of driving down the amount of companies that we were investing in um uh which would which use fossil fuels next step is to actually measure carbon emissions are in accordance with the uh new regulations uh for when they come out formally uh come out um so we've got some carbon emission in inside this report which provides a baseline where we can measure our progress against in terms of forcing that down um summary of that uh is set out in uh uh appendix three um there are still some gaps on some of the private market funds but i i think uh worth looking at is appendix four which is the sustainability report which is a a fairly new report it's a very detailed report and and goes at and looks at fund level right down to manager level looking at things like esg risks um carbon emissions and and you know it's it's it's it's in visual form it'll tell you um the uh uh the equivalent number of cows that uh flatulent cows meet the uh that the actual fund manager is producing in terms of carbon emissions if you if but it includes other things like cars and vehicles and stuff so it gives you a good visual demonstration of what the fund is doing and how those indicators have moved over a year and probably best for me for pete to come in and say a bit more about that report yep so as steven mentioned there was a consultation i've been a couple of consultations that have talked about bringing the lgps closer to private sector pension funds of a similar size and and getting them to report formally under the tcfd disclosure framework um and change of government has slowed that up but it's it's hard to see that the direction of travel for this is anything other than uh that you're going to be formally reporting but the the big bugbear that i have with tcfd is the the letter d at the end disclosure because the process is actually not so much about the production of a report it's about the framework and the actions that you're taking to reduce emissions um and so the the report here tries to capture some of the the actions that have been taken today and the consequences of that and it culminates and not just what you own but how you own it so some of the the focus in here is around the voting as well um the steps that you've taken to to reduce emissions are um around the use of the legal and general funds they are now rather than trying uh tracking a standard market uh cap market capitalization based index the uh the the funds track i i start an index made up of companies that is ultimately seeking to have a year-on-year reduction in emissions but it's aligned with the paris index it also has um effective exclusions and fossil fuel the funds holdings and those are currently less than one percent uh quite significantly less than one percent what this fund is looking to do is to see um of the managers that you have how are they how are they performing in relation to sustainability uh climate social and and governance and we rate we rate we rate the managers accordingly um as i mentioned for some of the the private market funds which tend to invest in smaller companies the data is um not as complete as we would like it to be that is just a feature of the size of companies that are invested in um but it's improving and part of the purpose of this report is to try and track through those improvements here on here um as well um the result as steven mentioned a lot of detail in here and and rather than pour over this on a page by page basis okay happy to take any questions that people may have on the report and also committee members and observers can always if they've got a pressing question contact officers yeah um especially if it's complicated yeah more than more than happy to answer questions following up from the meeting thank you um we pete mentioned earlier about the private debt update where he's collaborating with the private credit managers to map current market exposure outstanding commitments and what level of capital calls and distributions are expected any rebalancing required to bring the strategy closer strategic asset allocation and that they also is currently developing in their private debt offering i think we'll be bringing a piece of work to the next committee on this um where we get some resolutions um right i must um can i ask just christine over there there was a supplementary paper sent out on the sab report that was missing from the initial pack do you know where where that it's not in my paper back so no i meant to print them out and i oh no that's all right um so i i think i'm sharing that on the screen but everybody's feed is free and sorry of course oh we've got john that is it's online yeah it's okay we can we can remember this thing yeah that's okay okay well it's just that particular item the uh scheme advisory boards um paper that did you just summarize the key points uh yeah yeah so we we did cover this at the uh qsr meeting that's the one that's it thank you very much christine yeah yeah so um this this is to deal with um um help members of this committee deal with um information requests uh from specific uh lobby groups uh on topical events and um it's it's basically saying that we have to take our fiduciary responsibilities our primary responsibility and that we shouldn't allow any particular group to dominate their thinking over what our primary responsibility is and that other members of the fund will have different views as well and we can't give primary primacy to one view over another if it compromises our fiduciary responsibility now i think our esg policy that we've done does a great job trying to deal with those issues and in many ways i think we're already doing that already whatever that or following the advice that the scheme advisory board has provided and therefore this paper is is is provides some cover and protection for yourselves in terms of how we respond to those kind of um comments i don't know if you want to add any more to that pete at all i think that's that's i mean the responsible investment policy has been poured over with uh you know against that as a backdrop um yeah and again i mean if councillors do get lobbies uh emails you know all means councils will do what they have to do um to that for their constituents but uh it'd be good to get advice from officers and we have sent out um advice to members if you get these um but this is it is quite important because at the end of the day we do have a year traditionally due to do things in a particular way and some residents may say um not understand this or they may disagree in this but we you know we want to support councillors as well when they are being in being lobbied um brightwood segregated private debt has a low conviction rating for stewardship um can you elaborate what low conviction that means uh do you think it's acceptable uh a fund with a non-conviction rate which right sorry brightwood yes um it's it's it's better to not invest in a manager that has a low conviction um when but i think the the context around the slogan the yeah the the context around what brightwood do is that they make directly to companies small companies in the us um those loans are made for a seven-year period um but are typically repaid after before uh so that the time period that they're making the loans for is low um as a result of which some of the areas of their their business um they're not as focused on the stewardship and engagement because they reckon that as part of their initial due diligence of the companies you know they are they're looking at the risk of not getting paid back and it's measured over a shortish period of time um i think it's fair to say that uh we typically see stewardship being not as advanced in the us as in europe and the uk um we tend to be ahead of it so brightwood is a manager that we've made we've made loans to or rather we've invested with um going forward the private credit investment is going to take place through the the london cib um and so as money is distributed from brightwood it will go towards the london cib right we're not one of the managers that sit behind the london civ investment and so in relation to your specific question is it appropriate to hold it it's not what we would choose to do going forward but it's a legacy asset that we have that over time will run off can you just explain the stewardship rating to me because this is my first committee meeting i'm sure so um the stewardship rating is looking at the activities that investment managers undertake around engagement with the companies that they invest in or vote if it's equities voting and the companies that they they invest in with a view to improving those companies from a sustainability standpoint be that environment social or governance and and what we then do is we look at how um how good are those managers at that relative to their peer groups and we we award a a rating if they're particularly good and when they're very engaged and they've got very strong policies that are high conviction you know if the policies are are sound and doing what we need them to from a point of view of the responsible investment policy they're unacceptable if they're in some way falling short we would say they're low conviction supplementary question so when you mean uh engagement do you mean just purely in esg or do you mean why the governance in general um we are the focus of this is on sustainability so esg but as part of a separate um due diligence that we carry out on on managers and the ratings that we that we have um we look at the the wider governance aspect of this yeah i was just going to add to that sorry that the low conviction is for their stewardship as you mentioned but their overall esg score is made up of three areas stewardship integration and research overall they have a rating of acceptable but it's just their stewardship part that they're looking and it used to be years ago that uh lack of uh commitments whatever you want to call it in stewardship issues across the piece in all the financial assets and funds with with exceptions and over the years we've managed to encourage um equity firms to take stewardship seriously um and we're moving through the assets first as the private debts down a few years ago if you'd said you've got stewardship responsibility to the private debt most managers would have laughed at you and completely denied that there's anything they could do there is a bit of a learning journey and uh they are frankly some of them not and it looks like they're sort of dinosaurs with regards to stewardship issues um and by coincidence i've actually asked officers and advisors about um something i've been lobbied on about poor practice by a private debt company that we do not actually invest in uh but dundon safe does and again again i think it points example that the private debt has got a long way to go to before they can satisfy us on these issues i think i think it's fair to say that over the last seven or eight years there's been a lot more focus on not just what you want but how you want it and then because of that policies and the monitoring of it has developed unfortunately through that monitoring and the the greater of focus on that aspect of how you own things by investors the investment manager practices themselves are generally rising yeah thank you okay another question yeah oh yes on serverless um contributions to the same by individual local authorities how is that distributed um do you understand what i mean in terms of um um investing do each local authority and there's the same amount or do you have differences of so the um in much the same way as the newham funds sets its strategic asset allocation and and then chooses particular investment funds so over the years you chose to invest to a percentage of the assets with longview um when we look at the london civ funds that you're invested in it's exactly the same principle you choose that you're going to invest you know a certain proportion of the scheme the funds assets and you you then invest in the underlying london civ fund managed by a particular manager let's assume it's going to be wellington just for argument's sake what other council funds do in terms of making those investments they may choose to invest different proportions of their assets in a particular fund or they may choose to invest none of their assets in a particular fund so there are um there are a number of london civ funds for example that the london the sorry the new fund is not currently invested in so there's no everyone pays the same amount into the same fund it's very much fund fund dependent and some funds are much bigger than others were yeah and usually you think those funds they do are bigger funds but to be clear the intention of the government is eventually sooner rather than later as far as they're concerned all our funds pretty much will be in the landscape or basically but that setting of the strategic asset allocation how much is in equities how much is in bonds how much is in property is a responsibility that will even after the change will remain with the committee how it's then implemented in practice is the thing that's the consultation is talking about that explanation now drives me to ask another question if you don't mind yeah we're all running a little bit short time but please go ahead it's great sketch questions where the london authority do they have an influence in the london sea no they don't they have their own pension scheme and they are partnered with uh the lake district and somebody else bizarrely not partners okay tomorrow i'll meet with uh of the local authority um yeah i think that's uh completes my report all right well thank you thank you steven and i assume members have the opportunity to ask more questions they were once on to uh general item six which is pension admin updates and uh jackie thank you chair um so i will be going over um a legislative um update um a quick cover up of the uh cover over the um administration position we have with our pension administrators lppa uh mentioned the the code of practice um and uh completed uh employer risk work so with regards to um um the mcleod uh solution which is um the the the age discrimination case that was brought against the public sector pension schemes um so the regulations are well in place and lppa or pension administrators have been um running calculations now for members who are uh leaving the the employment to check to see whether or not they would actually um qualify for an uplift underneath the cloud um conversation the legislation regulations have been brought into place um we have um there will be having further um updates to the pension system so that cases that have already been completed including things like transfers out and force cases which have to be go back over to check whether or not the person who has left would actually be entitled underneath the new regulations those changes will be coming in um in the the new calendar year so they can then go through and complete their review of previous cases um we have asked lppa to include in their um their quarterly reports to us details of the number of members who have actually been awarded an uplift underneath the uh the mcleod restitution and restitution regulations and how much um the the the uplift has actually been but we haven't got those um in place at the moment um the pensions dashboard so the uh online scheme that the uh the government introduced previous government introduced but uh but every but every pension scheme in the country will upload data onto um that's still running to to plan um our pension administrators have said that um they are working closely with the provider of their pensions database to ensure that everything's working smoothly and they will be on time for um connecting to the dashboard and uploading their data as as needed um so the performance update um lppa's reported performance remains above its um 95 uh service level agreement um although we um um do have one case type that is um falling down underneath the 95 so we're making sure that they that um extra work is being put in by lppa to ensure that that gets risen back brought back up again to be um over the 95 percent have had yes another increase in the number of members who are registered for the uh the online portal um and we'll be pushing to try and increase those numbers further um so the code pension regulators new code of practice um came into effect in march this year um and we have uh carried out a a gap analysis um through our actual band in waddingham to to determine um where we are fully compliant um partially compliant or not applied at all with with the code of practice um and they've given us the first day to the review and we are now contemplating on finding documents to fill the gaps that because not all of the so are um uh the our compliance with the code are available online and that was where um fighting was starting with try and find these documents was online so we will be sending them further documents to uh prove further compliance and then working on anything that is actually missing in the end so that we will be um uh fully compliant as soon as possible and we um um presenting a standing item here to uh to to show our uh moving towards full compliance with that um last pensions board meeting was um held on the 26th of november um and uh we included a report from uh presentation sorry from lppa with regards to how they're changing their um reporting on their internal controls further the administration report from lppa um we talk about the latest legislative changes with with board uh we talked about risk register and um talking about the amendments that we're going to be making to the pensions administration strategy um the membership numbers um continue to to increase um in general although we have seen that there is um there's becoming a bit of a pattern with um um after you know the the start of the new year the the numbers which have increased all the way through the previous year then dropped down um and that's because um at the year the the the end of year the um yeah they do a a purge on records that have been created in error due to um new starters being coming through and then records then being completed properly that they shouldn't have been set up so overall our membership is still higher than it was but it just for one quarter it went down because of say tidying up of records but we need to have clean records anyway so this you know tidying up is always a good thing um and we uh we've actually had a merger of two of our um uh employers um so that newham sixhorn college has merged with newham college to become one single entity happened on the first of november and newham college has taken on complete liability for newham six hall college so all of the employees all of their past employees liabilities is now with newham college but also for their assets so we'll be working on just making sure that records are sorted out on that um math and that's the end of any questions for that thank you john and this is covered in the in the appendix um yeah yeah yeah that's the the lppas the two administration report in full i've got some points but um first of all congratulations on being shortlisted for the investment awards um i think that was one committee members say that from this report it looks like it's well deserved um but again as someone that's a new member of the committee can i ask what the uh what was the sign what were you a finalist of um and also can you let me know uh some more details about the letter review project that is ongoing what item number is that again um it's on this item page page 31 of the report uh page 131 of the report that's the lppas oh that's actually our um our penthouse administrators rather than newham itself in grade lpp you do our pension administration they're the ones that have been shortlisted for the uh the ward rather than newham council okay and so do you know what the details of why the world finals i do not know that i can have a look and come back to you on that sure uh is there not a representative of lppa i'm afraid not they do come 100 percent occasionally yes occasionally is this are they normally required to come or is it well there are contractors even though they are a local authority funded uh owned organization it's the it's the london yeah the local pensions fund authority um and alongside lancashire council created a body called lppa and um do you know where the next thing becomes uh i don't know we haven't we can schedule we can liaise with them schedule some time i think yeah yeah they have a separate um a separate part of the company the organization that deals solely with with um investments um not any of our investments but they have to they'll be dealing with the investments for the london pensions fund authority pension funds and probably also lancashire council so it's probably i would surmise at the moment without going in and finding out that the um the ward has been with regards to their their investment for um other funds that they actually deal with but i will still go and check for you okay well just to note uh on uh items 6.4 leadership but um it's been quite a steady growth of active members which is very positive and um certainly um thanks to everybody involved in doing this because i mean it is a real you know a lot of staff who are entitled to join a scheme and these are not just new council staff directly employed don't understand the benefits but certainly plan for our long-term interest of funds it will you know it's good for us to grow at the appropriate rate so that's quite uh significant and also it's um a few bumps up up and down it's a clear growth also perhaps members would be interested in or struck by on page 111 where they break down the fund membership by demographics and we've got 19 members of the fund who are over 100 years i don't know i was like wow most of them in all probability spent more time um in retirement than ever spent contributing to the fund well yeah so it's uh again people don't understand the benefits um it's interesting to see actually how much tension somebody's had about aids compared to what they've put in but yeah 19 i think what's our oldest was 105 i don't know what at the moment thank you for that presentation jackie and no more no more questions there's no questions we'll now go to the agenda writer 7 which is the uh the uh exclusion of all the press and we're currently present um or watch it online so we will thank everybody who has turned up to watch online or will do in the future uh it's on youtube and uh you don't have to make a formal vote of this do we i don't think so i don't think so it's a declaration agreed chair agreed yeah second vote absolutely uh it's got uh and uh general acclaim as i said i don't know that was a meeting just confirmed