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Agenda

January 7, 2025 View on council website Watch video of meeting
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Summary

The committee discussed the UK Government’s consultation on the Local Government Pension Scheme (LGPS), how the Wandsworth Pension Fund would need to transition to comply with the proposals, and approved a routine update of the Pension Fund’s Communications Policy.

Government Pension Consultation

The meeting discussed the Department for Levelling Up, Housing and Communities (DLUHC) 1 consultation Local Government Pension Scheme: England & Wales - Fit for the Future. The consultation proposes to significantly reduce the control that local councils have over their investments by compelling them to delegate the implementation of their investment strategies to the eight existing asset pools. The committee agreed to respond to the consultation, noting concerns over the potential impact on performance and governance, as well as expressing a preference for a broad interpretation of 'local' to include the whole of the UK when considering potential investments.

“It is recognised that the government has a desire to increase local investment however there is some concern that this could impact on performance if there are limited options for good investment.” 2 The committee considered whether to object robustly to the government’s proposals, even if they were likely to be implemented regardless of the committee’s views, or whether they should focus on securing changes to aspects of the proposals that they considered important. The committee ultimately decided to adopt a more pragmatic approach, seeking to influence the direction of the government's policy on what they believed to be the most important aspects of the proposals.

The government's proposals mean that Wandsworth, along with the 31 other London councils who are members, will be required to give control over all of its pension fund investments to the London Collective Investment Vehicle (CIV)3 by 2026. While the committee acknowledged the potential benefits of economies of scale and increased expertise, there were concerns raised about the potential loss of control and the ability of the pool to meet the specific needs of the Wandsworth Pension Fund. The Director of Finance, Fenella Merry, observed that:

“There is concern that pools will have sufficient capacity to effectively oversee more than 200 legacy private market mandates.”

The committee’s view is that the ability to determine whether investments are passively or actively managed is of particular importance. While they are content for the London CIV to make decisions about most of the detailed implementation of their investment strategy, they will argue for the retention of control over this aspect of their investments in their response to the government’s consultation.

The committee questioned how residents and staff would be able to hold the London CIV to account if decisions were taken against their interests, and how any issues with the pool’s performance would be resolved. It was observed that there were no formal processes to enforce changes to the pool’s approach. The committee agreed to press for these concerns to be addressed in their response to the consultation.

Nuveen UKPF

The committee discussed the ongoing issues with the Nuveen UK Property Fund (UKPF), in which Wandsworth Pension Fund has £41m invested. The fund is currently suspended from trading, and investors are considering a proposal to merge it with another fund. The committee heard that there were delays in completing the due diligence required to assess the merger proposal, due to differing views on asset valuations. Fenella Merry used her delegated authority to vote in favour of a proposal to extend the suspension period until March 2025 to allow time for the due diligence to be completed. The committee agreed to extend Ms Merry's delegation, allowing her to vote on the merger proposal if it is put to a vote before the next committee meeting in February.

Communication Policy

The committee approved a routine update to the Wandsworth Pension Fund Communications Policy. The policy, which was last reviewed in 2022, sets out the Fund's approach to communicating with members, employers and other stakeholders.


  1. The Department for Levelling Up, Housing and Communities is the UK Government ministry responsible for housing, planning, local government finance and local government policy. It is sometimes abbreviated to DLUHC. 

  2. Quote from the report 'Response to MHCLG LGPS Consultation Fit for the Future

  3. The London CIV is one of the eight national asset pools that invest Local Government Pension Scheme funds. It is a company owned by the 32 London Boroughs and the City of London Corporation.