Transcript

Hi, welcome everybody, and as usual, we'll go through brief introductions. My name's Councillor John Gray from West Ham Ward, I'm Chair of this committee, and on my left, the rowdy person. Okay, Councillor Jane Loftouse, representing Cluster South. I'm Councillor Winston Bourne, Resendable for State South Ward. Councillor John Morris, Chancellor of West Ham Canning Tunnies, and I'm a substitute member of this committee. Councillor Kerridan Adaja, Real Victoria Walsh. Councillor Jennifer Bailey, representing Manapar Ford. Thank you, and from Pete for the Workaway, Diane. Pete Smith, from Barnet Waddingham, Investment Advisor. Rack Sharajan, Managed the Pension Fund. Tara Fett, from Legal Services, Montag State for New Services. James Cox, AD for People Transactional Services. Jackie Andres, Pensions Contracts Manager. And you're all Head of Finance, Responsibility for Pensions. James Neill. Yeah, James Crafton, Pensions Officer. Uncle James. Luke itself. Kristina Sasser, Dem Services, Newham. No, thank you. Um, any apologies received? I have an apology from Rohit to Skifta, Councillor Rohit to Skifta, and, um, oh, Andy Ward, that sent his apology. All right. I don't know the trade union. Anybody, any declarations of interest? Yeah. Um, again, I'm never sure whether it is a declaration, but because we'll be discussing London Civ, and, um, possibly the Local Authority Pension Fund Forum. I'm on the executive for the London Civ on behalf of the Trade Unions. And I'm also, uh, Joint Vice Chair of the, uh, the LAF, the Local Authority Pension Fund Forum. Just for transparency, um, do you want to briefly introduce yourself? Yes. Sorry. Welcome, welcome. Um, well, minutes of the last meeting, 18th December, uh, page 9 and 12. I'll copy. Can we take accuracy and meta-horizon at the same time? And if I just fall out the page, the first page, the second page, the third page, and the fourth page. Any matters arising or accuracy? If not, I take that as agreed. Is that agreed? Agreed. Thank you. Um, we now move on to agenda item four and this pension fund business plan update. Uh, it was a general meeting that took place, uh, end of January. And, uh, uh, we can pretend it by itself, chair. Also, um, we have the current company business updates, and I'm going to... Uh, these are to align with the quarterly investment report. In addition, the CIV will provide monthly updates via a newsletter.

Um, and I'm going to... I'm going to... I'm going to... I'm going to give you an update. There's one which will be taking place in June, which I say in July. I've just been informed this July, and then there'll be a second one-day conference in January. Yeah. To give an update in terms of the fund monitoring status, um, the LSEV Global Equity Focus Fund, um, still remains under enhanced monitoring, and the next review will take place in June, as of June this year. Uh, there are some changes and fund launches. The Global Equity Value Fund, which was launched in October, um, and the process of transitioning into this holdings, um, which will be completed within, uh, this quarter. Also, officers are, uh, currently engaged, uh, with the London CIV on their indirect real estate property building initiative, uh, and the CVRE Investment Manager are working with them, and discussions on the operations side are still ongoing, uh, currently finalizing legal documentation and awaiting a draft, um, Investment Manager Agreement, which will be shared with partner funds. There is also the, um, LSEV Private Debt Fund 2. Uh, again, this is something that has access to the fund, um, and it will be covered separately within the investment strategy approach. We've also had initial conversations with the London CIV regarding our private markets, uh, private equity holdings, uh, initial discussions, um, uh, as the CIV are currently exploring the fund requirements and, uh, in line with the strategic asset allocation. 2.4 is the LSEV staffing update. The CIV have now appointed Jenny Butt as their new chief investment officer. Uh, it comes from a background of pension investment experience, having worked with Tesco's and will be taking up for, uh, this month. 3.4. Point three, just general LGPS updates. Uh, as you'll be aware, the consultation, which came out regarding LGPS Fit for the future, uh, in November last year, um, stakeholders, uh, were asked to respond to that. The deadline was in January, but we did submit a draft response to, uh, of the consultation to members. And then we did have a briefing session with the senior pensions consultant from Barnard Waddingham. Uh, some useful points were added to the consultation response, uh, and they were submitted in January. Point four was the pension fund fund monitor. This basically is the revenue core class and cash flow, uh, attached in pens. Three, uh, there are no concerns regarding liquidity or on that side. 5 is the program events, um, upcoming, uh, recent events, upcoming events to July. I'd just like to highlight to you that there is the PLSA local authority conference, which will take place in January, sorry, June, 16th to 18th of June, and the LC June conference, which is actually now moved to the 3rd of July. Um, so that will, those are quite, uh, quite interesting if members are interested in attending those. Uh, six is on procurement. Uh, at the last meeting, we were discussing the actual services and the custodian services. We are expecting, um, feedback on the proposals from MACLG on service provision and fuel procurement. And we're reviewing, we'll be reviewing this and how this will affect the custodian services contract. Similarly, the actual services contract, uh, will end in the middle of a trying evaluation. Therefore appropriate to align this contract along, alongside with the advisor contract at the end of next year, officers are met with the government and waivers, uh, seem to be the suit action to take for both contracts and consultation with the deputy director of finance. Uh, those are the key points for the business plan update. Any questions, Chair? Has anybody got any questions? I think I have them, Chair. I'll support. Right. Can we refer to page 19, um, in the Project Monument Initiative? Um. Yep. Right. I think, um, number three, um, where it says investment in UK social housing. And, uh, the first London fund took off the UK social housing as an asset class contributing to an increase in the UK based investment. I wonder if you can elaborate on that one, please, because I'm not quite sure, um, how many, um, do I do that? In this, um, response, this preamble to position the response so that MHCLG know what the Newham Pension Fund has done. Um, there are these six items that are listed here, and these are all areas where the Newham has, um, has, if you like, been at the forefront of some of the developments within the LGPS. Uh, so specifically the investment in UK social, uh, UK housing, um, become an investment with Cheney Capital. Um, and Newham were one of the, the first, um, LGPS to, to invest in, uh, UK social. Uh, UK social and affordable housing and, and one of the first London, uh, pension funds to, to invest in that way. Others have, others have followed since indeed greater Manchester, uh, are, uh, co-invested, they are also invested in the same, um, housing fund as, as, as Newham is. And, and the other areas, they are, um, really just represent other initiatives that Newham has done. Um, and I was trying to project the, the fact that as a committee, you know, historically, you've welcomed new initiatives and, and embraced them. The 29% is, is really just to say that when you look at the total assets of the pension fund, 29% of them are invested in, in the UK that the remainder is, is overseas. Um, just to say that, um, the fund manager, the property fund manager, uh, did invite me to go and visit a, uh, new development, which did it for, include, um, affordable, um, um, rented units for key workers, for NHS key workers. And it was built to a high standard. It's not social housing. We shouldn't pretend it is, uh, a social rented housing, uh, cause then that's, it's really, really, uh, practically impossible to make money for the fund from investing in social rented, but we can invest in other forms on socially desirable investments and get a decent investment. And they've, they've invited the committee to open a, a nursing home, aren't they? Or a health centre? Uh, care home. Care home. Yes. That's right. And, um, we haven't got a date fixed for that. Yeah. Why not? Um, but I would encourage committee members, uh, to actually, uh, go down there and actually see what sort of things that we're investing in. Um, so yeah, more details to follow. Where is that? So we can go. Yeah. The committee will make arrangements for it. So, um, and we will double check this time. Okay. Yeah. Things, things can go wrong sometimes. Yeah. Any other questions on the report? Um, do you want to say anything about the same category here? Oh, sorry. Um, which is, um, page 19 and 26 conforming the London city. Mm-hmm. But, um, my question is based on the last sentence. We said the new increment is on track to have 70, what happens to the other 25%? Where is that? Where is that? They put it for you. Peeps again or Rakesh? So the, um, the assets of the fund can be thought of as assets are traded in public markets, like property, private credit, private equity. Um, the government initiative in relation to pooling, um, the, the guidance, uh, was very much that you should move all of your public market assets across to the, across to the pool. Um, and as we'll talk about later in this, in this meeting, the company steps to move the property assets across as well. Some of the other assets you own, um, in the private markets, the cost of selling those, uh, would be high, um, to move it to the, to the, the CIV at this point in time. And so the expectation is that, and we'll see some, we'll talk about it later in the meeting, that as the proceeds of these private market funds are paid back to you, you'll take those proceeds and invest them in funds within the CIV. So there will be a period where initially we were looking to target this 75% and then over time, more and more will move to the, to the CIV because that's the, the, becomes economically better to do that rather than sell everything down and move it across. But that's something that, you know, is very much, um, a feature of the CIV will be managing the monies in future. Thank you. Anybody else on, um, business plan updates? I'm sure you, you will have some other things to say. The only thing I would point out is that the second paragraph of 19, that I think is really, really important that, uh, we recognize that the fund, um, in 2010, there was a, you know, the funding level was, was 72%. So that means they had a deficit of 28%. So that means we had made 28% more promises to our, to our workers. And we had an investments to pay them. So it was a dreadful, dreadful situation to be in as many other local authorities. Uh, and, uh, we had to pay on top of the current contributions. We had to pay 16.2 million pounds per year deficit. Uh, and all the councillors and officers are aware of the dreadful experience. We've just gone through trying to agree balance budget, uh, for this year. I mean, the things we've had to do that we didn't want to do. So just imagine if you had to pay an extra 16.2 million. Um, if the fund wasn't in a good shape, but it is at the moment, touch wood. Um, and I can say this and probably officers and advisors wouldn't. But the reason one of the primary reason why we had these decades of dreadful deficits, um, which brought the scheme, frankly, uh, you know, that's why the government at the time tried to get rid of the scheme because of these deficits and the costs was because of political interference by a past conservative government over pension holidays. Um, to offset the cost of, um, the council tax or the poll tax at a time. And because of those decisions, we've basically, um, it's taken us decades to get ourselves into a, a balanced state. Um, there were other reasons for improvement and, you know, and we do thank the officers and the advisors and fund managers, but we must ultimately, and this is what does worry me about the government proposals regarding, um, further pooling and the sieve, not that we should be frightened of change, but what we don't want to do is do something to please. And it happens to be my political master as well as the people here on the left of the chamber. If it's going to cut the fund at risk again, no matter how well intentioned those changes are, uh, because we cannot afford to go through, um, such deficits again, Charles. That makes sense. Excuse me. Um, well, how long will, I think that's a security situation, isn't it? This is what you're saying about the government. So how secure now are the government going forward under the London sieve or what it is? Well, at the moment we really don't know because there's been a consultation and we've got some ideas what the government wants. We've seen the responses and the London sieve responses. So, um, but what, there's been quite a lot of, um, constructive criticism, if I might put it like this, and some unconstructive criticism. So how would the government will decide, um, they want to make the changes? I think it is a bit of a question of wait and see. Also, um, I bring Pete in as well. Um, there's going to have to be some sort of, if they're going to do things councils don't like, and think it's going to put their funds at risk, there's going to be opposition. Um, so, uh, I would say wait and see, and we'll hope to come back with some sensible, constructive changes. But if there isn't, no, there may well be a problem which we need to think about what we're going to do about it. Pete? I just really do sort of bring you up to date on that. The pension and lifetime savings association investment conference is just taking place in the last couple of days. And the pensions minister was speaking at that and has reiterated that the commitment to having the LGPS pool and pool by March 2026. The clear objective of reducing fragmentation was the expression that they, that they used, that we used, um, in doing that. Um, so the, the very much there is a commitment towards that. And there's a pension bill expected to be put before parliament, uh, before the summer recess in relation to this. So that's the, if you like the hot off the press in relation to this, the detail of it are yet to, yet to flow. Yeah. Yeah. I mean, you know, the LTPS isn't frightened of consolidation. Again, in 1965 when Newham was, was, um, founded by merger of, uh, East Ham and West Ham. But nationally there were 3000 local government pension funds. And since then there's been a whole series of merger and now there's 89 or 90. And if we've now come into eight pools and maybe there should be only six pools as indicated. So we're not frightened of merger, but it's got to be done for the best reasons. And not for short term political reasons to be frank. I would say that to, um, uh, past ministers and present ones. Can I just ask, um, this is our response to the consultation. Um, is there any idea of what other, um, pension funds have, have, have they responded? You know, are our responses sort of what you might say in line or similar things to other responses or be a bit out on a limb? Is it possible? Is it possible? So we had consultation with all the other authorities when the consultation initially came together. Yeah. We also spoke with the, the London pool, the London sieve. So because it comes under the Society of London Treasuries. So there was a lot of consultations. So a lot of what we have in our draft is very similar to what the other authorities are relying on that side. Yes. Which gives some hope. Yeah. They're going to have to have radical change in a very short period of time, which they may not be able to achieve. But again, some fund managers have quite openly said that if, if the government does things they don't feel appropriate, they will, they will seek judicial reviews, for example, against the government. Um, but yeah, we don't want to have around one of work with the government and let's wait and see what, what they say. But the, the key issue, I think for all committee members is what's being proposed changes. We don't know what these are, but the liability for the pension promises we've made to, to former staff and current staff. Um, lies with the, the council taxpayers of Newham. Um, not the government, not what, um, uh, uh, not little London save. So we don't want to be back in the situation we were in 2010. Um, we want to make sure that whatever's done is sensible, pragmatic, and it safeguards, safeguards pensions, first of all, most, and also safeguards the risk to, to new and council taxpayers. Anything else on the business update? Um, if not, I'll ask the pension committee to note the report. Is that noted? Noted. Thank you. Um, item five, investment strategy updates, pages 35 to 60. And, um, Rakesh? Oh, geez. Go on. Point two on the funding level. Um, currently the funding level is at 99%. Uh, the deficit, estimate deficit of 90 million, um, which is, um, 59 million. Um, few key influences again for the funding level are the various factors in terms of, um, long-term inflation. I will maybe during the final valuation at this time, we obviously have investment performance returns, which have been exceeding expectations. After 20 at the moment. Funds asset value stands at 1.9. Increased 20 million from the previous quarter. Also we have a table, which, um, there's a report from Northern Trust, which provides the funds value against the index. Uh, sorry. Okay. against the index. Everybody can switch their phrase off as I move. So the analysis for the funds are also provided in the Investment Advisory Reports which are on the part of Appendix 2. Not on the funding one. On the performance report, it's been a reasonable, reasonable quality quality. Over the quarter was quite low by historic standards. Inflation is one of the things that's been talking about at previous meetings. And what the impact of the city is going to mean for central banks. So there's an expectation that the interest rates will be still be cut, but not as many cuts as had previously been the case. And some of that, as you'll see in the press at the minute, you know, President Trump and the tariffs that he's applying are likely to be inflationary in the U.S. In terms of what's happening here, there's an expectation that there'll be inflationary as well. That said, you know, over this quarter, performance has been has been good. That's seen the increase in the funding position that Rakesh has talked about. We've talked about the proportion of assets that are covered there. When we look at the general background, if you want to look at page 51, that really gives the views, our views on which of the assets are looking positive and ones that we have concerns about. We're relatively comfortable with the equity position. There's a lot of talk around Trump and tariffs. But the other key areas that he was elected on are tax cuts and immigration. And certainly tax cuts you would expect to have a positive impact on values. We haven't seen those coming through yet. But the tariffs, we've had the negative of the tariffs. We've had the negative in very recent days of him talking about recession in the U.S. and then backtracking somewhat. But, you know, the tax cut side of things, very much something that featured as part of the Republican election campaign. And so combination of those makes us an expectation of those in the future makes us be positive on these. We have for a number of number of quarters been less less keen in the long term outlook for credit for corporate bonds. That's because the prices of those are particularly high at the moment in relative terms. When you compare the extra return that you get from a corporate bond to that from a guilt that the government owned, there's now, we don't think there's enough of a buffer there to make them worthwhile. That was a view that was shared by Fathom. And as a result, we're tactically underweight in corporate bonds at the moment. Other than that, within the report, I don't think there's anything really that I would want to bring out specifically to the committee's attention that we haven't talked about at previous meetings. We're happy to take any questions on the report. We're happy to talk about the tax cuts and the boom to, but it seems like the scale of tax cuts this time may be much larger. And the possibility of a US version of list trust, which people would have a lack of faith, investors would have a lack of faith that the US will be able to pay back for securities. So I guess my question is, how much is the fund vulnerable to a scenario similar to list trust in American version of it? We have a lot of QX assets. It's interesting. So we're seeing at the moment, markets are down on the back of the latest comments that are made. It's interesting, just as we were sitting before the meeting started, I was looking at an article that said improvements of 5% in markets are not uncommon. We've had 5% up and down in markets 94% of the last 100 years. So we've had a reasonably, we're in a reasonably low volatile situation until now from a valuations point of view. We've seen that tick up. There will be points when asset values are up, asset values are down. We've got quite a lot of diversification built into the asset strategy specifically to try and to manage that risk. And then also currency hedging in there to try and take away some of the currency, the currency risk as well. A supplementary question. How much of the investment is in your securities? Off the top of my head, I don't have a number. However, if I look at the active equities that you've got, the Longview, the Global Focus Fund within the London service, 85%, broadly speaking, weighted towards the US. But those are large US companies that are global in nature, albeit they're based in the US. The Paris Align Fund will have a market weighting to the US. So potentially something they ordered with 35%. So there is a very significant weighting to the US. It has been the growth engine in recent years, particularly the tech sector over there. Anybody else? Any questions on the investment strategy? What did you say the percentage was roughly the US? Roughly. So in the Longview Fund, which is your active equity fund. Yeah. It's about 85%. It is 85%. And it's quite concentrated in about 40 stocks. Yeah. On the Paris Align Fund, which is the global equity fund that you've got. It's about 35%. Broadly speaking, I mean, actually, I'll just bear with me for a minute. It's all that sort of. It's definitely got significant exposure to American. Yes. Equities and other investments. We do report from time to time on our sort of regional investments. Perhaps that's something we used to talk about when we had Favins as that specialist economics advisor, but that's something we can look up for the next meeting. If you look at the State of the Nations document that was tabled, I think at the last pension committee meeting, or maybe the one before that, that document has a breakdown regionally for each of the managers that you've got. Sorry, the QSR, the last QSR that that document was reference document for the committee. But I can, I can include that, that breakdown. Look forward. Could I, I'm a bit puzzled, so forgive me for this. I'm looking at page 14. I'm looking at the demographic assumption that's to help with the absolute baggage of the person March 2022. Why is it that you referred to that date? Is there any particular explanation for that? is there any explanation for that thanks for you so um perhaps what you're looking at is the funding update funding update is produced by the actuary and the benchmark that they use is the last final evaluation which was the the date that those the rates were set up the the figures are provided at 21st of march we're currently going through the next evaluation and when that comes through that will reset those rates and then they are used again so that the valuations are done every three years yeah absolutely just just on risk with trump and i think everybody we could all got our views about um uh president trump um but we do have significant exposure to america um and there is sort of the traditional advice is tariffs uh make nations poorer and i think there's some evidence other than you know brexit about the negative impact of um you know losing a large share of free trade area so i mean is there anything that we perhaps should be doing i know it's difficult to actually understand what he threatens who uh you know he doesn't always deliver but sometimes he he does so i mean is there any defensive moves that we should be thinking of at this time because we do have a lot a lot of um assets in in america and also by having this tariff or it's going to impact on our assets in europe and the uk and possibly elsewhere well i think the the really the key things are to monitor what you're saying um and also what's what's getting done about disconnect between the two um so from a committee point of view um ourselves and officers closely monitoring developments as as one part of the if you like the risk management process from the committee's uh the committee's uh the committee's um point of view um if we see things changing you know we will raise them with with rakesh um and in order that they come to the committee um generally speaking what we want to do is to continue to take the long-term view because we are long to you know the fund is a long-term investor and not a trader or a speculator some of the movements in market that we are seeing are are expected to be short term um can be nonetheless painful but uh we are you know we're looking at that and some of the the tactical positioning you remember one of the things that we've talked about in the past is we are tactically overweight in uk indexing yields part of that is because they are seen as a safe haven asset and so we have actually taken some of the some of the risk of the table in favor in favor of those when i say they're a risk you know their views of risk mitigating asset the reason for that is because the characteristics of index link guilds are very similar to the characteristics of the fund liabilities sure customers um sure i have two questions sure and the first would be you mentioned america has been a growth engine i probably have to do some questions on that so one australia tend from my understanding tends to perform quite well and that what thoughts are being looked at at investing more in australia because my understanding is it hasn't been like a recession in 30 40 years and secondly is now certain trends are emerging that europe itself has seen a lot more investment specifically around the defense sector what inclinations are to look at invest uh europe uh as a source of growth as it looks like you've been needed for not to be independent from the united states um and the second question actually would you mind if i just ask those questions uh to begin with i mean refer back to the second question yeah fine fine we've got plenty of time so far in relation to um australia we have i think you have exposure to australia through the global equity um allocation uh on a on a passive basis so there is there is exposure that side of it the other type of investment that you've got um the long view and turn the wellington asset that's just being introduced just now on the active equity they are the investment managers are taking a view on the stocks to invest in they are not constrained although longview have 85 percent in the us they can invest anywhere wellington similarly can invest anywhere it just so happens that the the stocks that pick have been have been there um so we have some passive equity exposure to uh to australia um we've got passive equity exposure to uh to europe as well um in the passive exposure aspect of things um there are filters on those that will see the exposure to certain elements of the australian economy and indeed the the european economies you know reduce so for example on the fossil fuel side of things and the minerals um on the defense side of things there are exclusions against controversial weapons and so of course there are some defense stocks there are others that are ruled out because they're involved in controversial weapons rather than conventional and supplemental questions sure what is seen as uh conventional versus controversial weapons that is uh uh that is a un uh principle from responsible investment definition of controversial weapons that this adopted uh we bring that definition to the next committee uh uh i think things like landmines cluster bombs um um uh uh those of um controversial weapons are we finished or anything so initially uh i said i went to the house without two questions unfortunately i forgot my second question having too many takes in coffee shops to cross it in the europe well you know there's some minutes but um it's actually i'm going to get a wider economic question i'll remember something about for nothing to do with coffee coffee coffee do you have another question of the committee's inclined to have well um i've got one question which might be you might be um interested in adding to i mean the second part of the trump impact is this may be something that we want officers and advisors to bring up the london sieve is that um um american fund managers including some of the managers the sieve users for sure have taken fright at the election of trump or even beforehand and they have in many cases just shut down on all progressive climate change action um labor rights um again the social rights as well we've got people like musk saying esg is evil um and it's pretty scary because i would assume or lapse did a survey um where uh there were a number of of mainly british and european based for managers who were complying with the the left voting alerts and recommendations um not all the time but if they didn't agree with a recommendation they would explain why when it seems that most of the big american for managers because they don't to be called well whatever nonsense like that are doing nothing now that i think undermines certainly our policy where we are do try to be progressive and the sieve policy as well i think it undermines and frankly we've always been um uh in local government have been when we're asked about concerns over investments we've always been saying uh right well let's try to engage with these companies to make them better rather than just walk away and um by we engage by these companies by having meetings i had one today on behalf of that with a big institutional investor um and we we get them to to vote in annual general meetings in accordance to our fundamental investment beliefs which are you know not that we are ethical investors because we're not but we do believe that companies which are well governed and do not destroy the environment do not kill workers do not employ child labor do not bribe public officials will in the long run in the long run uh produce superior investment return for for our pensioners our pension funds so if this is maybe somebody said it's a short-term technical move but uh if it's not we're going to have to really look again about who we um employ to to to manage our funds because if they're not engaging then we've got no uh defense really because we can't you know power from the net yeah so the in the us esg is is very much seen as a subject that has a high correlation with dei diversity equity inclusion um whereas in the uk it is it is both that and indeed in europe it's both that and sustainability and actually we've seen the expression esg used less and less frequently um it's a it's a terminology that has started to be associated with the scoring mechanism um on this side of the atlantic and uh it's been replaced by um sustainable for sustainable investment uh responsible investment and and actually productive finance i think productive finance is a better expression for what we actually think about you know what you as a committee think about when you're you're focusing on esg sustainability it's about making your money work generate return and in doing so think about how that's how that's happening and it's that backlash against the the expression esg that's happening in the states and in some states there's a threat of lawsuit against these big uh us managers and it's the threat of lawsuit that's uh stopping them from being as committed to some of the initiatives they will argue that they are still behind the subject matter but uh pulling back from some of the some of the initiatives and so one of the things we are doing is is looking at you know have they changed the way that they engage you know have they changed their voting you know are they not as good i mean we've seen various different groups share action for example look at the the relative voting characteristics of a number of managers and you know it's a sweeping generalization but you can say that the european managers are much much much better at voting in line with um climate initiatives for example than than the than the us ones just to support what the chair what the chair has said but it's something that you know we monitor i know it's something that the the london cib are watching closely their sustainable investment team uh also use a firm called hermes i mean zeos who are a voting advisor to to to sort of be able to influence the the managers there so it's something that you know there is an awareness of the difficulty and the changes that are happening but it is one that we just have to be able to do it in the middle of the time um you mentioned a few times like you're looking at the long-term view in terms of the funds um it's been no secret for a while that certain countries have been growing um demographically in terms of population but other countries such as japan italy europe in general are seeing a decrease in in the number of their populations which has an impact on services like that what role does that have in terms of your thinking on your investment strategy so um that if you like in the stocks that you you hold there which effectively are the the last part of the stock markets in each of those countries um the stock markets are and the larger companies are are quite efficient and so changes in demographics for example is something that from a global equity point of view the passive holdings something that the values will reflect the changes like those demographics are the sort of things that the active investment managers that you've got the long view and the global focus fund and wellington the global value fund it's those things that they're actually seeking to to to capitalize on so they look at trends like that they look at the way things are changing you know the aging population here for example and they they look at what does that mean what opportunities does that create and look to to invest along those lines um and similarly that the the seven in terms of which managers they put forward onto the platform that's the kind of thing that we would expect them to be doing as well in future any more questions on the investment strategy update if not uh we'll note this report is that noted yes council carfield do you want to just introduce yourself yes apologies for my target okay i also thought the meeting was with seven i was late to look after i should apologize thanks for your member of the community welcome welcome okay well we just finished then item five moving on to item six pension admin update if jackie presents the report and the purpose of the report i keep forgetting says the report updates members on the current status of the administration of the funds the pension admin which is really important um so i've got a number of subjects to cover so i took that straight um with regards to um the mcleod uh judgment which was the uh the the the um age discrimination case was brought a couple years ago we um uh our pension administrators lppar are now um calculating retirement benefits for members um who possibly come underneath the uh the mcleod rest the restitution and um we're they're also awaiting on further um implementation of changes to the pension to the the administration system go through other calculations but the moment the retirements are the priority and they have um uh calculated um gone through it gets 26 eligible members and only one underpin addition has actually been awarded of 356 pounds per animal additional pension given to this member and this is comparable against all of the pension funds that lppa minister so that's about four percent of members who fit within the general um conditions for being eligible are actually receiving um an underpin so um yeah it is a very small number of members who are actually receiving with this underpin which is we were expected but it's nice to actually have that reflected now um pensions dashboard which is uh the uh the government's initiative so that just i just on on the four so four percent we think four percent of of members pensions and payment four percent of members who are actually for within the membership conditions all right for the mcleod so that's that's much smaller than the four percent of the entire fund right and then are we able to quantify that in in monetary value yet an idea quick and dirty um calculation and um sort of about 1.5 million it was going to cost the pension fund for you um no for about 20 years worth it was just it was a very quick and dirty so to give some sort of idea we're not talking about huge amounts of money it's not an insubstantial amount of money but um yeah if it goes on this way we're looking about you know it's about a million and a half pounds worth of fund will be spent on mcleod underpin admissions over members retirement and the surviving this was um a legal challenge i think about a fire brigade trading brigade and the police and police sorry it was not to do with the internal administration of the fund it was a decision by the government which was judicial reviewed and uh it's going to have some extra cost implications yeah they decided that and though we the local government pension scheme um had implemented changes in a completely different way to the other public sector pension schemes we still had to um put in something into our changes to to guarantee that there was no age discrimination when the changes came in thank you jackie sorry continue um so the pensions dashboard said it's a government initiative so that um everybody in the country will be able to go onto a website and by uh putting over a few bits of information we'll be able to see all of their pensions entitlements over every company that's um in the in the uk um so we have to ensure that we are uh compliant and able to give our data to that um that uh dashboard um when the time comes and our pension administrators lppa um have confirmed that they are still on in uh on quickly on target for being ready and to upload our data the deadline which is the 31st of october this year we do not yet know when it'll actually go live for the public um we expect to get about a six month lead up to it being um going live but we still have to have our um uh data ready for the 31st of october but everything's online for that so just just just to confirm like many people here i've got a collection of different pensions i've got free public service pensions defined benefit i've got avcs i've got personal pension stakeholders the idea is there'd be one portal i'll be able to go to and see all my pensions savings investments it would be access information it's not that all of your pensions will be then in one fund it is just saying you've got this bit here you've got this bit there yes it will cover all of the different types that you've just mentioned there chair yes thank you chair um p and i will have the luxury of remembering a former minister brief uh one of the lgps conferences on how much more worked the pensions dashboard turned out to be for the department than anyone apparently anticipated um and i and i wonder with the introduction of of of the new um government and the new pensions minister under as kendall has has there been any change to how the process is going to be expected to meet additional requirements or standards for the benefit of this community committee just to hear a summary of anything that might change since then given that it was already a delayed process and of course we have the statutory responsibility to adhere to it to ensure the dashboards work for our our members but i know that the government itself is is delayed implementation um i have not heard of any changes to the way it's been done so far it's it's still as it was um which it's good because yeah we're getting quite close now i don't want particularly want any changes we'd have to suddenly swap things around but no it's it's i haven't heard of anything even in the the possibility on the grapevine for being changed so just nice based on the report it appears that we're on track which is very yes our prevention providers are are confident that they can um connect on time um without any particular difficulty well done thank you um okay move on to the uh the administration performance so uh our latest um quarterly administration report is uh attached as an appendix at segment quarter three um our pension administrators lppa have reported that um the overall performance um against our um slas is above the 95 percent that we step that is set as a limit um the average overall of our case types is comfortably upper the uh um 95 percent and is even up from the previous quarter um so and all of our case types and are actually over the 95 percent um sla target um the number of pension fund members who are registered for the online portal that we now have um has increased um and the total figures there are are split between our active pensioner and deferred members um moving on to the code of practice could i just ask a question regarding the different membership yep um my fund membership is further run into the um okay the report all right that's the the first table is just those members who are on the online portal ah right okay um code of practice from the pensions regulator came out um last year and came into effect last march um we initially uh um asked our actuaries on it what if to carry out a review of our compliance with the the new code um they carried out an initial review and we had been um taking some time to gather some documents that um when you were pretty explicitly therefore fill some of the gaps in that analysis and those documents have now been sent up to barnett waddingham for a further um you know confirmation of of how how much in compliance we already are once they have completed that um then we will set out a uh a plan for actually filling in all the rest of the gaps um and keep the committee updated on on our progress through that plan uh pensions board um last met on the 18th of february um and uh they covered the matters discussed covered uh presentation from our uh from lppa on their forthcoming improvements for both um processes and also for the the member and employer portals administration report from lppa same the legislative changes that i've already mentioned um and talks about the things for us the sorry the funds register excuse me um moving on to membership overall membership of the fund is still increasing um although there has been a decrease in the number of active records recently however this can be explained by the fact that um administrators so lppa have been doing a lot of work to try and tidy up um a number of records that had been um uh documents have been submitted to show that the member had left but those hadn't yet been processed um and also other funds other records have been created in error through the uh the monthly returns um process tidying those records up and um merging any strainer's records together so that you know the overall membership is still up but active's gone down just simply through um cleansing of our records um which is very important at the moment because we're just about running into the the valuation so we need to have the correct number of records on there um so did you have a question with regards to ship yeah no it's just regarding on page 78 or 10 of the fact uh total fund membership and uh breakdown of number of pensioners this is former new and workers uh who are gaining a pension and in one way it's quite heartening to see that um like for example there's 20 people uh still receiving a pension over the age of 100 and there's a you know certainly if you ever get arguments that certainly you used to get about i'm not joining the pension scheme because i'm going to die before i get my pension and things of this statistically that's just um unless you you're you're cutting it out so statistically that's it's wrong i think it's you know but however saying that um um i was astonished to see uh there's a program on these uh blue zones there are people this is about the actuaries we need to ask where there was um there are there's an argument there were places around the world where population live longer and other places quite significantly longer and um those countries are supposed to be um you know in various parts and it's supposed to be down to diet and lifestyle um but there's been a critique of this quite an aggressive critique where they're saying that these so-called blue zones are quite fraudulent based on um uh people faking uh saying their grandparents are still alive and they're not and i'm being very very simplistic in this and but one of the arguments they used was actually tower hamlets they say tower hamlets is a mini blue zone um according to this one very aggressive pennyated person um and they've got more 110 year olds living in tower hamlets than um practically anywhere else now bearing in mind i've worked in tower hamlets for about 34 years um i i'm you know normally life expectancy in london and elsewhere is based on social economic costs frankly and tower hamlets has is one of the poorest boroughs in the country like newham as well so it's my question and i have brought this up elsewhere actually he's aware of this sort of allegation because we're right next door to town which we're all different i think we we sort of share a same democratic profile age profile and we have very very similar economic socioeconomic class problems so again i i know nothing about this i have a grade one cse in mathematics but probably nobody here often one or two people will know what that means but that proves that was at the second attempt so it it just does seem that that that happens if it's true if it's correct if it's not a made-up sort of um you know argument that uh are we confident that the same thing isn't happening in newham have we got a unusually high number super old people as much as i would love for us to be known as a place where people do live very much longer does that make sense what i'm asking yes at this point i'm going to refer to my learning actually on this i will ask the question of him i know there's an enormous amount of work goes into destruction of the mortality statistics that they use um and i would imagine it's connected in some shape or form for that when it comes to specific areas um i honestly don't know the answer but i can find out um the area where i live there's a 10 year age gap between where i live in the next the neighbouring area of glasgow that's normal they say from westminster going east people live a year less than every borough going to uh the ethics border that was always my understanding of poverty is not good for people living longer okay anyway i've said i've got something that uh i thought would bring up but it is good view good news for people i'm going to enjoy their pensions um sorry jacqueline um we have uh finalized two admissions of uh new employers to the pension fund so um if a uh an organization within the fund already um outsources one of its own functions to an outside body that body um should be allowed to be entered into the pension fund if they so choose the only other option really have is to is to get a broadly comparable pension scheme um and they are quite difficult to get certification so it is generally considered easier to the lgps um so we have admitted two uh two bodies um one is innovate services uh providing a a contract for services to um a school within the the borough and uh julius rutherford who are providing cleaning services to a trust of schools within um the bar so they have been entered in and we are finalizing um all the records so they are up to date for evaluation um although we will go further into employer work um in the exempt section of the uh the agenda um moving on to creatures of um law policy so we have been complying with the the the whistleblowing requirements um i think um have as necessary but the new code of practice has uh introduced um a specific part for the breaches of the reporting breaches of the law so to ensure compliance with the code we have now um created a um a breaches policy which is um one of the the the appendix two for this report um so the the policy covers uh you know what would be yeah what sort of thing needs to be reported on breach what what's real breaches proportion the fund membership is is affected and cover both breaches of the actual um pension administration let's say the lgps regulations so whether or not calculations have been done wrong um but also other points of um pension law as well um so we will be you know creating a a a um a log of any breaches reported to us by our pension administrators lppa um whether or not um that breach has been deemed to be um a material breach is going to be made by the the responsible officer um but we i said we'll create a log for for all of those and that will be reported to um both the board and committee on an annual base so the policy as i said it's a an appendix to this so if there are any questions any any questions just draw attention of the elected members to page 107 of um the policy uh we are mentioned as being um have a responsibility to report breaches as defined together with officers so it's one of those situations where i think we do need to be kept regularly informed of breaches and um certainly we would um you know trust the officers to to do professional jobs but we would get it in the can if certainly we knew of something and we didn't didn't have it so it's not it's not to me this is not a great worry because i've got confidence that um obviously but bearing in mind the number of breaches as well by employers which the authority have had to um report to the regulator and it's something which i've had to do as a trustee in the past in a different hat um it's you know we can't say you cannot say from now on oh you didn't realize that this is one of your responsibilities so that again that makes sense and fair but we need to be well i've been asked to be copied into various exchanges between employers and um officers about um a number of problems which need to be resolved as soon as possible draws um sorry that's and any more questions god you want to respond jackie or i think yeah i think the distinction sort of there are obviously complaints that will come into the fund but this policy covers specifically breaches in relation to the pension act or the lgps regulations so um yeah there will always be a case we have a separate idrp uh sort of the internal dispute resolution procedure for when it's general complaints and not every complaint is a breach of law it's um so it's just to kind of make the distinction but this is just to build on the whistleblowing act and get us in line with the general code of practice so yeah but the board are what we present and breaches are a regular item in relation presented to the local pension board it might be helpful okay show as a future training need in fact we just go through generally our responsibilities as elected members and because honestly i was surprised when i read this uh even if i thought about it of course we are still liable um yeah so that's part of our supervisory so perhaps as a future training need we can talk about the other um responsibilities that we have in fact perhaps not everybody's aware especially new members to the committee um it says who is responsible for the breaches um it's an example anywhere else you can describe how that occurs and what it's done when it is identified well an example of a breach of the the um pension regulations would be um a pension being in collect being calculated and paid incorrectly um possibly due to uh a mistake in uh um adding in a piece of information when running a calculation so that would definitely be a breach of the pension scheme regulations thankfully we don't you know should only um affect one member so it wouldn't be um affecting a large number of people but um mistakes in the actual calculation routine of a of our database would be a much larger breach um but that's why it gets under undergoes just you know extensive testing before new calculations or changes are implemented um um with regards to um more overriding um pension legislations things like um um perhaps allowing a transfer of pension benefits to go ahead when the member didn't actually have a right to that transfer that would be a breach of the pensions act um things i mean there has to be cases of employers uh cleaning contractors using that as an example case of the employer failing to advise of sort of the scheme employer advising that a contract has taken place and therefore a new employer has taken on new employees to the fund and withholding contributions at the point i've taken on that contract again but that's an example of a breach and um so yeah so essentially lpp are as part of their monthly performance reporting are notifying us of the breaches that get raised to them internally um and that's why we're bringing the reporting that lpp do and making it fund specifics and that everything is coordinated in one place and that's why we've just got the overarching policy for it thank you anything else doesn't seem to be any more questions if there's nothing else on the um admin report and give us just just to note the report so um there is one further um um there's another section or on the communication policies no on the actual um administration update there's a section nine about valuation oh right okay um so just to confirm that um yeah we already mentioned that that we're running valuation as at the 31st of march this year um and in preparation for that we have been um uh trying to ensure our data is as clean as possible so um getting employers to complete uh all the queries that come up um as a result of their monthly returns um running uh data through um with our actuary to find obvious errors and trying to clear those up um and making sure that the employers are as up to date as possible with their monthly returns anyway as well as doing their past queries so um yeah we were just trying to make sure that everything's as clean as possible at the moment so that was the end of okay thank you any questions on the last contribution if not um uh to oh no we were asked to yeah to note and to approve the new uh breaches of the law policy is that noted and approved yes thank you and jackie communications policy 113 138 this uh purpose report to the pension committee is to draft 2025 28 newham communications policy for approval um so uh this is stated in in there that we uh regulation 61 of the pension scheme regulations does actually state that uh an administration author sorry administration authority should prepare and publish a written statement concerning um how it intends to communicate cover its communications with its members and its scheme employers so uh set out what sort of methods we will be using to uh talk to both our um all of us our stakeholders so that's our members our employing authorities um our prospective members as well you know how we're going to go about it what media that we're going to use for those um and what frequency that we are going to to to you to employ for for those um for that communication um so the policy will be covering all of those different things also yeah we've got certain subjects we wish to uh cover to our our members regularly um we've sort of um monitor the any differences that this communication has made with our um our members like yeah increase increase perhaps in employment uh in member numbers or increase in um members who are um logged into the the online portal uh a good example uh indicator of our our communications actually having an impact um we'll be reporting that back to to um to our to the board um and the policy we'll be covering a three-year period um um for both yeah what the the subjects we want to uh take to both members and employers um so yeah cover that in the funding report so um the the policy is um it's the appendix after so it's starting on page 117 um so comments on the communications policy any comments no looks good let's garfield wants to get a feel of how much a b testing has been done with uh younger employees because a few of the time we've spoken about and putting a really good communication of policy in place and that's why i think this is quite a good one um we've considered the fact that the cost living crisis inflation by crisis energy crisis which other crisis you may refer to to describe the fact that people's earnings have been squeezed to the point that more people that are looking at pension contributions as an option or perhaps a luxury than we were as a committee like and the chairs by us earlier you know stands quite strong in the sense that it should be considered a necessity for life planning how much a b testing has been done to see what works with our newer and younger employees and what perhaps started to convince them to opt in the pension scheme or to not pop out because in that case yeah i think in relation to actually testing on sort of the younger work moment where we review sort of the demographic of people who aren't in this game it's actually not necessarily the youngest of workforce who aren't in this game it's actually quite a diverse kind of collection of people who aren't actually members of this game which as you can you know rightly to assume because that was our assumption that it would have been sort of the younger workforce is the workforce that kind of would and it would be the lower ends and it's not the case of that there is a general theme within certain areas departments where there is a higher opt-out rate um but overall the the fund has actually maintained its number of memberships so we're still only probably about uh not in the scheme is around about 11 of our employees which um isn't something that we kind of looked at and thought it hasn't moved on we were fully expecting as you say crisis after crisis that we were going to get a significant drop and move away from the country that hasn't been uh borne out um and we did manage to maintain our numbers when we did uh last re-enrolment campaign so overall there's not necessarily a case that we've tested on a particular group of staff but it is a case of tracking who isn't in the scheme and then trying to look at what we can necessarily do um but yeah there is a lot more i think it's as well moving with lpp it's more of having the accessibility to the pension so obviously the dashboard will be another benefit in the future but it's more of the information that's now available to people to actually then see um but yeah a lot of the things we've kind of done as well is just to highlight the how little a state pension actually is worth um it's not enough for someone to you know live on post-working without a supplementary income source or pension so that's within sort of our information pack where we kind of give an example around state pension so that's kind of where we've done it but we haven't necessarily targeted a particular age bracket or group last enrollment campaign what was the uptick as a result of that in enrolling so we enrolled i believe 600 and around about four yeah it was just the overall after a year when we reviewed it was still around the 85 percent of them opted out from the feedback we get because obviously there's a reason um mandatory to say sort of why you're opting out this game and some a lot of the reasons are for other reasons so we don't necessarily get it but for some it is kind of other investment was one of the approaches and sometimes people don't necessarily invest with an lgps because they've got other means of sort of um um sort of looking for a long-term pension solution um and we obviously have to take the financial years and aspect of it but yeah the numbers were kind of in line with what we kind of still had in the fund so we're still kind of around that sort of 85 to 88 um take up rate within the pensions game incidentally the newham's re-enrolment campaign is next month um so in the next six months i'll be able to give um for me just an update on the membership numbers because you'll see a spike coming in the first quarter of uh the year that's good if i may make the suggestion i understand the document is rather of a rather statutory nature i'd say that would be that's good for the committee to be informed with where if you were to do maybe testing on communications a particular spike that occurred as a result of a certain campaign and where perhaps they didn't run so well yeah so a lot of campaign it's not necessarily all about increase of membership it's you know a number of other pieces of communication that we as part of the policy we actually do need to report on um so we kind of need to kind of look at what actually works as a successful campaign so some of the things that we're actually working with is more on the employer side we've been sure that their performance is improved and we want to see sort of a spike so we'd be able to see when we're sending out communications whether we're actually getting the responses so i sort of if there's employers who are behind on say monthly reporting and we are sending through sort of communications around their responsibilities we would then hopefully be able to see sort of maybe an improvement between a quarter because that's something that we are expected to kind of the success of various forms of communication but yeah we will sort of look at the membership side as well thank you can i just ask james 11 opt-out rate is that for directly employed newham staff or what about omitted bodies that's harder to get the data for eligible yeah because it's where obviously we oversee the payroll for the corporate staff we are able to kind of see who makes up the entirety of the payroll and who essentially is not a member of the pensions because that's why we're able to get figures but because newham as a corporate payroll has a diverse range of roles and individuals around it gives a fair barometer but ideally some of the cleaning and catering contracts within the schools we'd be interested to kind of see around the take-up rates within there around how many people but that's a little bit harder to get the data for so we're having to rely on payroll as the barometer but if we're going to address um encouraging members in admitted bodies um it would be a good idea to know what the problem is if it is a problem i suspect it is actually isn't it yeah um it's something you can certainly take away to have thoughts in relation to um it's yeah that's the only difficult part because we don't have the access to the staff as once they're when they're in sort of like an external organization they're the employees of that external organization so obviously the employer will receive the communications from us and from lpp around the scheme and around what's happening within the fund um it's how they then communicate with their own staff so what channels of communication they have um so something we can certainly look into but the cohort who aren't members of the scheme won't have access to our pension site and you know that the lpp directly um in the same way that sort of members do so that's the that's the only issue but we can certainly have some thoughts around what we could potentially do yeah i think the committee would in general you know like to encourage especially they would tend to be lower paid their staff who um uh may not even realize the employer might not even tell them they're entitled to join the pension i'm sure that does happen actually the employer doesn't really have an incentive does it or he or she to actually encourage those eligible to actually join the schemes because they would have to pay 50 contributions or whatever it is yeah i'm supposed to have to think about that um yeah but um that's that's everything i think on the communications report i've been asked to approve the uh the policy the draft policy and the communication schedule set out an appendix boom free is that approved both items thank you and um now my moment was actually i have a member of public in there i was gonna ask the member i asked the committee clerk to ask the member of public to leave um hope i hope he returns um yeah and i just technically still in the public piece um i should have realized when i was asked what proportion of the fund was expressed in dollars it's actually on page 56 of the pack and the answers if you express that as a percentage of the assets it's 45 percent so you disregard the earlier comment 45 percent is the answer 45 so a lot of the front and big points not insignificant so yes thank you that clarification a bit okay okay do you want to read a bit about approving to go into the example is that okay um yes uh can we um now i thought that's your role uh i've talked too much already i always talk too much okay okay so in accordance with section 100 um bracket a close bracket um four both brackets the government act the government act the local government the committee is asked to resolve that the press and public because we could exclude it from the meeting for specific items business on the ground but they may involve the likely disclosure of exempt information is defined in the paragraph i read part one of schedule 12a to the act as amended this exemption relates to items 9 10 and 11 11 is everyone okay with that agreed yes it's very important thank you