The agenda for the Pensions Committee meeting included discussion of the investment consultancy services, a review of the custodian and actuarial service, the annual report, risk register and governance compliance statement.

Pension Fund Annual Report

The committee was scheduled to consider the draft 2024/25 Pension Fund Annual Report, attached as appendix A to the report pack. The report was prepared in accordance with regulation 57 of the Local Government Pension Scheme Regulations 2013.

The annual report must contain:

• Details of overall fund management
• Details of governance and training undertaken by board and committee members
• Financial performance
• Fund account and net asset statement
• Investments and funding including pooling
• Scheme administration including key performance indicators
• Actuarial report
• External audit report
• Clear links to the funding strategy statement, investment strategy statement, governance compliance statement and communication strategy
• Any other material which the authority considers appropriate

The report pack included a checklist, attached as appendix B, to provide assurance that the annual report has been produced in line with Scheme Advisory Board (SAB) guidance.

The report stated that the 2024/25 annual report would comply with all the requirements upon completion of the external audit and would then be published in its final form. It was anticipated that the draft annual report, which must be published by 1 December 2025, would not include the auditor's report. Upon completion of the audit the audit report and financial statements would be inserted, and the annual report would be republished on the council's website in its final form.

The committee was invited to agree the draft 2024/25 Pension Fund Annual Report, note the compliance checklist and approve electronic publication of the report. The report pack stated that approval of any material changes to the draft version of the annual report should be delegated to the Chair of the Pensions Committee and the Statutory Section 151 Officer¹ to conclude the final version.

The draft annual report included a chair's introduction from Councillor John Crowder, Chair of the Pensions Committee, which stated:

The Havering Pension Fund now serves 22,634 members and 65 active employers. Its net asset value increased to £1,008 million, up 4.0% from the previous year, with investment returns of 3.64% over one year, 2.38% over three years, and 6.99% over five years.

The report also stated that the fund has already pooled £635.3m (64%) of its assets, and the London Collective Investment Vehicle (LCIV) has reported that Havering achieved a net saving of £0.69m in 2024/25 from enjoying the economies of scale of pooling.

Investment Consultancy Services Performance Review

The Pensions Committee was scheduled to review the performance of the Investment Consultant for the period 1 October 2024 to 30 September 2025 against strategic objectives previously set.

The report pack stated that regulation 9 (4) Local Government Pension Scheme (LGPS) (Management and Investment of Funds) Regulations 2016 state that the Fund must take proper advice in relation to the appointment and the terms on which the appointment of an investment manager is made.

The six key objective themes to monitor are:

• Demonstration of value added
• Delivery of specialist services
• Proactivity of advice
• Support with scheme management and compliance
• Relationship and service standards
• Support with additional matters arising

The report noted that Hymans Robertson (Hymans) have provided investment advice to the Fund since April 2006.

The report recommended that the Committee agree changes to the current objectives, note the views of officers on the performance of the Investment Consultant (Hymans) against the strategic objectives and agree to commence procurement of the Investment Management Consultancy Services to the Pension Fund via Lot 3 of the LGPS Investment Management Consultancy Services Framework; and to enter into an agreement with the LGPS for access to the framework at a cost of £500.

The report stated that the government's response to the LGPS: Fit for Future consultation was published on 29 May 2025 and included confirmation that many aspects of decision-making will transfer from pension committees to pools. It also noted that London CIV is developing a Strategic Asset Allocation (SAA) Advice service and have appointed Mercers, with the expectation that this SAA Advice service will be fully operational by January 2026.

The report pack included an investment consultant service review, which included objectives for 2025/26:

1. Work with officers to support a smooth transition of the remaining assets to the investment pool
2. Support oversight of the pool following transition.
3. Help the Committee to establish clear expectations of the investment pool.

Review of the Custody & Performance Monitoring Service

The committee was scheduled to review the performance of the Custodial and Performance Measurement services provided by Northern Trust, for the period 1 October 2024 to 30 September 2025.

The report pack stated that the services are reviewed annually to ensure that the Pension Fund is receiving best value for money and is benefiting from the services the custodian offers.

The services offered by Northern Trust fall into the following main categories:

• Safe keeping and custody of assets
• Investment accounting and reporting
• Performance measurement

The report also stated that authorisation was being sought to procure a new Custodial Services contract for the Pension Fund for when the current contract ends on the 30th September 2026, using the National Local Government Pension Scheme (LGPS) Framework which has deadline to tender of the 8th February 2026.

The report recommended that the Committee note the views of officers on the performance of the Custodian and Performance Measurement Service, agree to the commencement of tendering for a new Custodial Services contract via the replacement to the LGPS 'National Framework for Global Custody Services' with a term of 10 years from October 2026 and agree to enter into an Access Agreement to join the National LGPS Framework for Global Custody Services Framework once refreshed, at the estimated cost of £8,000.00.

Actuarial Service Performance Review

The committee was scheduled to review the service and performance of the Havering Pension Fund's Actuary from the 1 October 2024 – 30 September 2025.

The report pack stated that all Local Government Pension Scheme (LGPS) Funds are required to procure professional actuarial services in line with regulation 62 of the Local Government Pension Scheme Regulations 2013 as they must obtain an actuarial valuation of the assets and liabilities of its pension fund as at 31 March 2016 and every third year afterwards and obtain a report by an actuary in respect of the valuation.

The report noted that the Fund appointed Hymans Robertson (Hymans) with a contract start date of the 16 July 2018 and that at the Pensions Committee meeting on the 5 November 2024, members agreed a short-term extension to 30 June 2026, to avoid the risk of potentially changing actuary part way through a valuation year.

The report recommended that the Committee note the performance of the Fund's Actuary during the period 1 October 2024 – 30 September 2025.

Pension Fund Risk Register

The committee was scheduled to receive an updated version of the Havering Pension Fund Risk Register, which details the potential risks the Fund is exposed to, and the controls in place to manage those risks.

The report pack stated that risk management is a key responsibility of those charged with Pension Fund Governance and the need for effective risk management is reflected throughout Local Government Pension Scheme (LGPS) guidance and regulation.

The report recommended that the Pensions Committee approve the updated Pension Fund Risk Register November 2024, attached as appendix A.

Review of Governance Compliance Statement

The committee was scheduled to review the Governance Compliance Statement.

The report pack stated that the London Borough of Havering, as an administering authority, has a duty to keep the Governance Compliance Statement under review and make revisions as appropriate and that the Governance Compliance Statement and the extent of compliance checklist is set out in appendix A.

The report recommended that the committee approve the amendments to the Governance Compliance statement and consider and agree the Governance Compliance Statement.