The Pension Fund Committee met on Thursday 1 February 2024 to discuss the Council's request to ease pension deficit contributions and to approve the 2022/23 draft annual report. The committee agreed to an 8% reduction in the Council's employer contribution rate for the next two years, subject to certain safeguards, and approved the publication of the 2022/23 draft annual report.

Contribution Review Policy

The committee formally adopted the proposed changes to the Contribution Review Policy. This revised policy clarifies how requests from local authorities to review their pension contribution rates will be considered, taking into account not only the authority's absolute ability to meet its obligations to the Pension Fund but also its ability to do so consistently with its other public responsibilities. The changes were made following legal advice and extensive consultation with interested parties, including employers within the Fund.

Contribution Review

The committee considered the Council's request to amend the Rates and Adjustment Certificate to reduce its employer contribution rate. Having reviewed the Council's financial situation, legal advice, the revised Contribution Review Policy, and actuarial advice, the committee agreed to an 8% reduction in the London Borough of Barnet's employer contribution rate for the period from 1 April 2024 to 31 March 2026. This reduction is contingent on the Council agreeing to implement specific safeguards, including demonstrating commitment to a long-term contribution rate within its Medium Term Financial Strategy and providing regular financial performance updates. The committee also agreed that schools should be made aware that this contribution reduction is for a two-year period only and that their budgets would need to be adjusted accordingly after this period.

External Audit and Accounts Update

The committee approved the 2022/23 Draft Annual Report and agreed to its publication. They noted that the report would reflect that the investment policy would be superseded. The committee was advised that there were no specific regulations dictating who should sign the Annual Fund Report and Annual Accounts, but that it would be good practice for the sitting Chair to sign these documents.

Investment Strategy

The committee noted the investment transactions that occurred between October and December 2023 and the planned transactions for 2024. They were informed that the transition from Schroders Ltd Corporate Bonds to the LCIV Buy and Maintain Fund was underway.

Pooling Update

The committee noted the importance of pooling and received an update on the government's response to the LGPS Investment Consultation. They were reminded of the government's targets for assets to be transferred to a Fund's Pool by March 2025 and that a plan would be devised to ensure compliance.

Responsible Investment Update

The committee noted the progress made towards the Fund's NetZero Strategy, including investigations into Paris-Aligned funds and the exploration of Nature-Based Assets. They were advised that the Carbon Credits market is still undeveloped and that any risks associated with it would need to be understood before investment decisions were made.

Policies and Procedures Report

The committee noted the update on the policies and processes for the Barnet Pension Fund and the dates for future reviews. They were reminded that the Contribution Review Policy was being reviewed and consulted on and would be discussed at their next meeting.

Administration Performance Report and Update on Other Administration and Legislative Matters

The committee noted the current administration performance by West Yorkshire Pension Fund (WYPF) and updates on other administration and legislative matters. They were informed that a Stage 2 IDRP case had been awarded £2,000 compensation due to long-standing maladministration. The committee approved the new draft Communication and Engagement Policy.

Knowledge and Understanding

The committee noted the report summarising actions to keep records of training undertaken by the Board and Committee members. They also noted the training options available and the recommendation that committee members complete the LGPS Online Learning Academy (LOLA) training by 31 March 2024.

Pension Fund Committee Work Programme

The committee noted their Work Programme for 2023 to 2024.

Admissions, Cessations and Bond Status Update

The committee noted the progress on outstanding admissions, cessations, and bond agreements/renewals. They were advised that the new Admission Policy had been forwarded to schools for consideration and that a webinar would be set up in February for schools to address any points regarding the new policy, which would come into effect in April. The committee approved the admission of Sancroft Community Care into the Barnet Pension Fund.

Pension Fund Investment Performance Report

The committee noted the investment activities and performance of the Pension Fund up to 30 November 2023. They held a discussion regarding the underperformance of the London CIV Sustainable Exclusion Global Equity Fund and agreed that their concerns regarding its poor performance should be communicated to the London CIV. They also received feedback on a meeting with Fiera Real Estate Fund and were advised that a programme for learning more about Fund Managers was being devised.