The Pension Fund Committee of Westminster Council met on Thursday 20 June 2024 to discuss the fund's financial management, investment performance, and administrative updates. Key decisions included approving an admission agreement for Innovate Services Ltd, noting the fund's risk register and cashflow position, and approving the publication of the Responsible Investment Statement.

Admitted Body Request - Innovate Ltd

The Committee gave consent for the City of Westminster Pension Fund to enter into an admission agreement with Innovate Services Limited, with Harris Academy acting as guarantor. This agreement will allow two long-term employees, who transferred to Innovate Services Ltd following Harris Academy's outsourcing of catering services, to retain access to the Local Government Pension Scheme (LGPS). The Committee noted that Harris Academy had not informed the Fund of the new contract prior to its commencement, despite previous requests, and requested that officers remind Harris Academy of the new Pension Administration Strategy (PAS) which came into effect in April 2024, and that future instances of non-compliance could incur potential charges.

Pension Administration Update

Sarah Hay, Strategic Pension Lead, presented an update on pension administration, highlighting that Hampshire Pension Services (HPS) continues to meet 100% of its Key Performance Indicators (KPIs) for February to April 2024. The online member portal sign-up rate has increased to 43.70% as of April 2024, with officers planning to engage with employers to increase this further, particularly for those with below 40% sign-up rates. The backlog project, which initially comprised 611 cases, has been reduced to just two outstanding cases. The Committee also discussed the issue of unclaimed death grants, noting that officers are proactive in offering support, but some individuals remain unresponsive. A complaint regarding pension estimates was addressed, with HPS confirming that an exceptions report has been run to ensure no other members are in a similar situation.

LGPS Projects & Governance Update

The Committee received an update on various projects and governance activities aimed at improving the administration of the City of Westminster Pension Fund LGPS. A significant focus was placed on the Guaranteed Minimum Pension (GMP) project, where the Committee agreed to proceed with Option 4: unmitigated record correction. In cases of complaint or hardship appeals related to GMP corrections, officers will investigate on a case-by-case basis. Updates were also provided on the McCloud project, the Pension Dashboard Programme, the Pension Website project, and upcoming audits.

Fund Financial Management

Phil Triggs, Tri-Borough Director of Treasury and Pensions, presented the fund's risk register, noting that the top five risks remain largely unchanged, although the trend for Liability Risk has moved downwards. The asset and investment risk remains the most significant concern due to geopolitical and economic uncertainty. The cashflow position for the Pension Fund bank account and cash held at custody was reported as stable, with a rolling 12-month and 3-year forecast also presented. Discussions also touched upon potential future risks related to central government's analysis of LGPS investment manager fees and the number of individual pension funds within the LGPS. The Committee noted the forthcoming general election and its potential impact, though it was felt that a future Labour administration would likely maintain an interest in LGPS analysis. Officers are awaiting the provision of pooling guidance and the good governance guide.

Quarterly Performance Report

The Committee received a report on the fund's investment performance to 31 March 2024, presented by Jonny Moore of Isio, the fund's investment advisor. The fund returned 5.4% net of fees over the quarter, slightly underperforming the benchmark by 0.2%. Over the past 12 months, the fund returned 13.3%, underperforming the benchmark by 1.6%. The estimated funding level has increased to 163% as of 31 March 2024. The report highlighted that the fund's performance was largely driven by its equity exposure, with global equity markets continuing their recovery, partly due to the performance of US technology stocks. The Committee noted that Westminster's position is within the top 7% of funds nationally. The report also detailed the asset allocation of the fund, showing a continued overweight position in equities. Appendices 2, 4, and 5 were approved for non-publication due to containing commercially sensitive information.

Responsible Investment Statement

Ruby Vuong, Pension Fund Manager, presented the drafted Responsible Investment (RI) Statement for 2024. The statement outlines the fund's approach to responsible investing and its carbon journey since 2019, measured against the United Nations' Sustainable Development Goals. The Committee commended the officers on the statement's preparation and supported its publication on the Council's website, delegating authority to the Tri-Borough Director of Treasury and Pensions for its publication.

Documents Mentioned:

• Agenda frontsheet 20th-Jun-2024 18.30 Pension Fund Committee
• PFC 20062024 Quarterly Fund Performance
• Appendix 1- 2024 Q1 Rpt Westminster Pension Fund
• Appendix 2 - Risk Register Governance
• 07.03.24 Pension Fund Committee Minutes DRAFT
• Appendix 2 - Risk Register Administration
• Pension committe admitted Body 20th June 2024 Draft
• Pension committee admin service Update 20th June 2024
• 6. PFC 20062024 FFM COVER REPORT
• Appendix 3 - 20240423 City of Westminster Pension Fund - Funding update at 31 March 2024
• Appendix 1 - Risk Matrix
• Public reports pack 20th-Jun-2024 18.30 Pension Fund Committee
• Printed minutes 20th-Jun-2024 18.30 Pension Fund Committee