The Pension Fund Panel of Kingston upon Thames Council met on Wednesday 28 February 2024 to discuss the fund's business plan and budget for the upcoming years, alongside updates on administration, governance, and investment performance. The meeting's agenda focused on financial planning, operational efficiency, and the strategic direction of the pension fund's investments.

Pension Fund Business Plan and Budget 2024-27

The panel was scheduled to consider the Kingston Pension Fund's draft business plan for 2024-27 and its draft budget for 2024-25. These documents, presented by Rachel Howard, Interim Director of Finance / S151 Officer, were prepared in accordance with best practice and regulatory requirements. The business plan outlines the fund's objectives and activities across five key themes: Administration and Communication, Actuarial and Funding, Governance, Financial and Risk Management, and Investment. Key actions include the completion of the McCloud remedy and Guaranteed Minimum Pension (GMP) reconciliation projects, the development of pensions dashboards, and preparations for the next triennial valuation. The draft budget for 2024/25 indicated a net expenditure of approximately £720,000, a significant increase from the previous year's £82,000, largely due to a one-off prepayment of deficit contributions in 2023-24.

Pension Administration Update

An update on the key administration activities of the Shared Pensions Administration Service was provided by Rachel Howard. The report highlighted the upcoming deadline of 30 September 2025 for public sector pension schemes to connect to the government's pensions dashboards. It also noted positive improvements in The Pension Regulator's data scores for 2024 and confirmed that benefits processing performance was on target, with a reduction in overdue processes despite an increase in new ones. The report detailed progress on the McCloud remedy and GMP reconciliation projects, and provided an analysis of the benefits processing performance data, noting that leaver and transfer processes remained the largest backlog items. The update also included a review of the fund's Additional Voluntary Contributions (AVC) providers, Utmost Life and Aviva, with recommendations for future actions, including a complaint to Aviva regarding delays in fund switches and dis-investments. A breach of law concerning the late issuance of pension savings statements was also noted.

Governance and Risk Update

The panel was set to review the fund's risk register and receive an update on key governance activities, as reported by Rachel Howard. The risk register had been updated to include a new risk concerning scheme employers bearing the full cost of ill-health retirement strain if they are not self-insured or have not purchased insurance. Risk 2, related to incomplete or inaccurate member data, remained an amber risk despite improvements in data quality scores. Other governance updates included information on an upcoming joint employer forum with Sutton Council, the impending implementation of The Pension Regulator's new General Code of Practice, and the ongoing review of the Pension Administration Strategy, which was to be consulted with scheme employers.

Work Programme Update

Andrien Meyers, Head of Pensions Investments, was scheduled to present the proposed work programme for the Pension Fund Panel for the municipal year 2024-25. This indicative agenda included ongoing items such as Responsible Investment Strategy updates, preparation for the next Triennial Valuation, and regular reporting on governance, risk management, pensions administration, and investment performance. The programme also highlighted specific training sessions for panel members.

Pension Fund Investment Performance Report

The panel was to receive a report on the performance of the Royal Borough of Kingston Pension Fund (RBK PF) investments for the period ending 31 December 2023. The report, presented by Rachel Howard, indicated that the market value of the fund's assets had increased to £1,183 million, a rise of 5.4% over the previous quarter. The fund achieved a positive return of 5.3% over the quarter, outperforming its benchmark by 1.3%. One-year, three-year, and five-year performance figures were also positive, showing improvements compared to previous periods. The report detailed market reviews, including global equity and bond market performance, and provided an estimated funding level of 146% as at 31 December 2023, with a surplus of £380 million. It also included an analysis of cashflow projections and an update on Environmental, Social, and Governance (ESG) matters, specifically fossil fuel exposure.

London CIV Update

A progress update on the London Collective Investment Vehicle (LCIV) was scheduled to be presented. This would likely cover the performance and activities of the LCIV, in which the Kingston Pension Fund invests.

Urgent Items Authorised by the Chair

This item allows for the discussion of any urgent matters that may have arisen since the agenda was published and were authorised for discussion by the Chair.

Exclusion of the Press and Public

A standard resolution was included to enable the exclusion of the press and public if any exempt matter, as defined by the Local Government Act 1972, was to be considered during the meeting.