The Pension Board of Waltham Forest Council met on 12 June 2024 to discuss pension fund investments, training, and administration. Key decisions included recommending that the Pension Fund Committee raise concerns with the London LGPS Collective Investment Vehicle (LCIV) regarding potential human rights violations in investments and to review the council's ethical investment strategy. The Board also agreed that members would complete training needs assessment forms by 31 June 2024.

Investment Issues: Occupied Palestinian Territories and LGPS Sharia Law Compliance

The Board considered concerns raised by the Pension Committee regarding the fund's exposure to companies accused of human rights abuses, particularly in the Occupied Palestinian Territories, and the Sharia law compliance of the Local Government Pension Scheme (LGPS). It was noted that fund managers primarily make investment decisions, and the Council has limited direct control, though it can set investment strategies and asset classes. However, pooling arrangements and the selection of fund managers are managed by the London CIV. The Board was informed that the London CIV has stated it continues to monitor companies accused of human rights abuses and engages with them rather than divesting. Any divestment decisions would need to consider the impact on the fund's funding level.

The Board recommended that the Pension Fund Committee:

• Continue to raise concerns with the London LGPS Collective Investment Vehicle (LCIV) regarding potential exposure to firms invested in areas where human rights violations may have occurred, such as the Occupied Palestinian Territories and the Uyghur Autonomous Region.
• Urge the LCIV to consider ways of reducing or eliminating exposures to such investments.
• Request the LCIV to update its ethical investment policy to ensure it is not complicit in any such activities through its investments.
• Review the Council's own investment strategy to reflect ethical investment principles.

Regarding Sharia law compliance, the Board was informed that a report commissioned by the Scheme Advisory Board concluded that Muslim employees can continue to contribute to and benefit from the LGPS as part of their contractual arrangement with their employer.

Training: Roles and Responsibilities and Completion of Training Needs Assessments

Debbie Drew, Assistant Director of Pensions and Treasury Management, provided a training presentation on the roles and responsibilities of Pension Board members. The Board agreed that officers would update them on the number of times the Pension Fund Committee had deferred a decision in the last municipal year and that the clerk would provide information on the application process for becoming an observer on the Pension Fund Committee.

Furthermore, the Board agreed that members should complete their training needs assessment forms and return them to Debbie Drew by 31 June 2024. This action is intended to facilitate the development of a formal plan to address identified training needs.

LGPS Update

Jonathan Perera provided an update on current issues impacting the Local Government Pension Scheme (LGPS). This included information on the actuarial valuation, new modules within The Pensions Regulator's (TPR) General Code covering practice, climate control, cyber-controls, and scam identification. The Board noted that a timescale for a gap analysis is being established to ensure policies are prepared for compliance with the General Code. Training will be provided regarding conflicts of interest for officers who are both scheme members and attending meetings in a scheme management capacity. Employers will receive training on actuarial valuations and their contributions.

The Board was informed that the McCloud judgement would impact the LGPS, requiring data review for accurate calculations, though it is not expected to affect a large number of members. Issues and legislative gaps have been identified since the abolition of the lifetime allowance in April 2024, with guidance published by His Majesty's Revenue and Customs (HMRC). The national dashboard will be produced by alternative providers, with pension administration services looking at how internet service providers can access it. A government letter has prompted Pension Committees to review the efficiency of pooling funds, with a consultation underway on merging funds across London. The Pension Committee will receive an update on the 2025 valuation at its next meeting.

The Board agreed that the gap analysis would be shared with them and that officers would update the Board on the London Borough of Waltham Forest's (LBWF) view regarding the pooling consultation.

Investment Strategy and Performance Update

The Board received an update on the fund's investment performance. As of 31 March 2024, the fund had increased by £88m, showing improved performance from fund managers in the last quarter. Officers continue to hold quarterly meetings with fund managers, and concerns have been highlighted regarding investments in Darwin Leisure. The Board noted the report and agreed that at the next update, officers would highlight any changes in investment that the Committee was considering.

Pension Administration Service Update

Martin Doyle, Head of the Pension Shared Service (PSS), presented an update on pension administration. The PSS has been reviewing data quality, and some LBWF fund employers, primarily academies, have been recharged for missing data, with most recharges paid. The PSS has seen an improvement in performance following these actions. The Board congratulated the PSS for exceeding their targets.

Risk Strategy

Consideration was given to the risk strategy report. Officers aim to agree on the framework for scoring risk mitigation by the next Board meeting. Risks related to investment issues will be included in the responsible investment column, which Mercer confirmed would comply with the General Code. The Board noted the report.

Action Tracker

The Board received an update on the action tracker. It was noted that an annual overview of current fund managers would be presented to the Board. Officers would provide an update on the 85-year rule at the next meeting, and the Pension Shared Service would circulate an update on suspended members within the scheme.

Exclusion of Press and Public

The Board resolved to exclude the press and public from the remainder of the meeting to consider exempt information related to financial or business affairs.