The Pension Fund Committee of Westminster Council met on Thursday 17 October 2024 to discuss the fund's asset rebalancing strategy, pension administration updates, and the latest performance reports. The meeting also covered financial management, the annual report and accounts, and the Government Actuaries Department's triennial report on the Local Government Pension Scheme.

Asset Rebalancing

The committee was scheduled to consider a report detailing the fund's current strategic asset allocation as of 31 August 2024, compared to its target allocation. The report outlined recommended rebalancing options to align the current asset allocation with the strategic target. These recommendations included liquidating a portion of overweight global equities holdings, topping up the London CIV Multi Asset Credit underweight balance, reviewing the Abrdn Long Lease Property fund, and topping up the Pantheon and Quinbrook infrastructure mandates.

Pension Administration Update

A report was scheduled to provide an update on the performance of Hampshire Pension Services (HPS) against Key Performance Indicators (KPIs) for May to August 2024. It was noted that HPS reported 100% compliance with agreed KPIs each month. The update also covered ongoing data work and the latest on the annual returns, with a significant reduction in queries compared to previous years. Improvements in employer data quality were highlighted, with some employers moving from a 'red' or 'amber' rating to 'green'.

Pension Projects & Governance Update

This agenda item was set to provide an update on various projects and governance activities undertaken by the Pensions and Payroll Team to improve the administration of the City of Westminster Pension Fund (COWPF) Local Government Pension Scheme (LGPS). Updates were expected on the Guaranteed Minimum Pension (GMP) project, with the first set of results from manual cases anticipated in November. The Pension Website project was also due for an update, with a new expected completion date of 31 March 2025 due to resource availability.

Quarterly Performance Report

The committee was scheduled to receive a report presenting the performance of the Pension Fund's investments to 30 June 2024, along with an update on the London CIV and the funding level. The report indicated that the Fund returned 1.4% net of fees over the quarter, underperforming the benchmark by 1.0%. The underperformance was primarily attributed to the LCIV Global Equity Quality Fund and the LCIV Global Alpha Paris Aligned Growth Fund.

Fund Financial Management

This report was scheduled to present the risk register, divided into governance (investment and funding) and pensions administration. The top five risks were to be highlighted, along with an update on the cashflow forecast for the next three years, including actuals to 30 June 2024 for the Pension Fund bank account and cash held at custody. The bank/cashflow position was noted as continuing to be stable.

Pension Fund Annual Report and Accounts

The committee was scheduled to review the draft Westminster Pension Fund Annual Report and Statement of Accounts for the year ended 31 March 2024. The report indicated that the Fund's net assets were £2.014bn at 31 March 2024, a net increase of £219.6m from the previous year, largely due to positive performance within equity mandates. The Fund returned 13.3% over the financial year, underperforming its benchmark by 1.6% net of fees.

Government Actuaries Department Section 13 LGPS Triennial Report

This report was scheduled to provide an update on the Government Actuary's Department's (GAD) Section 13 report concerning the 2022 LGPS triennial actuarial valuation. The review indicated that LGPS fund valuations were compliant with relevant regulations and detailed a higher funding level compared to 2019, with strong asset returns over the three-year period. GAD made three recommendations related to the Scheme Advisory Board (SAB) and its review of guidance on Funding Strategy Statements (FSS). The Westminster Pension Fund received green flags across all GAD tests, indicating a strong position with a funding level of 127%, exceeding the average rate of 119%.