This meeting of the Merton Council Pensions Committee was scheduled to centre around a review of the Fund's recent performance, a discussion of the imminent 2025 Actuarial Valuation, and the Fund's responsible investment policy. The committee was also scheduled to receive an update on the ongoing national consultation on the Local Government Pension Scheme's (LGPS) future.

Merton Pension Fund Performance - Quarter ending September 2024

The committee was scheduled to consider a report on the Merton Pension Fund's performance in the quarter ending 30 September 2024.

The report, prepared by Assistant Director of Finance and Digital Roger Kershaw, highlighted that the Fund's total market value had increased from £938.8 million to £946 million over the quarter. However, despite this absolute growth, the Fund underperformed its benchmark by 0.8% during the same period.

Over the 3 months to 30 September 2024, total Fund assets returned 2.2% compared to the benchmark of 3.0%. This equates to an underperformance of 0.8%.

Over the last 12 months, the Fund performance was 12.7% (benchmark 14.9%) and 3-year annualised performance was 1.6% (benchmark 6.1%). These again underperformed the benchmark.

The annual Actuarial performance target is 4.2%.

— Merton Pension Fund Performance Report - Qtr ending Sept 2024

The report attributed this underperformance to several factors, including suppressed equity markets and underperformance in Emerging Markets investments. The report also noted the completion of an initial investment in the M&G Secured Property Income Fund, with approximately £12 million worth of units purchased.

Looking at individual asset classes, the report highlighted the continued strong performance of Private Credit and Infrastructure, which outperformed their benchmarks and were identified as top contributors over the previous 12 months. Conversely, Global Equities remained subdued, with only the BlackRock ACS World Low Carbon Equity Tracker meeting its benchmark.

The report also provided an update on the ongoing divestment from the BlackRock UK Property Fund. While an instruction to redeem units has been issued, the divestment is yet to be actioned due to a redemption queue.

Merton Pension Fund - Responsible Investment Policy

A discussion was scheduled about the Merton Pension Fund's Responsible Investment Policy. The policy, which is intended to ensure the Fund's investments are managed in a responsible and sustainable manner, considers environmental, social, and governance (ESG) factors.

LGPS - Fit for Future - Consultation

The committee was scheduled to receive an update on the Local Government Pension Scheme (LGPS) - Fit for Future Consultation. This national consultation seeks input on potential changes to the LGPS to ensure its long-term sustainability and affordability for both employers and scheme members.

Actuarial Update - March 2025 Actuarial Valuation

The committee was scheduled to receive an update in preparation for the March 2025 Actuarial Valuation.

2022-2023 Audit Report - EY

The committee was scheduled to receive the 2022-2023 Audit Results Report from Ernst & Young (EY), a multinational professional services network. The report was to be presented as a supplementary item to the agenda.

Quarterly Fund & Investment Managers Performance Review (July-Sept 2024)

The committee was scheduled to review the Fund and Investment Managers’ performance for the quarter July-Sept 2024.