This meeting considered a number of reports on the financial position of the Wandsworth Pension Fund, its investments, training policy, and a proposal for a new policy on reporting breaches.

The most significant item on the agenda was the triennial review of the Fund's investments.

Investment Performance 2024/25 Q3

The meeting received the report on the investment performance of the Wandsworth Pension Fund for the quarter ending 31 December 2024 (Paper No. 25-121 Quarterly Investment Performance to December 2024).

The report summarises the total value of the Fund's investments at £3,236.2 million and sets out the performance of each of the Fund's investments. The report notes the performance of the Fund's passive global equity manager, Legal & General:

Passive managers are expected to have flat performance at or very close to the benchmark, and any significant variance in either direction would be cause for concern as it would evidence ineffective benchmark tracking. Legal & General’s performance is consistently close to the benchmark so meets this requirement.

The report goes on to describe how the Fund's active global equity managers are performing, noting some recent underperformance in these funds:

Over the last 3 years, all 3 active managers have had below benchmark returns more often than above benchmark returns.

The report notes the transfer of assets from Allianz and Janus Henderson to the London CIV Buy and Maintain all maturity bond fund was completed in October 2024.

The report describes the performance of the Schroders SCREF fund as concerning.

Schroders SCREF fund is below the benchmark for the 9th consecutive quarter, and are showing underperformance in their 1 and 3 year returns.

It also notes the underperformance of the Nuveen UKPF fund, which has now been merged into a new fund, TPUT.

Training Policy and Update

The Committee were asked to consider a report proposing an updated Training Strategy (Paper No. 25-120 Training Policy and Update) which covers the Joint Pensions Committee, the Local Pension Board (LPB), and senior officers of the Fund.

The strategy sets out the legal requirement for training, as set out by the The Pensions Regulator (tPR)¹:

The General Code of Practice requires the governing body of a pension fund to “be able to demonstrate the basic level of knowledge and understanding needed to run their scheme within six months of their appointment” and then to “review their own knowledge and understanding and identify any gaps at least annually, particularly in relation to changes in legislation or their scheme”.

The report notes that the government have committed to making this a legal requirement for Committee members. The report describes how Wandsworth Pension Fund already meets this requirement, making it an early adopter of the new regulations. The report sets out the Fund's proposed Training Plan for the coming year, and describes the online training that is provided to committee members.

Breaches Policy

This report proposed the adoption of a new Breaches Reporting Policy (Paper No. 25-122 Wandsworth Council Pension Fund Reporting Breaches Policy) that sets out how the Council will comply with its legal duty to report breaches of the law to The Pensions Regulator.

The report summarises the legal context for this obligation:

The Pensions Regulator's General Code of Practice (the Code) took effect on 28 March 2024. The Regulator confirms in the Code that the legal duty to report breaches is wide – it covers not only day-to-day administrative tasks (such as processing benefits and record-keeping) but also anything that could affect member benefits, and therefore extends to matters such as investment management, custody of assets and scheme funding.

The report goes on to explain who is covered by the policy, what the thresholds for reporting are, and what the process will be for investigating potential breaches and reporting them.

Pension Fund Cash Budget 2024-2028

The Committee received a report on the projected income and expenditure of the Wandsworth Pension Fund over the next three years (Paper No. 25-119 Pension Fund Cash Budget 2025-26).

The report summarises the Fund's current position:

The budget shows that the net cash flow from dealing with members is consistently negative. This means that an element of the Fund’s investment return needs to be used to support these payments, as well as the costs of administration, governance and investment management.

The report goes on to explain how the projected increase in payments to members will be met from a combination of employer contributions and investment returns.

TPUT presentation

The Committee received a presentation from TPUT, the successor to the Nuveen UKPF fund. This item was not on the public agenda.