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Pensions Board - Wednesday, 4th June, 2025 7.00 pm

June 4, 2025 View on council website  Watch video of meeting or read trancript
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Summary

Councillor Ashok Patel, Chair of the Pensions Board, welcomed attendees to the meeting, where members appointed Councillor Ashok Patel as chair and Councillor Nikos Souslous as vice chair for the 2025-2026 municipal year. The board reviewed key performance indicators, a pension administration update, and the pension fund's quarterly performance, focusing on investment strategies and regulatory compliance. Overpayments totalling £39,647.59 were written off, and members discussed the upcoming pensions dashboard and its potential benefits.

Key Performance Indicators

Eleanor Dennis, Head of Pensions for Hamilton and Fulham, introduced the key performance indicators (KPIs) for the Local Pension Partnership Administration (LPPA) for January to March 2025. The report highlighted improvements in processing active deferred retirements and bereavement cases, with most cases processed above the 95% target. Councillor Ashok Patel congratulated the team on the positive performance, noting improvements across retirement states, transfers and refunds.

A minor increase in refunds was discussed, which Eleanor Dennis attributed to resource reallocation to handle increased cases in other areas. Refunds relate to individuals with less than three months of service or deferred members with minimal service, with employer contributions remaining in the fund. The committee noted the report.

Pension Administration Update

Eleanor Dennis presented a summary of pension operations, noting an increase in calls to the LPPA helpdesk and fluctuations in member satisfaction. LPPA is investigating the trends behind the low feedback. Auto-enrolment is scheduled for 1 August for members not in the scheme or the 50-50 element of the scheme.

Councillor Nikos Souslous asked about satisfaction service percentages. Eleanor Dennis clarified that of the eight responses received, 87.5% were satisfied, but the low response rate limited the conclusions that could be drawn. She requested LPPA to provide more in-depth analysis to understand the reasons behind dissatisfaction or non-response.

William O'Connell asked when people would be informed about the McLeod judgement1 and whether current retirees were being informed. Eleanor Dennis confirmed that affected members had been notified, with ongoing work to identify and notify deceased or deferred members. Calculations will be done to ensure no member is worse off, with retrospective work to recalculate and reimburse benefits if necessary.

William O'Connell raised concerns about overpayments totalling £39,647.59 written off in quarter four. Eleanor Dennis explained that these related to legacy bereavement cases where recovery efforts over five years had been unsuccessful. After five years, there is a legal obligation to write off the debt. Efforts to recover monies include using tracing companies and contacting next of kin.

Councillor Ashok Patel suggested notifying banks of pension payments to freeze accounts upon death, which would alert the council. Eleanor Dennis confirmed that this already happens.

William O'Connell enquired about the pension dashboard, scheduled to come live in October 2025, and how it would help matters. Eleanor Dennis clarified that the dashboard is a government initiative for individuals to access all their pension information, with no set date for public access. The aim is to help individuals trace forgotten pensions and encourage self-provision for retirement.

William O'Connell asked about errors requiring LPPA to support employers. Eleanor Dennis explained that employers submit monthly data on scheme members, and errors occur when the data is not in the required format. Correct data is crucial for accurate benefit statements and fund liability management.

The committee noted the contents of the report.

Pension Fund Quarterly Update

Sian Cogley, pension fund manager, presented an update on performance to the quarter ended 31 December 2024. More recent information indicated that the market value of assets decreased by £19 million to £1.409 billion in the quarter to 31 March 2025. The fund underperformed its benchmark net of fees by 0.05%, delivering an absolute return of minus 1.27% over the quarter, but a positive return of 3.73% over the year.

The pension fund's response to the fit to the future consultation2 was submitted on 15 January 2025. The consultation outcome, released on 29 May 2025, included the delegation of investment strategy implementation to pools, with the London Collective Investment Vehicle (LCIV) as the relevant pool for this fund. Principal advice on investment strategy is to be taken from or through the pool, and all assets should be transferred to the pools by 31 March 2026. Representatives from Darwin and Aberdeen will attend the committee meeting on 25 June 2025.

William O'Connell questioned the equity asset allocation, noting it was 5% over benchmark in uncertain times. Sian Cogley responded that the committee could discuss rebalancing on 25 June, but a triannual valuation was underway, and the investment strategy would likely be revised at the end of the year, with input from the London Collective Investment Vehicle.

William O'Connell asked about the value of liabilities in appendix one. Sian Cogley explained that liabilities are the pensions due to be paid to pensioners and their present value.

William O'Connell raised concerns about the LCIB global equity, which reported a loss of 0.32% quarterly and 0.61% annually. Patsy Ishmael explained that the benchmark for this fund is cash plus a margin, making it challenging to outperform when cash is performing well. The fund's mandate is to protect capital, involving expensive protection measures in uncertain times. The LSF is monitoring the fund's performance, and the role of the fund is under review across all partner funds.

William O'Connell referred to commentary that the asset manager failed to fully take part in short-term global profits emanating from President Trump's presidential victory. Patsy Ishmael explained that equities rallied after President Trump was elected, but the manager, Ruffa, wasn't positioned to benefit from that short increase in equity values. Ruffa has been positioning for a downturn in asset values, betting against equities.

William O'Connell argued that an asset manager should respond to changing markets. Patsy Ishmael clarified that Ruffa's mandate is to maintain a contrarian view and offer an uncorrelated position in the portfolio, benefiting when equities fall.

William O'Connell asked about the Aberdeen Long Lease Property Fund, questioning whether it was a commercial or residential investment and noting the average lease terms were only about 26 years. Sian Cogley provided updated figures, stating that the fund was valued at £52 million as of 31 March 2025, with positive returns of 2.57% since inception in 2015. The 26-year lease strikes a balance between income, durability and adapting to the market.

William O'Connell raised concerns about being locked into a 10-year lock-in period with Darwin and asked if there was a lock-in period for this fund. Patsy Ishmael clarified that it was not a closed-ended fund like Darwin, and redemption requests could be made, generally with a six-month period before action.

William O'Connell asked what the total percentage of monies being held in illiquid funds was. Patsy Ishmael stated that 19% of the net assets of the fund could not be liquidated within a month, including property-based, infrastructure and fixed income funds.

William O'Connell questioned a figure of £1,247,000 for net expenses in December 2024. Sian Cogley explained that this was due to receiving some redemption monies in that quarter, which were transferred from the bank account to the custodian account.

The committee noted the report.


  1. The McLeod judgement relates to age discrimination in public sector pension schemes. 

  2. The fit to the future consultation is a government consultation on the future of local government pension schemes. 

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