The Pensions Committee of Barking and Dagenham Council met on 11 June 2025, and discussed the latest quarterly monitoring report, the implications of new government guidance on Local Government Pension Scheme (LGPS) pooling, and approved several applications for admitted body status within the pension fund. The committee also noted the minutes of the Pension Board meeting held on 19 March 2025.

LGPS Pooling Update

The committee discussed the government's response to the LGPS Fit for the Future consultation, which was published on 29 May. Nick Vickers, Interim Head of Treasury and Pensions, explained that the response would bring about fundamental changes to the management of the LGPS, with a much enhanced role for the pools and a substantial reduction in the role of administering authorities.

The main proposals on pooling are:

• All LGPS assets to be pooled by 31 March 2026 with limited exceptions.
• The pool will determine the balance between active and passive management of assets.
• Strategic asset allocation will remain at Fund level.
• The implementation of Fund Investment Strategy will be fully delegated to the pools.
• Funds will take their principal investment advice from the pool.
• A proportion, unspecified, to be invested in local assets which for Barking and Dagenham is likely to be London.
• LGPS responsible Investment Strategy will remain with the Fund.

Councillor Mukhtar Yusuf raised concerns about the implications of pooling, asking whether the council would still have the option of engaging with individual fund managers, or whether all engagement would have to be through the London Collective Investment Vehicle (LCIV). Nick Vickers, Interim Head of Treasury and Pensions, confirmed that all dealings would have to be through the London CIV.

Councillor Mukhtar Yusuf voiced concerns that this might diminish the pension committee's ability to be agile and questioned how this would sit with the overall governance structure. Nick Vickers, Interim Head of Treasury and Pensions, responded:

It is just such a fundamental... So I was rereading today the government's responses to the pooling questions, which they published their response on the 29th of May. And they've largely ignored the responses. So overwhelming response. So 54% of respondents were against investment advice being provided through the pool. So that's 54% against, 30% in favour, and they completely ignored the fact that the overwhelming majority of respondents were against it.

Nick Jellema of Hymans Robertson, the council's investment advisor, added that the pools will determine the balance between active and passive management¹. He suggested that the pensions committee would need to direct a lot of attention and oversight to the London CIV.

John Dawe, Senior Governance Officer, said that it sounded like the role of the pensions committee was being degraded and disempowered.

Councillor Tony Ramsay raised concerns about the timing of the changes, asking whether it was possible to implement them by 31 March 2026. He also asked for clarity on the appointment of a senior officer responsible for the management of the fund and whether the independent advisor could be the investment consultant. Nick Vickers, Interim Head of Treasury and Pensions, responded that it was doable through a legal route. He added that the assumption was that the senior LGPS officer would not be the Section 151 officer².

Councillor Tony Ramsay also noted that two of the eight pools, Access and Brunel, had been judged as not being fit for purpose and had been disbanded. Nick Vickers, Interim Head of Treasury and Pensions, responded that Access had not set themselves up in the way that the London CIV had, and nobody really seemed to know why Brunel had been abolished, except for the fact that the Treasury wanted six pools, not eight.

Nick Jellema of Hymans Robertson added that the scrutiny of investment managers had always been a core part of the role of the committee and that this would change to scrutiny of the London CIV. He said that the London CIV were understating how difficult the role was going to be, working with 32 London boroughs and the City of London, who do things in very different ways.

Pension Fund Quarterly Monitoring Report

The committee considered the quarterly monitoring report for the period 1 January to 31 March 2025. Nick Vickers, Interim Head of Treasury and Pensions, reported that the fund saw a small fall in value in this quarter. The fund valuation at 31 March 2025 was provisionally £1,527.5 million, a decrease of £10.6 million from its value at 31 December 2024. During the quarter, the fund returned -0.65%, outperforming its benchmark return of -1.22% by 0.57%.

Nick Vickers, Interim Head of Treasury and Pensions, highlighted paragraph 3.4 of the report, which compared the fund's performance against the Pension Investment Research Consultants (PERC) average for local authority funds. He noted that although the fund had struggled to achieve its benchmark returns, it had performed quite positively compared to the average local authority fund.

Councillor Mukhtar Yusuf asked whether Kempen were going to be keeping up their strong performance. Nick Vickers, Interim Head of Treasury and Pensions, drew attention to a table on page 22 of the pack, which provided some returns on different parts of the equity index. He noted that the MSCI value index delivered a 1.7% return in the most recent quarter, and Kempen had slightly outperformed that.

Councillor Tony Ramsay noted that the performance of the fund over five years was down, underperforming its benchmark by 0.44%. Nick Jellema of Hymans Robertson responded that Bailey Gifford and Kempen had struggled, and generally active equity managers had struggled in recent years. He added that it was not sustainable to have active equity managers underperforming to that extent over long periods.

The committee noted the report and specifically the performance of the fund collectively and the performance of fund managers individually.

Applications for Admitted Body Status

The committee considered applications for admitted body status from several organisations. Nick Vickers, Interim Head of Treasury and Pensions, explained that these were primarily situations where an employer within the scheme had outsourced a contract. He said that Justine Spring, Pensions Manager, had been picking up on things that should have been getting through the system better than they had been.

The organisations applying for admitted body status were:

• Alliance Partnership for Parsloes and Monteagle Schools
• Atlas for Partnership Learning Academy Trust
• Edwards & Ward for St Margarets School
• Innovate Services for Dagenham Park School
• Taylor Shaw for Goresbrook School
• Nourish for Grafton School
• Reside for LBBD

Nick Vickers, Interim Head of Treasury and Pensions, advised that subsequent legal advice had been received stating that because Reside was a wholly owned arm's length LBBD company, there did not need to be a separate admission agreement.

The committee agreed in principle, subject to final legal documentations, the admission agreements for Alliance Partnership, Atlas for Partnership, Edwards and Ward, Innovate Services, Taylor Shaw and Nourish.