The Havering Council Pensions Committee was scheduled to convene to discuss the pension fund's performance, accounts, and future plans. The agenda included monitoring the fund's performance for the quarter ending March 2025, reviewing the pension fund accounts for 2024/25, and considering the annual report on the committee's work, along with a business plan for 2025/26-2027/28. Additionally, the committee was expected to discuss and approve the pensions administration budget for 2025/26.

Pension Administration Budget 2025/26

The committee was asked to consider the proposed budget of £0.740m for the Local Pensions Partnership Administration (LPPA) pension administration service for 2025/26. This figure represents a £92,000 increase on the original budget set for 2024/25.

The report pack noted that the increase was driven by two factors:

• an increase in membership numbers
• an increase in the price per member

The report pack stated that LPPA take part in an annual CEM Benchmarking Survey, which reviews the cost per member rates across 15 pension administrators (with 10 administering LGPS). The price per member rate for administration services, is the same rate per the other 10 local authority funds where LPPA provide LGPS administration services.

The report pack also noted that all LGPS are responsible for providing data on membership and financial data of the funds as part LGPS Funds Account Return (SF3), which reports administration and management costs of LGPS funds to Ministry of Housing, Communities & Local Government (MHCLG). Reviewing the latest data available (2023-24) Havering rank in the lower mid quartile based on Management costs per member.

Annual Report on the Work of the Pensions Committee and Business Plan

The committee was scheduled to review its activities during 2024/25 and agree on a business plan for the next three years. The Business Plan 2024 25 Appendix A DRAFT set out the key targets, methods of measurement, and financial estimates for the fund. It also covered major milestones, issues for consideration, training provisions, and recommended actions.

The report pack included a summary of the key issues that the Pensions Committee was likely to consider in the coming years:

• Restating investment beliefs
• Continued development/monitoring and implementation of Climate Risk Policy
• Developing and implementing an approach for climate-related engagement, in conjunction with the London CIV¹
• Compliance with Task Force on Climate Related Financial Disclosures (TCFD) reporting
• Implementation of the long-term Investment strategy
• Considering a local investment agenda
• Potential consideration of Private Equity investment
• London CIV Pooling progression/Continued consideration of transfer of assets to the London CIV
• Considering reallocating into Private Debt/Infrastructure close ended funds and review Phase 2 implementation of property strategy within LCIV
• Governance review of London CIV
• Planning for SAB Good Governance guidance compliance once guidance is issued
• TPR New Code of Practice compliance check develop action plan
• New training policy to reflect Good Governance and TPR compliance
• New contract Actuary (current contract expires 30 June 2026)
• New contract Investment Advisor (current contract expires 31 March 2026)
• New contract Custodial Services (current contract expires 30 September 2026)
• Administration issues i.e. ongoing work associated with the McCloud ruling² – readiness for Pensions Dashboard
• Covenant Risk Review
• SAB developments
• Consideration of LGPS Regulation changes and consequential policy, as applicable
• Topical issues discussed as appropriate
• Continued training and development (include training programme following Local Elections May 2026)

Pension Fund Performance Monitoring

The committee was scheduled to receive a report on the performance of the Pension Fund for the quarter ending March 2025. The PF Performance Monitoring Qtr end Mar 25 report FINAL provided an overview of the fund's investments, the performance of individual investment managers against their targets, and any relevant updates to the Local Government Pension Scheme (LGPS).

The report pack noted that the total value of the Fund's assets as at 31 March 2025 was £1,007.9m, a decrease of £10.7m over the quarter. The overall fund performance of -1.24% underperformed the tactical benchmark by -0.57% and underperformed against the strategic benchmark by -0.25%.

The decrease in valuation was primarily attributed to the Fund's allocation to 'Growth' assets, as equity allocations performed negatively over the period. The Fund's allocation to 'Income' assets also fell in value, remaining approximately 4% below the fund target allocation. However, the Fund's allocation to 'Protection' assets increased in value, mainly due to the increase in cash held in its Russell currency hedging overlay, as sterling strengthened significantly against the US Dollar over the quarter.

The committee was also scheduled to receive a presentation from Russell, the Funds Currency Hedging Manager, for an overview on the Hedging mandate.

Pension Fund Accounts 2024/25

The committee was scheduled to review the unaudited PF Accounts 24-25 - report as at 31 March 2025. The report pack noted that the Accounts had been compiled in line with the Chartered Instituted Institute of Public Finance & Accountancy (CIPFA) "LGPS Funds Accounts 2020/21 example accounts.

The report pack stated that the Net Assets of the Fund had increased to £1,008m in 2024/25 from £969m in 2023/24, an increase of £39m. The increase of £39m was compiled of change in market value of investments (£21m), investment income of (£20m) and net reductions of cash of £2m.

The report pack also noted that the 2024/25 Pension Fund accounts audit was ongoing, and that Ernst & Young LLP are the appointed auditors for the London Borough of Havering.