The Kingston upon Thames Council Pension Board met virtually on 9 July 2025, and welcomed new members Kola Agbulla from Kingston University and Sandeep Bajwa from Achieving for Children. The board discussed pension administration performance and projects, governance and risk, and investment strategy and performance, and noted all updates.

McCloud Remedy Project

The board received an update on the McCloud remedy, which addresses age discrimination within the Local Government Pension Scheme (LGPS). Tom Taylor, Interim Head of Pensions Administration, explained that the project is facing delays due to essential software deliveries being pushed back. The legal deadline for compliance is 31 August 2025, and there are concerns that this deadline may not be met.

Tom Taylor reassured the board that Kingston is not alone in this situation, and many other funds are in the same position. He outlined the process for reporting a breach to the pension regulator:

If we're a month before the 31st of August going to regulators and look, we're really sorry, we've not been able to comply with this. Here's a clear project plan for getting us back on track. Our understanding from the funds that have already done that is they've turned around and said kind of good luck with delivering your plan.

Sam Burgess asked about the process if data sets are not received from employers. Tom Taylor responded that the council is seeking support from third-party benefits consultants to identify options for obtaining the data, particularly in cases where employers no longer have the data due to bankruptcy or cyber breaches. He said that the consultants would look at options such as using year-end returns and monthly contribution schedules to work out the data.

Sam Burgess also raised a question about resource capacity and how to ensure that the focus and delivery for data integrity is as robust as the council's own, if third parties are inputting. Tom Taylor said that anything the council does to seek support from a third party benefits consultant will be compliant. He said that the council is drawing up a plan assuming that there is no third party benefits support, but is also looking at options for third party support and how that would feed into the plan.

Pension Administration Performance

Tom Taylor provided an update on the key administration activities of the Shared Pensions Administration Service. He noted a typo in the Pension Administration Performance Update, where the approaches have fallen from 1,349 to 830, a decrease of 519 over the quarter. He highlighted the reduction in overdue cases of three months or more, which have fallen from 63 to 8, and further down to 2 as of the meeting date. One case is awaiting information from another fund, and the other is awaiting tax information from a member.

Tom Taylor also referred to appendix A7 of the Pension Administration Performance Update, which looks at the performance of the team and hitting service level agreement (SLA) targets of 90 and 95%. He noted that all priority cases are on track, but the answer general query correspondence has fallen to about 75% over the last quarter, which the team is addressing.

Robert Ewing, Director of Finance at the University, asked about the increase in new tasks from April to May, as shown on the bar chart on A8. Tom Taylor explained that this is due to the annual return exercise, where employers provide staff pay information, and missing starters and leavers are identified.

Sam Burgess commented that it was really positive to see the drop in the outstanding processes and the 90-plus days, and praised the team's work.

Pension Administration Projects

Tom Taylor provided an update on the key projects of the Shared Pensions Administration Service, as detailed in the Pension Administration Projects Update.

• Annual Returns Exercise: 100% of employer submissions have been received on time for the first time since 2020. The next step is to work on the annual benefit statements.
• Pensions Dashboard Project: This is a government initiative to connect all pensions data to a dashboard, allowing members to see all their pensions in one place. The digital architecture is now live, and some providers have successfully connected to it. The update for when URI scheme members can log in to see it is autumn 2026, but a definitive date is yet to be confirmed. The council has completed the procurement of software to connect data to the government dashboard and is commencing implementation.
• McLeod Remedy: This project addresses age discrimination within the LGPS. The council has received 78.1% of the files from fund employers, validated 27.6%, and loaded 5% of data. Delays are due to software deliveries. The legal deadline to be compliant is 31 August 2025.

Governance and Risk

Tom Taylor presented the Governance and Risk Update, which focuses on the fund's risk register and key governance updates. He highlighted the risk around the failure by the software provider to provide compliance software compliant with the regulations, which has been upgraded to a red risk due to continuous delays with the McCloud remedy.

Tom Taylor also discussed the access and fairness consultation, a government initiative focused on addressing historical themes within the LGPS, mostly around age and gender discrimination. He gave examples such as gender imbalances in the 1970s LGPS regulations and age discrimination in death benefits.

He also mentioned administration charges, stating that the fund has a policy around levying additional administration charges from employers for underperformance, and that this policy seems to be working as no additional costs have been incurred over the final quarter of 2025. All invoices raised to date have been recovered.

Sandeep Bajwa asked if VAT is included on the invoices. Tom Taylor responded that VAT is not included on those invoices as they are exempt charges, but actuarial charges do include VAT.

Work Programme

Tom Taylor presented the Work Programme Update, outlining the programme of work for the pension board meetings for the municipal year 2025-26. He explained that the trainings are normally tailored around those sessions, and that the training for this meeting was tailored around the McLeod remedy. He said that the next meeting in October will discuss the annual report on the accounts for 24-25, and the pension fund panel update, including the triennial valuation.

Robert Ewing asked Tom Taylor to explain a little bit about the training and how it works for the benefit of the two new members. Tom Taylor explained that the training is an online portal provided by Hyman's Online Learning Academy, and that there is a training associated with it once a quarter. He said that new board members will also receive some additional training to help them get the background that they may not pick up through the online training sessions.

Pension Fund Accounts Audit Outcomes Report

Catherine Gray, Head of Pensions, Investments and Treasury, presented the Pension Fund Accounts Audit Outcomes Report for 2023-24. She confirmed that the audit has been completed and an unmodified opinion has been given. She highlighted three control deficiencies, including a red-rated one related to journal entries being posted into the ledger. This is a council-wide issue, and the council is looking to implement stronger controls.

Robert Ewing congratulated the fund and the Binance Department, RBK, for enabling this to happen, particularly with a new auditor.

Pension Fund Panel Update - Investment Strategy and Performance

Catherine Gray summarised the investments related papers presented to the RBK Pension Fund Panel in June 2025, as detailed in the Pension Fund Panel Update - Investment Strategy and Performance. She reported that the fund returned a negative return of minus 1.6% over the quarter, but over the longer term, the returns have continued to be relatively strong. The three-year returns are at 4.7%, above the actuary's expected return of 4.3%, and the five-year return is 9.7%. She said that the Kingston funds performed much better than the average.

Catherine Gray said that the panel decided at the February meeting to reduce the exposure to equities because they were overweight in equities. They sold £30 million out of each of the three equity mandates and moved that money into index link gilts and the multi-asset credit fund with London Civ. She said that they are still slightly underweight some of the private market funds as they wait to invest the money as and when the managers find suitable investments.

Catherine Gray then discussed the London Civ section, explaining that a lot has happened in terms of the pension reforms. She said that the fund will retain the decision around setting the high-level investment strategy, but it will be for the London Civ to implement that investment strategy and decide which managers to pick within that asset class. She said that all of their investments will have to be managed by the London Civ by 31 March 2026.

Robert Ewing asked what the benchmark was on paragraph two of the Pension Fund Panel Update. Catherine Gray explained that the benchmark overall for the fund is made up of a blend of individual benchmarks for each investment they have.

Sam Burgess asked about the asset allocation table on F3, and why global equity is rag rated as amber but is plus 3.2, while diversified growth is rag rated as green but is minus 0.5. Catherine Gray explained that the rag rating is meant to indicate how close to the outside of the range they are.