The Pension Board of Harrow Council met on Thursday 31 July 2025 to discuss pensions administration performance, the review of the Pension Fund Committee's items, and the Pension Board's work programme. Key decisions included the appointment of Gerald Balabanoff as Vice-Chair and the noting of reports on pensions administration, the Pension Fund Committee's activities, and the Board's future work plan.

Pensions Administration Update

The Board received an update on the performance of the pensions administration team for the quarter ending 31 March 2025. Overall task completion within the target time had dipped to 52% from 66% in the previous quarter, with particular underperformance noted in transfers in and out. Patrick Kilgallen, Interim Treasury and Pensions Manager, explained that the team's targets are set at half the legal deadline, representing a higher standard. He also informed the Board of a recent change in line management, with the Pensions Administration Manager now reporting to the Head of Payroll and Pensions Administration, a new role created to foster closer working between the two teams.

Gerald Balabanoff, a Scheme Member Representative for Pensioners, requested that future reports include a column showing the number of days for each target to provide a clearer understanding of the time scales involved. He also raised concerns about the 49 outstanding other cases, questioning if they were significant. Mr Kilgallen stated he would investigate this further.

Concerns were also raised about the 419 pensioners who had not responded to life certificate requests. Mr Kilgallen explained that the pension payments for these individuals would be suspended. He also mentioned that the council was setting up a system to allow them to look up death certificates nationally, which should speed up the process of identifying deaths. Councillor Pritesh Patel, Portfolio Holder for Cleaner Streets & Public Safety and an Employer Representative, noted the importance of pausing payments and asked about plans for finalising these cases.

Review of Pension Fund Committee Items

The Board reviewed the items discussed at the Pension Fund Committee meeting on 16 June 2025. A significant portion of the discussion focused on the underperformance of the pension fund's investments, particularly the Local Government Collective Investment Vehicle (LCIV) active equity funds. The fund had underperformed its benchmark by 2.3% over the last 12 months and had also failed to meet peer group performance levels over three, five, and ten-year periods.

Patrick Kilgallen informed the Board that the Pension Fund Committee had a strategy day scheduled for August to consider changes to the portfolio. He noted that the LCIV had recently taken steps to address one of its underperforming managers, but it remained to be seen if this would improve performance.

Councillor Patel expressed disappointment with the long-term underperformance and hoped that decisions made during the strategy day would lead to a change in trend. Gerald Balabanoff questioned the role and effectiveness of Mercer, the investment consultants, and whether their role would continue under proposed government changes to pension schemes. Mr Kilgallen clarified that Mercer replaced Aon as investment consultants and that their role was to provide due diligence on fund managers. He also noted that under government proposals, the advice role was expected to transfer to the London CIV.

There was a lengthy discussion about the performance of the LCIV, with concerns raised about its governance, the number of chief investment officers it had experienced, and its approach to making changes based on consensus. Mr Kilgallen acknowledged that securing consensus among the 32 London boroughs was challenging.

The Board also discussed the Pension Fund's funding position, which had improved to 133% as of 31 March 2025, up from 96% at the 2022 triennial valuation. This improvement was primarily attributed to an increase in the discount rate applied to future liabilities, rather than solely asset growth.

Pension Board Work Programme 2024-25

The Board reviewed its work programme for the upcoming year. Key items to be considered include quarterly reports on pensions administration performance, updates from the Pension Fund Committee, and the review of the Pension Fund Risk Register. The Board also noted that the implementation of the Code of Practice and the Pension Board's Annual Report had been moved to the 2025-26 programme.

Gerald Balabanoff reiterated his long-standing concern about the Pension Board's lack of access to Part II (confidential) papers of the Pension Fund Committee meetings, comparing Harrow's approach to that of other authorities. Mr Kilgallen stated that discussions were ongoing with Democratic Services to explore possible solutions, but previous attempts had not been successful. He also mentioned that the Board's access to Part II minutes would be reviewed as part of a compliance assessment project and potentially during future government reviews of Local Government Pension Schemes (LGPS).

The Board also discussed the annual report that goes to the full council meeting. It was confirmed that this had happened in previous years, and Mr Kilgallen agreed to look into whether it had occurred in the last couple of years and to liaise with the relevant parties to ensure it was brought up to date.

Other Business

Gerald Balabanoff was appointed as Vice-Chair for the 2025-26 municipal year. The minutes of the previous meeting held on 20 March 2025 were approved, subject to a minor amendment regarding the auditor's name. No public questions, petitions, or deputations were received.