The Pensions Committee of Barking and Dagenham Council met on Tuesday 30 September 2025 to discuss the draft Pension Fund Accounts for 2024/25, receive an update on the audit from Grant Thornton, and review the Fund's quarterly performance and responsible investment policy. The committee noted the draft accounts and the audit update, approved the Responsible Investment Policy, and noted the Fund's quarterly performance report.

Draft Pension Fund Accounts 2024/25 and Grant Thornton Update

The committee received the draft Pension Fund Accounts for the year ending 31 March 2025. Nick Vickers, Interim Head of Pensions, Treasury and Capital, presented the accounts, which were then reviewed by Grant Thornton (GT), the Council's external auditors. Terence Bershu from GT outlined the audit plan, highlighting significant risks such as management override of controls, the valuation of Level 3 investments, and the actuarial valuation of the pension liability. GT confirmed that their audit fieldwork would commence on 1 October 2025, with an expectation to report to the committee by 17 December 2025 and aim for sign-off by the 27 February 2026 backstop date.

Councillor Rocky Gill, Cabinet Member for Finance & Corporate Services, raised concerns about the ongoing delays in signing off the 2023/24 accounts and previous years, which are still with auditors BDO. Nick Vickers explained that discussions between BDO's audit lead and the Strategic Director of Resources were ongoing, primarily concerning loans between the Pension Fund and the General Fund. While the Council maintained the loans were not illegal, BDO had yet to make a final decision on their position. It was confirmed that BDO were expected to update the Audit and Risk Committee on 26 November. The committee noted the report.

Pension Fund Quarterly Monitoring 2025/26 - 1 April to 30 June 2025

Nick Vickers presented the Quarterly Monitoring Report for the first quarter of 2025/26. The Fund had a strong quarter, with its value reaching £1,600.8 million, an increase of £73.3 million. The Fund's investment returns were 4.84%, outperforming its benchmark by 0.52%. Over one, three, and five years, the Fund had outperformed the local authority average, with its strong performance attributed to the passive equity mandate with UBS, benefiting from US market performance.

Councillor Gill inquired about the asset allocation, and Nick Vickers stated that the London CIV had offered to update the Fund's strategic asset allocation, which he considered timely given the Fund's strong performance and expected positive actuarial valuation results. Councillor Mukhtar Yusuf, Deputy Chair of Overview & Scrutiny Committee, questioned whether some internal metrics used as targets were too ambitious. Nick Vickers agreed that some targets were arbitrary and that future benchmarks should be challenging yet realistic and consistent. The committee noted the report.

Responsible Investment Policy

Nick Vickers reported that the Fund did not have an up-to-date Responsible Investment Policy (RIP), which is a requirement under the Local Government Pension Scheme (LGPS) Investment Regulations (2016). He presented a draft policy aimed at establishing a base position for the committee to develop its approach. The report highlighted existing positive actions, such as active share ownership and specific exclusions, and noted the London CIV's strong focus on Environmental, Social, and Governance (ESG) issues.

Following a request from the Chair, officers were asked to prepare a report for the next meeting on disinvestment, including the latest legal advice from the Scheme Advisory Board. The committee resolved to approve the LBBD Responsible Investment Policy.

Private Business and Investment Strategy Update

The committee then moved into private session to discuss the Investment Strategy Update. This included updates on equity manager performance, diversified growth funds, investment in infrastructure, and the London CIV transition.

Regarding diversified growth funds managed by Newton and Pyrford, which had underperformed, the London CIV had determined it was no longer cost-effective to maintain them and decided to terminate both as of 31 December 2025. The committee agreed to delegate the decision on preferred replacements to the Strategic Director of Resources in consultation with the Chair and Deputy Chair.

For infrastructure investment, the committee deferred a decision on which London CIV Infrastructure fund to invest in, pending the outcome of the Strategic Asset Allocation Review expected in January 2026.

Finally, the committee agreed to the adoption of Investment Management Agreements between the London CIV and investment managers for mandates held with Kempen, UBS, Blackrock, Hermes, and Patria.