The Pension Fund Committee met on 11 January 2024 to review investment performance, audit updates, and policy matters. Key decisions included approving the publication of the 2021/22 Draft Annual Report and noting progress on admissions, cessations, and bond agreements.

Investment Strategy

The committee noted the investment transactions that occurred between October and December 2023, including investments in the LCIV Long Term Buy and Maintain Credit Fund (£75m) and LCIV Renewable Infrastructure (£0.295m). Disinvestments were made from Schroders Corporate Bonds (£75m). Planned investment transactions for 2024 were also outlined.

External Audit and Accounts Update

The committee received an update on the 2020/21 audit, which remains outstanding. Plans for the 2021/22 and 2022/23 audits were discussed. The committee approved the publication of the 2021/22 Draft Annual Report, despite the ongoing audit status. Actions were agreed to provide a summary of the timing for outstanding audits, to indicate unaudited accounts in published reports, and to seek legal advice on which chair should sign off reports. Future annual reports will include a foreword by the relevant chair and an executive summary.

Pooling Update

An update was provided on the government's response to the LGPS Investment Consultation, published on 22 November 2023. The government's target for liquid assets to be transferred to a pool by 31 March 2025 remains in place, requiring a plan for asset transition by this date. The committee noted the importance of pooling and the update provided by officers.

Responsible Investment Update

The committee received an update on actions taken to progress the Fund's NetZero Strategy. Investigations into what a Paris-Aligned Fund means in practice and options for equity holdings were discussed. The committee also noted the exploration of Nature-Based Assets in partnership with the London CIV and other investment managers. The undeveloped nature of the Carbon Credits market was highlighted, with any risks needing to be understood before investment decisions are made. Committee members were encouraged to watch a video produced by the London CIV on 'natural capital'.

Policies and Procedures Report

An update was provided on the policies and processes for the Barnet Pension Fund, including review dates. The committee noted the policies and processes and the dates for future review. The Contribution Review Policy is currently being consulted on and will be discussed at the next meeting. The Communication Engagement Policy has also been updated.

Administration Performance Report and Update on Other Administration and Legislative Matters

An update was provided on the current administration performance by West Yorkshire Pension Fund (WYPF), noting that approximately 91% of cases were completed within agreed Key Performance Indicator (KPI) targets in November. The number of complaints and Internal Dispute Resolution Procedure (IDRP) cases remains low. Two members have accepted compensation of £500 each due to maladministration. Member Newsletters are due to be issued. The Pensions Team has begun reviewing WYPF's performance against the Administration Strategy.

WYPF fees, which are the largest supplier fee, have increased significantly since November 2020, attributed to staffing costs, IT investment, pandemic-related expenses, inflationary pressures, and costs related to the McCloud judgement. The Pensions Team will continue to review and discuss these fees with WYPF.

The 2023 Annual Benefit Statements (ABSs) and Deferred Benefit Statements (DBSs) had a deadline of 31 August 2023, with 98.4% of ABSs and 100% of DBSs produced by that date. As of 13 December, 99.2% of ABSs had been issued.

Progress on the Data Improvement Plan was reported, with approximately 6,850 data items remaining to be updated out of an initial c28,500. Two of the ten areas with the largest number of issues have been completed, with the third area, Guaranteed Minimum Pensions (GMPs), nearing completion. The common data score was 96.3%, above the Pensions Regulator's target, and the conditional data score was 87.3%, with a target of 90% or above by March 2024.

Regarding historical leavers, the number of cases to be processed has reduced to 309, with 139 of these being from before November 2020.

The Pensions Dashboard Programme has been delayed, with a confirmed staging date for public service pension schemes of 30 September 2025.

Between April and November 2023, the fund received £36.7m in contribution payments, with monthly contribution returns totalling £36.6m. The Pensions Team continues to chase employers for missing or incomplete returns.

The committee was asked to approve the new draft Communication and Engagement Policy.

Knowledge and Understanding

The committee noted the contents of the report and the training options available. Members were recommended to complete the LGPS Online Learning Academy (LOLA) training by 31 March 2024.

Pension Fund Committee Work Programme

The committee noted their Work Programme for 2023 to 2024.

Admissions, Cessations and Bond Status Update

The committee noted the progress on outstanding admissions, cessations, and bond agreements/renewals. The new Admission Policy has been forwarded to schools for consideration, with a webinar planned for February. The new policy will come into effect in April. The committee approved the recommendation for Sancroft Community Care to be admitted into the Barnet Pension Fund on a pass-through basis, as detailed in Appendix D.

Pension Fund Investment Performance Report

The committee received an update on investment valuations, transactions, and performance to 30 September 2023, with an estimated valuation to 30 November 2023. The fund's value increased by an estimated £37.4m over the two months. Hymans Robertson's report for Q3 2023 indicated a fund return of -0.2%, underperforming the benchmark by 1.1%. The committee noted concerns regarding the underperformance of the Fiera Real Estate Fund and the LCIV Sustainable Equities Exclusion Fund. Actions were agreed to communicate concerns to the London CIV regarding the poor performance of the LCIV Sustainable Equity Exclusion Fund and to seek information on how fund managers are evaluated and monitored. A programme for learning more about fund managers over the next 12 months is being devised.

Motion to Exclude Press and Public

A motion was moved to discuss exempt appendices in private session.